Sourcing human capital for organizational effectiveness: sourcing strategy, determinants, and alignment

Abstract

Human capital sourcing is a major determinant of firm effectiveness. We develop logic that favors a specialized sourcing strategy in which organizations emphasize one type of sourcing, focusing either on developing or acquiring human capital, as opposed to a balanced approach. We then identify characteristics and capabilities that lead firms to adopt one sourcing type over another. Additionally, we examine whether aligning sourcing decisions with organizational characteristics and capabilities relates to better performance. We use panel regression to examine how sourcing decisions ultimately impact performance. Results suggest that specialized sourcing relates to improved performance more strongly than does a balanced approach, that certain organizational capabilities are advantageous for specific types of sourcing, and that aligning sourcing strategy with organizational fit partially relates to greater organizational performance.

Keywords:

• Strategic human resource management
• human capital resources
• sourcing
• organizational capabilities
• alignment

Acknowledgements

We would like to acknowledge Chad Seifried and William C. Black for their inputs at earlier stages of this project as well as feedback we received from reviewers and attendees at the Strategic Management Society and Southern Management Association conferences. Further, constructive efforts from Associate Editor Benjamin Bader and the review team at IJHRM helped greatly refine this work. Finally, we offer sincere appreciation to the late Professor Jean B. McGuire who provided generous and invaluable input on this project.

Data statement

The data are only partially publicly available due to the proprietary and laborious nature by which they were extracted, tabulated, and organized.

Disclosure statement

No potential conflict of interest was reported by the authors.