A multilevel examination of high‐performance work systems and unit‐level organisational ambidexterity

• Date: 01 January 2015
• Published date: 01 January 2015
• DOI: http://doi.org/10.1111/1748-8583.12061
• Author: Yi‐Ying Chang

A multilevel examination of high-performance work

systems and unit-level organisational

ambidexterity

Yi-Ying Chang, Department of Business Administration, National Taiwan University

of Science and Technology

Human Resource Management Journal, Vol 25, no 1, 2015, pages 79–101

This paper examines the process linking high-performance work systems (HPWS) and organisational

ambidexterity both at the unit and firm level of analyses by integrating strategic HRM, human capital

and social capital perspectives. Multisource and multilevel data from 2,887 employees and 536 managers

of 58 banks was collected. Results revealed that firm-level HPWS were positively related to unit-level

employee human capital. Unit-level employee human capital partially mediated the relationship between

firm-level HPWS and unit organisational ambidexterity. Furthermore, firm-level social climate

moderated the effect of firm-level HPWS on unit organisational ambidexterity through unit-level

employee human capital. This paper contributes to HPWS and ambidexterity research by revealing the

impacts of firm-level HPWS and mediating mechanisms, as well as identifying boundary conditions for

pursuing unit-level organisational ambidexterity.

Contact: Dr Yi-Ying Chang, Department of Business Administration, National Taiwan

University of Science and Technology, 43, Keelung Road, Section 4, Taipei 106, Taiwan. Email:

y.chang@mail.ntust.edu.tw

Keywords: firm-level high-performance work systems; organisational ambidexterity; firm-level

social climate; human capital

INTRODUCTION

Research on ambidexterity indicates that the use of high-performance work systems

(HPWS) is an important antecedent to facilitate ambidexterity, which results in better

firm performance (Patel et al., 2013). Extant research focused on HRM and ambidexterity

tends to treat both HPWS and ambidexterity as overarching organisational-level phenomenon

(Junni et al., 2013). In line with this, Patel et al. (2013) investigated the direct relationship

between HPWS and organisational ambidexterity. Organisational ambidexterity refers to the

capacity of an organisation to simultaneously utilise existing market opportunities efficiently, and

to initiate creative and innovative solutions to meet future market demands (Lubatkin et al.,

2006). Moreover, the literature on HPWS tends to study outcomes at the organisational level,

such as organisational performance. More recently, studies on HPWS have investigated the

mechanisms through which HPWS affects individual-level employee attitudes and behaviours

(e.g. Takeuchi et al., 2009). Few attempts have been made to explore the mechanisms and

boundary conditions, such as HR practices, both at the higher organisational level and the

lower organisational level to support the occurrence of organisational ambidexterity (Junni

et al., 2013; Turner et al., 2013).

There are several important reasons to uncover the mechanisms and boundary conditions

through which HPWS affects unit organisational ambidexterity. First, HRM studies have

investigated the role of HRM practices, such as HPWS, in the creation of a context conducive

to ambidexterity (Kang and Snell, 2009; Patel et al., 2013). HPWS literature has consistently

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doi: 10.1111/1748-8583.12061

HUMAN RESOURCE MANAGEMENT JOURNAL, VOL 25 NO 1, 2015 79

© 2014 John Wiley & Sons Ltd.

Please cite this article in press as: Chang, Y.-Y. (2015) ‘A multilevel examination of high-performance work systems and unit-level organisational

ambidexterity’. Human Resource Management Journal 25: 1, 79–101.

argued that the practices themselves do not generate a competitive advantage; rather,

performance stems from the human resources that are developed by the system (Huselid, 1995;

Wright et al., 2001). Accordingly, behavioural ambidexterity is likely to come from the firm’s

distinctive HR base (Barney, 1991). That is, organisations can achieve ambidexterity by being

flexible with time allocation and focusing the attention of human resources towards exploration

and exploitation (Lepak et al., 2003; Gibson and Birkinshaw, 2004; Patel et al., 2013). By

understanding the differences among people of the same organisation in terms of

ambidexterity, rather than viewing the workforce as one entity, a firm may realise that it needs

to employ a different set of HPWS in order to foster unit organisational ambidexterity. For

instance, different positions (vertically and horizontally) within a firm may demand different

levels of ambidexterity in order to be a fit between the specific demands of a job and the

behaviour of the person.

Second, it is important to understand why HPWS may be more or less effective in fostering

ambidexterity. Previous studies of HPWS have emphasised a need to discover the mediating

and boundary mechanisms that explain the performance implications of HPWS (Becker and

Huselid, 2006). More recently, scholars have called for more research to investigate how HPWS

affects ambidexterity through various mediators such as human capital (Kang and Snell, 2009;

Turner and Lee-Kelly, 2013; Turner et al., 2013) and across multiple levels (Jansen et al., 2009;

Birkinshaw and Gupta, 2013; Junni et al., 2013). While organisational ambidexterity resides at

all hierarchical levels of the organisation, it can also occur at all organisational levels. In fact,

as the multi-unit firm has become a pervasive organisational form in the contemporary

business landscape (Usher, 1999), organisational ambidexterity at the business unit level is vital

to such organisations. Lower level business units often simultaneously execute exploration and

exploitation activities, in addition to undertaking paradoxical thinking and managing

conflicting demands, and they do this with more direct contact with important organisational

stakeholders, such as employees and customers. As a result, unit-level ambidexterity (i.e. doing

two different things equally well, such as efficiency and flexibility, adaptability and alignment,

integration and responsiveness, and exploration and exploitation) could help the firm succeed

(Birkinshaw and Gupta, 2013).

Other studies have used the social capital perspective to examine the impact of HRM

practices on ambidexterity only at those organisational levels that are mediated by social

climate (e.g. Prieto and Santana, 2012). We expect that the relationship between firm-level

HPWS and unit organisational ambidexterity would be mediated by the human capital of

individual employees. Human capital refers to the knowledge, skills and abilities of

individual employees that are valuable to the firm (e.g. Subramaniam and Youndt, 2005;

Turner et al., 2013). HPWS can ‘buy’ and ‘make’ desirable individual employee knowledge,

skills and abilities, which in turn can be used to create value for the firm (Snell and Dean,

1992; Becker and Gerhart, 1996). A recent meta-analytical HRM study revealed that human

capital and motivation acted as mediators between HPWS and operational outcomes (Jiang

et al., 2012). HPWS can be used to promote or impede the efficiency of individual employees

when high-quality, valuable, unequalled human resources act in ways that are required for

implementing and achieving organisational outcomes both at firm and unit levels (Barney,

1991; Wright et al., 1994). The use of HPWS can create and maintain valuable human capital,

including generic and organisational-specific human capital, which in turn leads to a high

level of unit organisational ambidexterity (Kang and Snell, 2009). Going forward, it is

important to identify the HPWS that is critical for promoting human capital at the unit level,

and the mediating role of the human capital of individual employees between HPWS and

unit organisational ambidexterity.

HPWS and organisational ambidexterity

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© 2014 John Wiley & Sons Ltd.