Individual Performance in Turbulent Environments: The Role of Organizational Learning Capability and Employee Flexibility

• DOI: http://doi.org/10.1002/hrm.21741
• Date: 01 May 2016
• Published date: 01 May 2016
• Author: Joaquín Aldás‐Manzano,Joaquín Camps,Federico Torres‐Carballo,Víctor Oltra,Guillermo Buenaventura‐Vera

Human Resource Management, May–June 2016, Vol. 55, No. 3. Pp. 363–383

© 2015 Wiley Periodicals, Inc.

Published online in Wiley Online Library (wileyonlinelibrary.com).

DOI:10.1002/hrm.21741

Correspondence to: Joaquín Camps, Department of Business Management, University of Valencia, Facultad de

Economía, Av. Tarongers s/n, 46022 Valencia, Spain, Phone: +34 963828902, E-mail: joaquin.camps@uv.es

INDIVIDUAL PERFORMANCE

INTURBULENT ENVIRONMENTS:

THE ROLE OF ORGANIZATIONAL

LEARNING CAPABILITY

ANDEMPLOYEE FLEXIBILITY

JOAQUÍN CAMPS, VÍCTOR OLTRA, JOAQUÍN

ALDÁS-MANZANO, GUILLERMO BUENAVENTURA-

VERA, AND FEDERICO TORRES-CARBALLO

Organizational learning capability (OLC) and employee fl exibility help fi rms navi-

gate the challenges faced by organizations operating in turbulent environments.

OLC includes dimensions such as experimentation, risk taking, openness, dia-

logue, and participative decision making. Employee fl exibility is considered a

crucial tool for strategic human resource management in tackling environmental

turbulence. Accordingly, we pose the following research question: how, and to

what extent, is individual performance enhanced by OLC and employee fl exibil-

ity in turbulent environments? The major impact that environmental turbulence

has on change and fl exibility requirements suggests that employee fl exibility

plays an important role in the impact OLC has on individual performance. How-

ever, we found no prior studies that explicitly analyzed this mediating function

of employee fl exibility. In this study, we tested three hypotheses that link OLC

and individual performance, OLC and employee fl exibility, and employee fl exibil-

ity and individual performance. We applied a structural equation methodology,

using partial least squares path modeling, to a sample of 174 academics at a Latin

American university (a highly turbulent context). Our results show employee

fl exibility fully mediates the relation between OLC and individual performance

given the presence of environmental turbulence. ©2015Wiley Periodicals,Inc.

Keywords: individual performance, turbulent environments, organizational

learning capability, employee fl exibility, strategic human resource manage-

ment, structural equations

364 HUMAN RESOURCE MANAGEMENT, MAY–JUNE 2016

Human Resource Management DOI: 10.1002/hrm

Flexible employees

can implement a

variety of different

strategies that are

appropriate to meet

diverse competitive

demands, over and

above strategies

and needs that are

immediately relevant

to the firm.

Chakravarthy, 1997). Hence, employee in-role

behaviors that imply change, learning, and risk-

taking attitudes can be regarded as indicators of

good individual performance in turbulent envi-

ronments. Effectively facing environmental tur-

bulence requires individual drive for change

(tackling dynamism), learning (tackling complex-

ity), and risk taking (tackling uncertainty). Within

this context individual performance can be defined

as “behaviors that are recognized by formal reward

systems and are part of the requirements described

in job descriptions” (Williams & Anderson, 1991,

p. 606).

Because turbulent environments force com-

panies to be especially agile and responsive

(Ansoff, 1979; Hitt et al., 1998; Ketkar & Sett,

2010; Nayyar & Bantel, 1994; Shafer, Dyer, Kitty,

Amos, & Ericksen, 2001), effective organizational

learning has been considered essential to success-

fully deal with environmental turbulence (e.g.,

Edwards, 2009; Hanvanich, Sivakumar, & Hult,

2006; Lichtenthaler, 2009; Ramirez, 1983; Virany,

Tushman, & Romanelli, 1992). Organizational

learning capability (OLC) (e.g., DiBella, Nevis, &

Gould, 1996), which is a dynamic capability based

on a learning culture that promotes the acquisi-

tion, creation, and transfer of knowledge as fun-

damental values (Nonaka & Takeuchi, 1995; Stata,

1989), has been defined as “the organisational and

managerial characteristics or factors that facilitate

the organisational learning process or allow an

organisation to learn” (Chiva etal., 2007, p. 226).

