This study elucidated disparate mechanisms of how HRM systems developed on the basis of employee-organization relationship (EOR) framework (Tsui, Pearce, Porter, & Tripoli, 1997) affect organizational ambidexterity by using data from 319 Korean firms. After classifying the HRM practices into two dimensions of HRM inducements and investments and HRM expectation-enhancing practices, I clustered the firms into 4 groups based on the level of two HRM dimensions and executed clustered regression. The results showed that the firms with mutual investment forms had positive relationship with both organizational trust and human capital. Organizational trust and human capital predicted both firm's explorative and exploitative performance. Overall, organizational trust and human capital mediated the relationship between mutual investment EOR form and firm performances. This study reveals that in addition to psychological path of social exchange, firms adopting mutual investment EOR forms can enhance the organizational performances of exploration and exploitation by attraction and retention of highly qualified human resources, leading to achieve sustainable competitive advantages.
Jee Yoon Park (Fri,) studied this question.