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RAE-Revista de Administração de Empresas (Journal of Business Management), 2019. V. 59, N. 2

This edition includes four articles: “The missing link between the high performance work practices and the perception organizational politics,” by Adnan Riaz, Saima Batool, and Mohd Shamsuri Md Saad; “Relationship between innovation and performance: Impact of competitive intensity and the organizational slack,” by Diego Armando Marín-Idárraga and Juan Carlos Cuartas-Marín; “Social and family life impact of shift work from the perspective of family members,” by Daniela Costa and Isabel Soares Silva; and, finally, “Structural cartography for literature review: Revealing the underlying structure of a literature though a bibliographic atlas,” by Joaquim Heck and Ion Georgiou. The Perspectives section includes two texts relevant to the area of logistics and operations: “Ambidestria and coevolution in operations: Integrating theory and practice” and “The creativity dilemma,” by Ely Laureano Paiva and Elena Revilla, respectively. In the Book review section, Luiz Alex Silva Saraiva, in “From the Agreste to the world,” presents his point of view on the work Filhos das feiras: Uma composição do campo de negócios agreste (Children of the fairs: A composition of the business field of the Agreste) by Márcio Sá.

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RAE-Revista de Administração de Empresas (Journal of Business Management), 2019. V. 59, N. 2

  1. 1. ARTICLES The missing link between high performance work practices and perceived organizational politics Adnan Riaz | Saima Batool | Mohd Shamsuri Md Saad Relationship between innovation and performance: Impact of competitive intensity and the organizational slack Diego Armando Marín-Idárraga | Juan Carlos Cuartas-Marín Social and family life impact of shift work from the perspective of family members Daniela Costa | Isabel Soares Silva Structural cartography for literature review: Revealing the underlying structure of a literature through a bibliographic atlas Joaquim Heck | Ion Georgiou PERSPECTIVES Ambidestria and coevolution in operations: Integrating theory and practice Ely Laureano Paiva The creativity dilemma Elena Revilla BOOK REVIEWS From the Agreste to the world Luiz Alex Silva Saraiva RESEARCH AND KNOWLEDGE V. 59, N. 2, March–April 2019 fgv.br/rae
  2. 2. 1 © RAE | São Paulo | 59(2) | March-April 2019 RAE-Revista de Administração de Empresas (Journal of Business Management) ISSN 0034-7590 CONTENTS EDITORIAL 80 HUMOR IN THE ACADEMIA AND RESEARCH ON HUMOR Humor na academia e pesquisas sobre humor Humor en la academia y investigaciones sobre el humor Maria José Tonelli | Felipe Zambaldi ARTICLES | ARTIGOS | ARTÍCULOS 82 THE MISSING LINK BETWEEN HIGH PERFORMANCE WORK PRACTICES AND PERCEIVED ORGANIZATIONAL POLITICS O elo perdido entre o sistema de trabalho de alto desempenho e a percepção de política organizacional El eslabón perdido entre prácticas laborales de alto rendimiento y percepción de la política organizacional Adnan Riaz | Saima Batool | Mohd Shamsuri Md Saad 95 RELATIONSHIP BETWEEN INNOVATION AND PERFORMANCE: IMPACT OF COMPETITIVE INTENSITY AND THE ORGANIZATIONAL SLACK Relação entre inovação e desempenho: Impacto da intensidade competitiva e do slack organizacional Relación entre la innovación y el desempeño: Impacto de la intensidade competitiva y el slack organizacional Diego Armando Marín-Idárraga | Juan Carlos Cuartas-Marín 108 SOCIAL AND FAMILY LIFE IMPACT OF SHIFT WORK FROM THE PERSPECTIVE OF FAMILY MEMBERS Impactos na vida social e familiar do trabalho por turnos na perspectiva dos familiares Impacto en la vida social y familiar del trabajo por turnos desde la perspectiva de los familiares Daniela Costa | Isabel Soares Silva 121 STRUCTURAL CARTOGRAPHY FOR LITERATURE REVIEW: REVEALING THE UNDERLYING STRUCTURE OF