Correlates and consequences of high involvement work practices the role of competitive strategy

Abstract

Illustrative of world-wide trends, New Zealand has undergone drastic product and labour market reforms in an attempt to stimulate economic growth and national competitiveness. Towards this goal, rms have been urged to emphasize differentiation strategies in their approach to their markets and also to become more progressive in their management of human resources. This study nds that whereas more intensive use of high involvement work practices promotes rm effectiveness, this effect depends on the competitive strategy being pursued. The use of high involvement work practices is positively associated with performance in rms competing on the basis of differentiation and shows no relationship in rms pursuing a strategy of cost leadership.