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In this study, we developed and tested a theory of how human resource practices affect the organizational social climate conditions that facilitate knowledge exchange and combination and resultant f i rm performance. A field study of 136 technology companies showed that commitment-based human resource practices were positively related to the organizational social climates of trust, cooperation, and shared codes and language. In turn, these measures of a firms social climate were related to the firms capability to exchange and combine knowledge, a relationship that predicted f irm revenue from new products and services and f irm sales growth. There is a widely held belief that an organizations survival and success are at least partially dependent on the effort, behaviors, and interactions of employees as they carry out the mission and strategy of the f irm (Wright McMahan, 1992). Strategic human resource scholars have argued that companies can effectively influence the interactions, behaviors, and motivation of employees through different human resource (HR) practices (Huselid, 1995; Wright, Dunford, Snell, 2001). In this regard, two HR practice alternatives have emerged in the literature: transaction-based HR practices, which emphasize individual short-term exchange relationships,
Collins et al. (Thu,) studied this question.