A LITERATURE THROUGH A BIBLIOGRAPHIC ATLAS Cartografia estrutural para revisão de literatura: Revelando a estrutura subjacente de uma literatura por meio de um atlas bibliográfico Cartografía estructural para la revisión de literatura: Revelando la estrutura subyacente de una literatura por medio de un atlas bibliográfico Joaquim Heck | Ion Georgiou PERSPECTIVAS | PERSPECTIVES 144 AMBIDEXTERITY AND CO-EVOLUTION IN OPERATIONS: INTEGRATING THEORY AND PRACTICE Ambidestria e coevolução em operações: Integrando teoria e prática Ambidestría y coevolución en operaciones: Integrando teoría y práctica] Ely Laureano Paiva 149 THE CREATIVITY DILEMMA O dilema da criatividade El dilema de la creatividad Elena Revilla BOOK REVIEW | RESENHA | RESEÑA 154 FROM AGRESTE TO THE WORLD Do agreste para o mundo Del agreste para el mundo Luiz Alex Silva Saraiva
  3. 3. RAE-Revista de Administração de Empresas (Journal of Business Management) ISSN 0034-759080 © RAE | São Paulo | 59(2) | March-April 2019 | 80-81 EDITORIAL Felipe Zambaldi Editor-adjunto Maria José Tonelli Editora-chefe HUMOR INTHE ACADEMIA AND RESEARCH ON HUMOR We started the editorial of the previous edition—the first of the year—with a brief joke and were confronted by some colleagues as if we had committed heresy: “What is this in an editorial?” Well, perhaps it was not a good joke, but the question was great and calls for reflection. Does the academia necessarily need to be bland and colorless? Cannot humor be part of researchers’ lives? Do we need to be stern and monotonous? To me, this view seems to disregard studies that evidence the role of humor in increasing creativity, well-being, and health as well as producing better results in organizations (Mesmer-Magnus, Glew, & Viswesvaran, 2012). Humor is embedded in work processes (Korczynski, 2011) and is a fundamental element in the development of human relationships. Humor facilitates work (Rodrigues & Collinson, 1995), as the seminal article on humor in the area of organizational studies, written by the Brazilian researcher Suzana Braga Rodrigues, states. Humor is important for individuals, organizations, and the society (Duarte & Duarte, 2016). There is even a journal focused exclusively on humor: The European Journal of Humour Research. Reinforcing the positive role of this human trait for work, the articles by Romero and Cruthirds (2006), considering the international context, and Castro Silva and Brito (2014), considering the Brazilian context, show that humor has a positive impact on communication, group cohesion, and leadership. Humor is part of the organizational discourse (Koester, 2010) and workspace (Chefneux, 2015; Vivona, 2014). In summary, the role of humor in sociability at work seems to be fundamental for the proper functioning of organizations. However, humor is not just a positive aspect of human behavior. It may carry cynicism, sexism, and aggressiveness. It may also be the first step toward bullying and several prejudices that surround humans, the most common being related to race, ethnicity, gender, and age (Irigaray, Saraiva, & Carrieri, 2010; Korczynski, 2011; Westwood & Johnston, 2012; Wood & Caldas, 2005). Humor is a form of resistance that may lead to sabotage (Alcadipani, Hassard, & Islam, 2018; Medeiros & Alcadipani, 2016) and, sometimes, is the only way to demonstrate dissatisfaction at work(Rodrigues & Collinson, 1995). It is also a way to express forms of control (Huber & Brown, 2017) that may cause laughter (Valadão, Medeiros, & Teixeira, 2017). Because of new technologies, humor can take other forms on the internet, leading to new strategies to criticize organizational processes (Furtado, Carrieri, & Bretas, 2014). Humor permeates the world of work and organizations (Westwood & Rhodes, 2007) as well as various spheres of life. However, what type of organization does not allow humor in the 21st