How Japanese manufacturing firms align their human resource policies with business strategies: testing a contingency performance prediction in a Japanese context

Abstract

This study examines the interaction effects of business-level strategy and HRM policies upon performance among Japanese manufacturers, in response to the current debate around the contingency fit proposition in the field of strategic human resource management (SHRM). Specifically, it was hypothesized that the three generic strategic types (cost reduction, differentiation (innovation), and quality enhancement) would moderate the relationship between particular HRM policies and the performance of Japanese manufacturing firms. The results, based on a sample of 312 Japanese manufacturers operating in the domestic environment, reveal the existence of links between appropriate strategy and HRM policies in predicting performance, providing strong support for the proposition of contingency fit from SHRM theory. The findings are used to discuss how Japanese manufacturers can align their HRM policies with business strategies to increase manufacturing performance. Limitations of the study and directions for future research are also considered.

Keywords:

• business strategy
• contingency fit
• HRM-performance link
• Japan
• strategic HRM

Acknowledgements

Part of this research was supported by the Grant-in-Aid for Scientific Research from the Ministry of Education, Culture, Sports, Science, and Technology (MEXT), Japan (#19730264). I would like to thank Professors Mitsuru Wakabayashi and Ziguang Chen, and the anonymous reviewers for their helpful comments and suggestions on an earlier version of this article.