The Effect of Human Resource Management Strategies on Firm Performance and Mediating Role of Entrepreneurial Orientation in Volatility Environments

The High level of uncertainty is harmful to the performance of knowledge-based companies. Therefore, this study examines the role of human resource management strategies and entrepreneurial orientation that can play in improving the performance of knowledge-based companies in volatility environments.

In this research, the data collection tool is questionnaire in which reliability has been evaluated by Cronbach's alpha and its validity has been evaluated by content validity, CFA, divergent and convergent validity. The questionnaire was distributed among 227 knowledge-based companies in Tehran Science and Technology Park and was answered by one of the senior managers from each firm. The collected data were analyzed by structural equation modeling with Amos software.

The results showed that human resource management strategies have a significant effect on firm performance by the mediating role of entrepreneurial orientation. The results also showed that human resource recruitment, human resource development and human resource retention have a positive and significant effect on firm performance and entrepreneurial orientation, while human resource exit strategy has a negative and significant effect on both firm performance and entrepreneurial orientation. It was also found that entrepreneurial orientation has a positive and significant effect on firm performance. Finally, the results showed that the volatility environment reduces the impact of entrepreneurial orientation on firm performance.

Based on the results, the improvement of the performance of knowledge-based companies depends on the degree of acceptance and establishment of human resource management strategies and entrepreneurial orientation by the companies. Also, the effect of entrepreneurial orientation on performance is stronger for companies operating in a less volatility environment.