Expanding Capacity for Learning and Transformation: A New Look from Human Resource Configurations Towards Product Innovation in the Healthcare Industry

Prioritizing human resource (HR) practices has been found to improve innovation outcomes in organizations. However, most previous studies have concentrated on internal mechanisms, leaving a gap in our understanding of how HR practices facilitate organizations in adapting external knowledge and technology to drive innovation. To bridge this research gap, we study the mediating role of employees’ innovative work behaviour (IWB) and an organization's capacity for learning and transformation (CLT) in the relationship between HR practices that strengthen intellectual capital (IC) and product innovation. The hypotheses were tested using a time-lagged design and survey data from the healthcare industry collected over three waves. The findings indicate that employees' IWB mediates the relationship between IC-enhancing HR practices and the organization's CLT. IC-enhancing HR practices are also associated with product innovation through the serial mediation effects of IWB and CLT. The study also highlights the moderating role of transformational leadership in the indirect relationship between IC-enhancing HR practices and the organization's CLT via IWB. This research demonstrates that HR systems, although internally designed, can capture external transformations. Moreover, it emphasizes the importance of the combined impact of well-designed HR systems and leadership for driving innovation.