A number of relevant investigations have been

framed around the OLC concept (Chiva et al.,

2007; Goh & Richards, 1997; Hult & Ferrell, 1997;

Jerez-Gómez, Céspedes-Lorente, & Valle-Cabrera,

2005a), and five “OLC dimensions” (Chiva etal.,

2007) have been put forward to successfully tackle

environmental turbulence. These are: (1) inter-

action with the external environment, which

appears to be a key precondition for being aware

of environmental dynamism; (2) experimenta-

tion; (3) risk-taking, which would help tackle

uncertainty; (4) dialogue; and (5) participative

decision-making, which seems especially appro-

priate when facing complexity. Indeed, extant

research provides evidence that developing OLC

helps (knowledge) workers tackle the challenges

posed by turbulent environments (e.g., Alegre &

Chiva, 2013; Bhatnagar, 2007; Jerez-Gómez etal.,

2005a). These ideas raise the question of how, and

to what extent, OLC influences individual perfor-

mance (Van Woerkom & Sanders, 2010).

Consequently, our research question can be

stated as: how, and to what extent, is individual

performance enhanced by OLC and employee flex-

ibility in turbulent environments? The preceding

The ability of firms to be flexible and

change their behavior and routines

becomes essential if they are to remain

competitive (Hitt, Keats, & DeMarie,

1998; Santos-Vijande, López-Sánchez, &

Trespalacios, 2012). Under conditions of high

environmental turbulence, the most suitable indi-

vidual behaviors center on flexible and learning-

friendly skills and attitudes, such as openness

to change, knowledge sharing, creativity, and

autonomy (Beltrán-Martín & Roca-Puig, 2013;

Beltrán-Martín, Roca-Puig, Escrig-Tena, & Bou-

Llusar, 2008; Chiva, Alegre, & Lapiedra, 2007).

From a strategic human resource management

(strategic HRM) perspective, employee flexibility

has been identified as a dynamic capability (cf.

Teece, Pisano, & Shuen, 1997) of utmost relevance

in combating environmental turbu-

lence (e.g., Ketkar & Sett, 2010, cf.

Wright & Snell, 1998). In this sense,

recent research conducted by Ketkar

& Sett (2010) proposed two key con-

structs to build employee flexibility

as a turbulence-oriented variable in

the context of strategic HRM: HR

practice flexibility (i.e., designing

HR systems that include flexible HR

practices), and flexibility-inducing

HR practices (i.e., implementing

HR practices that foster employee

flexibility). Therefore, employees

exhibiting skill and behavior flex-

ibility contribute to generate strate-

gic alternatives and, hence, propel

innovation (Bhattacharya & Wright,

2005; Hesketh & Neal, 1999; Ketkar

& Sett, 2010; Van den Beukel &

Molleman, 1998).

Employee flexibility, defined as “the extent

to which employees possess skills and behav-

ioral repertoires that can provide a firm with

options to pursue strategic alternatives” (Beltrán-

Martín & Roca-Puig, 2013, p. 648), may improve

strategic choices that are useful in turbulent

environments (Bhattacharya & Wright, 2005;

Pacheco-de-Almeida, Henderson, & Cool, 2008;

Santos-Vijande etal., 2012; Shimizu & Hitt, 2004).

Flexible employees can implement a variety of

different strategies that are appropriate to meet

diverse competitive demands, over and above

strategies and needs that are immediately relevant

to the firm (Wright & Snell, 1998).

The preceding arguments support the idea

that flexible employees will perform better under

conditions of high turbulence. Environmental

turbulence is characterized by high dynamism,

complexity, and uncertainty (Ansoff, 1965, 1979;