People matter: commitment to employees, strategy and performance in Korean firms

People matter: commitment to employees, strategy and performance in Korean firms The human element of enterprise is argued to be a vital resource for strategy execution. We show in a study of Korean businesses how an organization’s commitment to its employees’ well‐being (OCE) can aid in the profitable execution of its positioning strategies. We found that OCE, by itself, sometimes has a weakly positive association with return on assets (ROA). But far more important, we found that ROA is strongly and positively influenced by the interaction between OCE and the dedicated pursuit of Porter’s (1980) strategies for achieving competitive advantage: these are cost leadership, marketing differentiation and innovative differentiation. In short, dedicated positioning strategies appear to be executed more effectively where organizations exhibit a high level of commitment to their employees; and conversely, OCE is apt to have a strong impact on ROA only in the context of a dedicated, that is intensive and thorough, positioning strategy. Copyright © 1999 John Wiley & Sons, Ltd. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Strategic Management Journal Wiley

People matter: commitment to employees, strategy and performance in Korean firms

Strategic Management Journal, Volume 20 (6) – Jun 1, 1999

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Publisher
Wiley
Copyright
Copyright © 1999 John Wiley & Sons, Ltd.
ISSN
0143-2095
eISSN
1097-0266
DOI
10.1002/(SICI)1097-0266(199906)20:6<579::AID-SMJ37>3.0.CO;2-C
Publisher site
See Article on Publisher Site

Abstract

The human element of enterprise is argued to be a vital resource for strategy execution. We show in a study of Korean businesses how an organization’s commitment to its employees’ well‐being (OCE) can aid in the profitable execution of its positioning strategies. We found that OCE, by itself, sometimes has a weakly positive association with return on assets (ROA). But far more important, we found that ROA is strongly and positively influenced by the interaction between OCE and the dedicated pursuit of Porter’s (1980) strategies for achieving competitive advantage: these are cost leadership, marketing differentiation and innovative differentiation. In short, dedicated positioning strategies appear to be executed more effectively where organizations exhibit a high level of commitment to their employees; and conversely, OCE is apt to have a strong impact on ROA only in the context of a dedicated, that is intensive and thorough, positioning strategy. Copyright © 1999 John Wiley & Sons, Ltd.

Journal

Strategic Management JournalWiley

Published: Jun 1, 1999

References

  • Trustworthiness as a source of competitive advantage
    Barney, Barney; Hansen, Hansen
  • Competitive organizational behavior: Toward an organizationally‐based theory of competitive advantage
    Barney, Barney; Zajac, Zajac
  • Configurations of strategy and structure
    Miller, Miller
  • The structural and environmental correlates of business strategy
    Miller, Miller
  • Dynamic capabilities and strategic management
    Teece, Teece; Pisano, Pisano; Shuen, Shuen

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