Examining the relationship amongst human resource ...

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Title Examining the relationship amongst human resource management, leadership, and firm performance outcomes with knowledge workers: preliminary evidence from a biotechnology company
Author(s) Shona Whyte
Date 2012
Institution University of Prince Edward Island
Supervisor(s) Wendy Carroll
Degree earned Master of Business Administration
Place published Charlottetown, P.E.I.
Abstract Deficiencies in a number of key human resource-related areas have been identified as potential threats to the Canadian biotechnology sector's success. Given its importance as an emerging industry and, its pressing needs relative to leadership and human resource (HR) practice development, the biotechnology sector is seen as being a particularly rich environment for studying the interplay of human resource management (HRM) and transformational leadership as predictors of firm performance. This thesis presents preliminary findings from a study conducted with a group of knowledge workers in a case study of a Canadian biotechnology company. Specifically, the research addresses whether the effectiveness of HR practices varies with the quality of organizational leadership, thereby suggesting that “what” firms do in managing firm performance is less important than “how” they implement HR practices. The potential interactive effect of HR practices and leadership on firm performance, namely employee, operational and financial performance was examined to identify the contextual factors, and to help elucidate the “black box” which moderates and/or mediates the relationship between enacted leadership behaviour, employee behaviours and HRM. The linkage between HRM and leadership was tested at the macro level and the uniqueness of their combined effects on firm performance was examined. While the bundle of HRM practices was not a predictive influence on operational or financial performance in the model proposed in this study, it did have a significant influence on employee performance, which is important in explaining employee commitment and subsequently performance. The significance of the intellectual stimulation and individualized consideration indices of transformational leadership in this study and the positive influence on operational performance appears to be in agreement with the literature. The research presented herein integrates the two separate streams of research; the investigation of the relationships between leadership and firm performance or HRM practices and firm performance. The analysis of the black box of HRM practices and firm performance revealed positive relationships between transformational leadership and operational performance, and between HRM practices and employee performance and, demonstrates that HRM practices play a mediating role in the relationship between leadership and employee performance as the organizational outcome.
Use/Reproduction In presenting this signature project report in partial fulfilment of the requirements for a Master of Business Administration degree from the University of Prince Edward Island, the author has agreed that the Robertson Library, University of Prince Edward Island, may make this signature project freely available for inspection and gives permission to add an electronic version of the signature project to the Digital Repository at the University of Prince Edward Island. Moreover the author further agrees that permission for extensive copying of this signature project report for scholarly purposes may be granted by the professor or professors who supervised the author’s project work, or, in their absence, by the Dean of the School of Business. It is understood that any copying or publication or use of this signature project report or parts thereof for financial gain shall not be allowed without the author’s written permission. It is also understood that due recognition shall be given to the author and to the University of Prince Edward Island in any scholarly use which may be made of any material in the author’s report.

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