Amid growing uncertainty in the global supply chain and increasing complexity in manufacturing processes, manufacturing firms are facing structural labor shortages in securing and retaining skilled workers and in effectively utilizing human resources....
Amid growing uncertainty in the global supply chain and increasing complexity in manufacturing processes, manufacturing firms are facing structural labor shortages in securing and retaining skilled workers and in effectively utilizing human resources. In manufacturing in particular, labor shortages have become a critical constraint that directly affects supply chain operational performance, including production stability, quality control, and delivery reliability, rather than remaining a narrow issue of human resource management. Despite this importance, prior research in strategic human resource management has tended to conceptualize human resource orientation (HRO) as a normative, culture-level emphasis on the importance of human resources across the organization, or to explain its outcomes in terms of broad organizational capabilities such as agility or innovativeness. As a result, empirical explanations of how HRO is translated into operational and firm performance through specific organizational capabilities in supply chain-intensive industries such as manufacturing remain limited.
To address this gap and help resolve labor shortages and operational constraints faced by manufacturing firms, this study develops a research model grounded in the Source-Positional Advantage-Performance (SPP) framework and the dynamic capability perspective. In this study, HRO is conceptualized not merely as an organizational culture but as an organizational resource that encompasses the strategic role of the HR function in securing and utilizing human resources effectively in manufacturing settings. Furthermore, rather than treating the outcome of HRO as an abstract, firm-wide capability, this study introduces HR-embedded organizational capability (HREOC), defined as a concrete organizational capability in which human resources themselves are accumulated and embedded within the organization in the manufacturing context.
For the empirical test, this study uses data from the fourth wave of the Human Capital Corporate Panel (HCCP II) conducted by the Korea Research Institute for Vocational Education and Training (KRIVET). The sample consists of 194 manufacturing firms, with survey responses aggregated at the firm level. The proposed research model and hypotheses were tested using structural equation modeling (SEM).
The results show that HRO is a significant antecedent of HREOC and that HREOC fully mediates the relationship between HRO and manufacturing firm performance. Specifically, HREOC—comprising investment-based capabilities related to the acquisition and retention of high-quality talent, transformational capabilities associated with trust-based communal organizational culture, managerial capabilities reflected in top management leadership, and output-based capabilities manifested in employee productivity—significantly enhances manufacturing firm performance.
This study extends the strategic human resource management literature by explaining the relationship between HRO and manufacturing firm performance through HREOC as an organization-level capability accumulated and embedded in human resources. By empirically demonstrating the HR orientation and the importance of HR-embedded organizational capability in manufacturing firms facing labor shortages, the findings provide practical implications for improving manufacturing and supply chain operational performance.