Human Resource Strategy and Firm Performance: Taiwanese Firms in China and Taiwan

This study evaluates a model of the relationship between HR strategy and organizational performance in locally owned Taiwanese companies and in Taiwanese-owned firms operating in China. The pressure many East Asian economies feel as a consequence of globalization and the fallout from the 1997 Asian financial crisis means that flexible and adaptive employment systems are potentially useful in aiding these economies to regain competitiveness. We use structural equation modeling techniques to demonstrate the high performance work systems have a strongly positive impact on perceived firm performance, but there is no appreciable reverse effect of firm performance on the proclivity of firms to use high performance work systems.