century? Total institutions, as Goffman (1974) has shown us in Manicômios, prisões e conventos (Asylums: Essays on the Social Situation of Mental Patients and Other Inmates) Humor may be appropriate or inappropriate (Huber & Brown, 2017; Vivona, 2014). Besides assessing humor, we may ask ourselves what the absence of humor means. It is worth researching this to understand the role of humor in academia. This edition includes four articles: “The missing link between the high performance work practices and the perception organizational politics,” by Adnan Riaz, Saima Batool, and Mohd Shamsuri Md Saad; “Relationship between innovation and performance: Impact of competitive intensity and the organizational slack,” by Diego Armando Marín-Idárraga and Juan Carlos Cuartas-Marín; “ Social and family life impact of shift work from the perspective of family members,” by Daniela Costa and Isabel Soares Silva; and, finally, “Structural cartography for literature review: Revealing the underlying structure of a literature though a bibliographic atlas,” by Joaquim Heck and Ion Georgiou. The Perspectives section includes two texts relevant to the area of logistics and operations: “Ambidestria and coevolution in operations: Integrating theory and practice” and “The creativity dilemma,” by Ely Laureano Paiva and Elena Revilla, respectively. In the Book review section, Luiz Alex Silva Saraiva, in “From the Agreste to the world,” presents his point of view on the work Filhos das feiras: Uma composição do campo de negócios agreste (Children of the fairs: A composition of the business field of the Agreste) by Márcio Sá. Enjoy reading! Maria José Tonelli1 | ORCID: 0000-0002-6585-1493 Felipe Zambaldi1 | ORCID: 0000-0002-5378-6444 1 Fundação Getulio Vargas Escola de Administração de Empresas de São Paulo, São Paulo, SP, Brazil Translated version DOI: http://dx.doi.org/10.1590/S0034-759020190201
  4. 4. RAE-Revista de Administração de Empresas (Journal of Business Management) ISSN 0034-759081 © RAE | São Paulo | 59(2) | March-April 2019 | 80-81 Editorial REFERENCES Alcadipani, R., Hassard, J., & Islam, G. (2018). “I shot the sheriff”: Irony, sarcasm and the changing nature of work- place resistance. Journal of Management Studies, 55(8), 1452-1487. doi:10.1111/joms.12356 Castro Silva, R. R. C., & Brito, M. J. (2014). Humor no espaço organizacional: um estudo interpretativo em um call center. Revista Eletrônica de Gestão Organizacional, 12(2), 113-124. Chefneux, G. (2015). Humour at work. Language and Dialogue, 5(3), 381-407. doi:10.1075/ld.5.3.02che Duarte, S. R., & Duarte, L. C. R. de P. (2016). O humor nas organizações: Um estudo epistemológico. Revista Hospi­ talidade, 13(2), 336-357. Furtado, R. A., Carrieri, A. de P., & Bretas, P. F. F. (2014). Humor na internet: Trabalhadores utilizam novas estraté- gias para protestar contra demissões e terceirizações. Revista de Administração (São Paulo), 49(1), 33-44. doi:10.5700/rausp1129 Goffman, I. (1974). Manicômios, prisõese conventos.São Paulo,SP: Perspectiva.Huber, G., & Brown, A. (2017). Identi- ty work, humour and disciplinary power. Organization Studies, 38(8), 1107-1126. doi:10.1177/0170840616677632 Irigaray, H. A. R., Saraiva, L. A. S., & Carrieri, A. de P. (2010). Humor e discriminação por orientação sexual no âmbito organizacional. Revista de Administração Contemporânea, 14(5), 890-906. doi:10.1590/S1415- 65552010000500008 Koester, A. (2010). Workplace discourse. London, UK: Continuum International Publishing Group. Korczynski, M. (2011). The dialectical sense of humour: Routine joking in a taylorized factory. Organization Studies, 32(10), 1421-1439. doi:10.1177/0170840611421256 Medeiros, C. R. de O., & Alcadipani, R. (2016). In the corporate backstage, the taste of revenge: Misbehaviour and humor as form of resistance and subversion. Revista de Administração (São Paulo), 51(2), 123-136. doi:10.5700/ rausp1229 Mesmer-Magnus, J., Glew, D. J., & Viswesvaran, C. (2012). A meta-analysis of positive humour in the workplace. Journal of Managerial Psychology, 27(2), 155-190. doi:10.1108/02683941211199554 Rodrigues, S. B., & Collison, D. L. (1995). Having fun? Humour as resistance in Brazil. Organization Studies, 16(5), 739-768. doi:10.1177/017084069501600501 Romero, E. J., & Cruthirds, K. (2006). The use of humour in the workplace. Academy of Management Perspectives, 20(2). doi:10.5465/amp.2006.20591005 Valadão, V. M., Medeiros, C. R. de O., & Teixeira, F. D. (2017). Luz, câmera, ação! Quando a resistência ao poder e controle organizacional provoca o riso. Revista Interdisciplinar de Gestão Social, 6(2), 75-92. doi:10.21714/2317- 2428/2017v6n2p75-92 Vivona, B. D. (2014). “To laugh or not to laugh”: Understanding the appropriateness of humour and joking in the workplace. The European Journal of Humour Research, 2(1). doi:10.7592/EJHR2014.2.1.vivona Westwood, R., & Johnston, A. (2012). Reclaiming authentic selves: Control, resistive humour and identity work in the office. Organization, 19(6), 787-808. doi:10.1177/1350508411422583 Westwood, R., & Rhodes, C. (Eds.). (2007). Humour, work and organization. London, UK: Routledge. Wood, T., Jr., & Caldas, M. P. (2005). Rindo do quê? Como consultores reagem ao humor crítico e à ironia sobre sua profissão. Organização e Sociedade, 12(34), 83-10. doi:10.1590/S1984-92302005000300006
  5. 5. RAE-Revista de Administração de Empresas (Journal of Business Management) ISSN 0034-759082 © RAE | São Paulo | 59(2) | March-April 2019 | 82-94 ADNAN RIAZ1 adnanriaz.aiou@gmail.com ORCID: 0000-0001-8185-9316 SAIMA BATOOL2 saimabatool601@gmail.com ORCID: 0000-0002-2269-5494 MOHD SHAMSURI MD SAAD3 shamsuri@utem.edu.my ORCID: 0000-0003-2655-2607 1 Allama Iqbal Open University, Department of Business Administration, Islamabad, Pakistan 2 Army Public College of Management and Sciences, Islamabad, Pakistan 3 Universiti Teknikal Malaysia Melaka, Melaka, Malaysia ARTICLES Submitted 01.21.2018. Approved 09.03.2018 Evaluated through a double-blind review process. Scientific Editor: Pablo Isla Original version DOI: http://dx.doi.org/10.1590/S0034-759020190202 THE MISSING LINK BETWEEN HIGH PERFORMANCE WORK PRACTICES AND PERCEIVED ORGANIZATIONAL POLITICS O elo perdido entre o sistema de trabalho de alto desempenho e a percepção de política organizacional El eslabón perdido entre prácticas laborales de alto rendimiento y percepción de la política organizacional ABSTRACT A vast majority of research characterizes organizational politics as an aversive phenomenon and thus recommends exploring the factors that minimize its intensity. This study primarily endeavored to exa- mine the role of high performance work practices (HPWPs) in controlling organizational politics. The moderating influence of Machiavellian personalities on HPWPs- politics was also evaluated. Through a questionnaire survey, 243 responses were obtained from engineers working in a local industrial area of capital city of Pakistan. The results showed an inverse relationship between HPWPs and perceived organizational politics (POP), and the moderating role of Machiavellianism was substantiated. Practical implications are presented based on the study results. KEYWORDS | High performance work practices, Machiavellian, perceived organizational politics, engi- neering sector, time-lagged study. RESUMO A grande maioria das pesquisas caracteriza a política organizacional como um fenômeno aversivo, portanto recomenda que sejam explorados os fatores para minimizar a sua intensidade. Este estudo objetivou principalmente examinar o papel das práticas do Sistema de Trabalho de Alto Desempenho (STAD) no controle da política organizacional. A influência moderadora das personalidades maquiavé­ licas também foi avaliada nos STAD em relação à percepção de política na