How important is context? The influence of high-performance work systems on entrepreneurial orientation: a mediation analysis

Purpose Scholarly interest is growing in the area of developing entrepreneurial orientation (EO) through the use of coordinated bundles of human resource (HR) practices (high-performance work systems (HPWS)), designed to promote employees’ proactive, innovative and risk-taking behaviors. Though the link between HPWS and EO has been somewhat established, there is an increasing need to shed light on the boundary conditions surrounding this relationship within an integrated framework rather than through isolated or disjointed studies. This is what this study aimed to do. Design/methodology/approach We used a sample of 581 managerial personnel in small and medium-sized enterprises operating in the UAE. We used a time-lagged data collection approach in an effort to address issues of common method bias, in addition to a few other pre- and post-measures. We employed structural equation modeling to analyze the relationships under study, using AMOS for data analysis. Findings This study reveals full mediation effects from self-efficacy and psychological contract theories. Moreover, contrary to expectations, boundary conditions such as perceived organizational support (POS), organizational capital (OC) and knowledge sharing (KS) showed non-significant mediation effects. Originality/value The findings related to significant and non-significant mediation effects are equally important because they both serve to guide the human resource management (HRM) function in what practices to deploy in trying to enhance EO among employees. Based on this study’s results, the HRM function could be more selective in expending resources which target EO, focusing more on the psychological contract and developing entrepreneurial self-efficacy and less on POS, KS and OC. This contributes to the entrepreneurship research in both its practical and theoretical dimensions.