Knowledge strategies, firm types, and complementarity in human-resource practices

This paper argues that complementary human resource practices play an important role in the development of a knowledge-based theory of firm differences. We find that firm types and knowledge strategies impact combinations of human resource practices employed in support of current activity systems and innovation. While recent evidence suggests that consistency among human resource practices is conducive, e.g. for productivity increases, research on complementarities among human resource management practices remains sparse, and focussed on single industries or firms. Additionally, little is known whether and how human resource practices support activity systems in different firm types and innovation. This paper addresses this gap by investigating the impact of firm type, knowledge strategies pursued, and external linkages on the application of complementarity human resource practices in a multisectoral sample of 684 manufacturing and 1,216 non-manufacturing firms. We develop hypotheses from the knowledge-based perspective, the theory of complementarity, and the strategic human resource literature. Our results support prior findings about complementarity between human resource practices, but complementarity effects differ in strength. Additionally, combinations of practices applied differ significantly with contingency factors such as knowledge strategies pursued and firm type. Thus, calling for a stronger integration between strategic management and human resource management.