High performance work system and corporate entrepreneurship : the mediating effect of exploration and exploitation

This study aims to investigate the relationship between high performance work system (HPWS) and all three dimensions of corporate entrepreneurship (CE): innovation, venturing and strategic renewal. The paper will further develop a mediation model in which HPWS affects all these dimensions of CE through two specific dimensions of organisational ambidexterity (OA): exploration and exploitation. A survey questionnaire was designed to test the validity of this research model and hypotheses. Participants were recruited from top Malaysian public firms listed in Forbes’ Global 2000 most powerful and valuable public firms in 2016. The data were tested using correlation analysis to identify the relationship between these variables. This was followed by the mediation analysis to further examine the mediating effect of exploration and exploitation on the association between HPWS and all three dimensions of CE. In a sample of 102 employees from 13 top public firms in Malaysia, it was found that HPWS is positively related to all three dimensions of CE (innovation, venturing, strategic renewal), and this relation is mediated by both exploration and exploitation. It is hoped that these findings will provide valuable insights and guidance to managers to focus on the design of firm-level HPWS, and align them with specific initiatives in exploration and exploitation in order to effectively manage conflicting demands for different CE activities, which in turn will help create a source of sustainable competitive advantage and superior financial performance for Malaysian firms