Market Forces, Strategic Management, Human Resource Management Practices and Organizational Performance: A Model Based on a European Sample

Abstract

This study uses structural equation modeling to test a model of the impact of human resources management practices on perceived organizational performance, on a large sample of European companies. The influences of competitive intensity, industry attractiveness, and strategic management are considered in the model, and their direct and indirect influence on organizational performance is assessed. The model produced an adequate fit, and results show that strategic management does influence human resource practices. Human resource flexibility practices and performance management have a positive impact on organizational performance, while training was not found to have a significant impact. A direct positive impact of competitive intensity and industry attractiveness on strategic management was supported by the data, as well as a direct positive effect of industry attractiveness on perceived organizational performance.

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