Human Resource Management Practices and Business Performance: The Mediating Effect of Corporate Entrepreneurship

Abstract

Globalisation is creating profound and substantial changes for businesses and industries worldwide. These changes have forced businesses to re-evaluate their organisational philosophy and strategic approaches to become more competitive. Corporate-level entrepreneurship is indispensable in improving productivity and promoting economic growth. The paper’s purpose was to determine the mediating role of corporate entrepreneurship between human resource management practices (HRMPs) and business performance. Following this purpose, the interrelationship between specific human resource practices, corporate entrepreneurship and business performance was investigated. After that, the mediating role of corporate entrepreneurship in the relationship between human resource practices and business performance was examined. A quantitative, formal, and cross-sectional approach was used. Data were collected using a survey, and self-administered questionnaires were emailed to 744 human resource managers in medium and large businesses in Gauteng. A response rate of 47.6 per cent was achieved as 351 usable questionnaires were received. The results provide empirical evidence that corporate entrepreneurship (CE) is stimulated by better employee relations, selection practices, compensation, high level of employee development and skills training. The evidence further shows that HRMPs influence business performance and that a positive relationship exists between innovation intensity and risk propensity and business performance.