How does human resource management balance exploration and exploitation? The differential effects of intellectual capital-enhancing HR practices on ambidexterity and firm innovation

Abstract

After decades, dialogues on human resource management (HRM), intellectual capital (IC), and ambidexterity still continue, mirroring that the role of ambidextrous capability in translating the impact of HRM into superior performance remains unclarified. At this juncture, the current study proposes a novel theoretical framework to extend research on the relationship between IC-enhancing HR practices and innovation. It is done sophisticatedly by examining how firm exploitative and exploratory capabilities mediate the relationship between different combinations of HR configurations and firm innovation. To this end, we designed rigorous time-lagged research with three waves of data collection from the Iranian healthcare sector. Our analyses revealed that firm explorative and exploitative capabilities significantly mediate the relationship between human, social, and organizational capital-enhancing HR configurations and firm innovation. More conspicuously, by unraveling interaction patterns among distinct HR configurations, our study revealed the intricacies of the functioning of IC-enhancing HR practices in fueling firm ambidexterity. Hence, our study offers design options to navigate through exploitation and exploration in light of the firm's core innovation strategy. We discuss the theoretical and practical implications of our findings and suggest future research avenues.