The Effect of Slack Resources on the Relationship between Human Resource Management and Differences in Strategic Focus

To effectively respond to the demands of a changing market, a firm must constantly provide better products and services that are recognized as having better quality and/or being innovative. Notably, various studies have shown that better human resource management is a foundation to providing improved products and services. Regarding a firm’s strategic and operational focus on quality, innovation, or both, many studies have argued that a different type of resource is required for the improvement of quality and/or innovation of product and services. Such resources can be classified as exploratory resources to create a new product/service and exploitative resources to redefine and deepen current offerings. To establish ambidexterity within a firm, some firms may emphasize a balance between exploratory and exploitative resources. Although the understanding of slack resources is quite important, studies on the effects of slack resources to provide flexibility of firm’s strategic and operational execution on firm’s performance have been controversial. In the case of explorative resources, flexible resource management is considered important due to higher uncertainty in comparison to exploitative resource management, which typically requires more slack resources. Thus, in this study, we argue that the level of quality in human resource management differently influences the effective use of resources, either exploitative or explorative resources. We also attempt to investigate how slack resources affect the relationship between quality of human resource management and different strategic focus, either exploitation or exploration