Effect of HR practice on NPD performance

Purpose – This paper aims to investigate the moderating effects of contextual factors which are environmental uncertainty on the relationship between human resource (HR) exploitation and HR exploration with new product development (NPD) performance and the mediating role of cross-functional integration between them. The main question this study wants to answer is how a firm implements HR practices to gain better performance under different environment factors. This study is the first empirical research which testifies the influence of HR exploitation and HR exploration on NPD performance. Design/methodology/approach – This study uses regression analysis to examine the moderating effect of environment uncertainty and structural equation modeling to test mediating effect of cross-functional integration. Findings – The result shows that HR exploitation influences NPD performance to a higher degree when environmental uncertainty is low than high. And HR exploration plays a more important role when environmental uncertainty is high; HR exploitation influences internal integration significantly, and the effect of HR exploration on external integration is significant; and internal integration and external integration mediate the relationship between HR exploitation/exploration and NPD performance, respectively. Originality/value – These findings not only contribute to the literature but also provide a view for organizations in making the right decision of exploitative or explorative practices under the giving environment factor which organization facing and achieving better performance.