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A Framework for Integrating Strategic HR and Knowledge Management for Innovation Performance

In the current Industrial Revolution 4.0, organizations are under pressure to innovate to keep pace with the technological changes and market uncertainties to survive, grow and sustain. These organizations leverage their innovative output by effectively exploiting, exchanging and applying knowledge through knowledge management (KM) processes (Darroch, 2005; Gold et al., 2001). KM processes are the activities that are involved in creating, organizing, sharing and using knowledge to generate value for firms (Yew Wong and Aspinwall, 2005).

Over the past 20years and until recently, studies have affirmed the role of strategic human resource practices (SHRMs) in supporting KM process to improve innovativeness in organizations (Iqbal et al., 2020). Strategic HR practices include selective staffing, self-managed teams, decentralized decision making, extensive training, job security, flexible job assignments, open communication, collaborative work environment and performance-based compensation, with the aim of promoting human knowledge, skills, shared goals, relationships and trust among employees (Takeuchi et al., 2007; Leana and Van Buren, 1999). These HR practices develop individual's ability, motivation and opportunity to locate and share knowledge for employees and upgrade employees' knowledge and skills so they are in a position to create innovation (Minbaeva, 2013).

In the present knowledge economies, application and creation of knowledge is a litmus test indicating the quality of human capital and productivity in industries (Lapina et al., 2014). Managers emphasize on designing SHRP to induce knowledge sharing, acquisition, creation, application and utilization among employees, for realizing higher innovation in knowledge-intensive organizations.

Although, several studies reiterate the connection between strategic HR practices, KM and innovativeness in organizations, this relationship can be explored more holistically in the light of pertinent organizational factors of the same context. Previous studies in first-generation KM were characterized by a "one size fits all" approach that ignored context and placed scant emphasis on the correspondence between knowledge, strategy and culture (Ichijo and Nonaka, 2006). Drawing from the contingent - configurational HR "fit" perspective, we take into account the role of other KM enablers and build a conceptual framework by reviewing the concerned literature. This study argues that strategic HR practices when complemented with other facilitators of KM process, can further improve innovation performance in organizations.

First, the configurational-HR approach suggests for a "horizontal fit" through internal consistency among multiple HR practices and firm's resources, for improved organizational performance (Delery and Doty, 1996; Youndt et al., 1996; Chow and Liu, 2009). Intellectual capital is the organizational resource that drives KM process through firm's human resource (Soo et al., 2017). Human capital embodies knowledge created and possessed by individual. Knowledge equally exists in firm's social capital created through social interactions among organizational members and is embedded in their social structure (Narasimha, 2000). This aspect suggest that firm's human resource significantly contributes to the KM process and calls for adopting practices to develop firm's human and social capital. For improving knowledge-based performance, Minbaeva, 2013 suggests "Configurational-HR" where bundle of HR practices enhance firm's other resources than one-size fits all "stand-alone HR-best practices".

Secondly, the contingent-HR perspective confirms the adoption of HR practices suited to, one, accomplish the goals and objective of firm's business strategy and, two, to build conducive culture, for improving firm's competitive advantage (Delery and Doty, 1996; Youndt et al., 1996; Chow and Liu, 2009). An important task of a company for knowledge-based management is to establish conditions so that employees with specific knowledge are in a position to create collective knowledge and to implement it to ensure business success (North and Kumta, 2018). Several researches affirm that strategic HR practices, organizational culture and strategy are critical success factor for the KM process. In line with the contingent-HR perspective, strategic alignment of corporate culture and firm's business strategy with KM fosters firm's competitive position (Davenport and Prusak, 1998; Zack, 1999). Researchers advocate the need to align HR practices vertically and horizontally, for better performance outcomes. However, literature suggests that not enough effort is seen in this direction.

