High-performancework systems with internal and external contingencies: The moderating roles of organizational slack and industry instability

Abstract

When high-performance work systems (HPWS) positively affect firm performance, both internal and external contingencies play potentially salient roles in its influence. Our study pays attention to organizational (unabsorbed) slack and industry instability as important boundary conditions in the relationship between HPWS and firm performance. Based on 307 Korean firms in 39 industries, our research found moderating effects of unabsorbed slack and industry instability in the relationship between HPWS and firm performance. We found that HPWS's positive effect on firm performance is strongest when a firm possesses more slack resources in an unstable industry.