Building organisational resilience capability in small and medium-sized enterprises: The role of high-performance work systems

Abstract

Although organisational resilience is crucial to small and medium-sized enterprises (SMEs) in turbulent business environments, research has yet to establish whether and how human resource management (HRM) systems can help build an SME's organisational resilience to influence firm performance. Drawing on the perspective of HRM as an internal capability builder and human capital resource theory, we develop a model that depicts how high-performance work systems (HPWSs) build organisational resilience capabilities in the forms of bounce-back and bounce-forward resilience, leading to firm performance. We test our model using data from 1140 participants (including top management team members, middle-level managers, and entry-level employees) from 177 Nigerian SMEs. The structural equation modelling results show that HPWSs contribute to bounce-back resilience via human capital value but to bounce-forward resilience via both human capital value and heterogeneity. We also find that bounce-forward resilience is related to firm performance but bounce-back resilience is not.