Human resource is the source of organizational knowledge and innovation stems from creation and application of knowledge by them (Jain and Moreno, 2015). SHRM is integral for KM in organizations, as it helps to manage and shape employees' knowledge, skills and behaviour to promote innovation in organizations. Push and pull factors for knowledge generation leads translation of knowledge into commercial products. Strategic HR practices create a push for knowledge generation by hiring, developing and managing knowledge workers in organization. Knowledge based organizations create a pull factor by consuming the generated knowledge for innovation. This is how both these practices result into innovation.

Strategic human resource management (HRM) practices, though team and skill based staffing, performance based compensation, competence oriented training and enriching job experience can develop employee's individual knowledge and experience. On the other hand, KM processes in organization, through sharing, acquiring, creating, storing of this knowledge, helps in applying this knowledge for building commercial products and services. This shows strong ties among strategic HRM, KM and innovativeness in organizations.

Enabling KM requires management and rewards systems that promote competence of knowledge workers, integrates knowledge sharing and creation into rewards and appraisal system and bring collaboration in organization (North and Kumta, 2018). When employees regard innovation as an outcome of their job performance, they will try to engage in KM-related processes. Through strategic HRM practices employees regard KM-related behaviours a valued part of job to be performed and evaluated.

Organizational context foster or impede employees' behaviour in KM through generating favourable or unfavourable conditions for the exchange and creation of knowledge (Chen et al., 2010). Thus, both HRM and KM processes are interdependent on the context in which they function.

Organizational culture is among the principal factors that impacts KM process (Davenport and Prusak, 1998; Gold et al., 2001). Organizational culture represents collective beliefs, values, assumptions and shared perceptions of daily organizational practices and influences the social interactions among its members (Hofstede et al.,1990). Strategic HR practices can create a culture where there is free exchange of knowledge and encourage staff to discuss their mistakes creating an open and learning culture (Soliman and Spooner, 2000). Such a culture may facilitate KM process in the firm.

A number of studies argue that innovative and supportive organizational culture can motivate people to engage in knowledge exchange and utilization, whereas bureaucratic culture may create barriers in frequent interactions and knowledge sharing (Chen et al., 2010). Knowledge-intensive organizations need to have a supportive and cooperative work culture for optimum utilisation of their knowledge resource (Rai and Prakash, 2012). On the contrary, a culture that lacks trust among employees and perceives knowledge sharing detrimental for individual growth in the organization impedes knowledge transfer in the organization (Suzulanski, 1996). Strategic HR capabilities and organizational culture are the organizational resources that can complement each other in leveraging firm's performance (Patil and Kant, 2012). Nevertheless, empirical studies exploring this relationship remain scarce.

Alignment between strategy and the firm's HR system requires a better configuration to enhance KM performance Patil and Kant (2012). Firms need to complement their innovation-oriented strategy with strategic HR, focussing on learning and development, employee involvement and quality, performance management, welfare and engagement, hiring creative people and empowering employees (Cooke and Saini, 2010). There is a need to explore how different types of business strategies fit KM (Greiner et al., 2007). Firms with a cost leadership strategy may focus on knowledge documentation, storing, sharing and application to ensure cost reduction and innovation. Firms with differentiation strategy may focus on creating, sharing and capturing knowledge, enabling them to develop new products/services frequently and identify new opportunities (Becerra-Fernandez and Sabherwal, 2014). It is yet to be explored whether these strategies complement the firm's strategic HR in KM. Companies implementing KM resort to different organizational practices in line with their strategic aims and objectives (Zack, 1999). In spite of their interdependence, not many scholars have explicitly studied the impact of corporate strategies on company's KM activities or process (Shih and Chiang, 2005) (Figure 1).

Innovation is related with the creation and use of new knowledge. Thus, innovating firms need a focus on KM to create and disseminate knowledge for use to employees. Knowledge-intensive organizations need to transform their culture, HR practices and develop an effective KM system for innovation (Schroeder, 2015). This paper intends to propose a model to examine the relationship among strategic HR practices, KM moderated by strategy and culture. The mediating effect of KM between strategic HR practices and innovation performance be validated empirically in knowledge-intensive organizations.