organização (PPO). Por meio de questionário, foram obtidas 243 respostas de engenheiros que trabalham na área industrial local. Os resultados mostraram uma relação inversa entre STAD e PPO. Da mesma forma, o papel moderador do maquiavelismo foi confirmado. A discussão e as implicações práticas são apresentadas com base nos resultados do estudo. PALAVRAS-CHAVE | Práticas de trabalho de alto desempenho, maquiavelismo, percepção de política na organização, setor de engenharia, estudo demorado. RESUMEN Una vasta mayoría de investigaciones caracteriza a las políticas organizacionales como un fenómeno aversivo, por consiguiente, recomendado para explorar los factores para minimizar la intensidad. Este estudio intenta primariamente analizar el papel de las prácticas laborales de alto rendimiento (high per­ formance work practices [HPWPs]) en controlar las políticas organizacionales. La influencia moderadora de personalidades maquiavélicas también se evaluó en HPWPs para la relación de políticas percibidas. A través de una encuesta con cuestionario, se obtuvieron 243 respuestas de ingenieros que trabajan en el área industrial local. Los resultados presentados mostraron una relación inversa entre HPWPs y la percepción de la política organizacional. Asimismo se corroboró el papel moderador del maquiavelismo. El debate y las implicaciones prácticas se presentan con base en los resultados del estudio. PALABRAS CLAVE | Prácticas laborales de alto rendimiento, maquiavelismo, percepción de la política organizacional, sector de ingeniería, estudio retrasado.
  6. 6. ISSN 0034-7590 ARTICLES | THE MISSING LINK BETWEEN HIGH PERFORMANCE WORK PRACTICES AND PERCEIVED ORGANIZATIONAL POLITICS Adnan Riaz | Saima Batool | Mohd Shamsuri Md Saad 83 © RAE | São Paulo | 59(2) | March-April 2019 | 82-94 INTRODUCTION Organizational politics has been a key topic of discussion since many decades, primarily for two reasons. First, politics is inevitable and prevailswithvarying intensity, irrespective ofthe nature, culture, and size of the organization (Witt, Andrews, & Kacmar, 2000). Second, politics is mostly perceived to be harmful, so there is a need to address it by exploring its causes (Meisler &Vigoda-Gadot, 2014). Various organizational and job-related factors have been highlighted as key antecedents of organizational politics. Despite categorical studies on minimizing politicking in the organization, extant research lacks any clear understanding of the impact of high performance work practices (HPWPs) on organizational politics. Previous studies highlight the role of certain human resources (HR) practices to control organizational politics (commonly measured as perceived organizational politics [POP]). However, HPWPs are not used as a holistic construct to predict POP, as pointed out by Atinc, Darrat, Fuller, and Parker (2010). Since organizations have keenly realized the importance of HR practices to cope with adversities and future challenges (Paré &Tremblay, 2007; Peacock, 2017), this study would help to address the negative effects of organizational politics by applying a specific set of key HPWPs. Organizations of all types have to face politics in their working environments in different forms (Bodla & Danish, 2009). Initially, research in this particular domain was more focused on examining the nature, causes, and consequences of politics in broad sectors and regional areas. By accepting politics as a reality of organizational life, recently, researchers’ focus has shifted to examining models of organizational politics among professional groups, such as nurses (Basar & Basim, 2016), teachers (Gibson, 2006), and frontline hotel employees (Karatepe, Babakus, & Yavas, 2012)—especiallygroupsthatare largelyresponsible for the success and failure of any organization. Engineers and employees involved in highlyspecialized tasksare morevulnerable to politicsbecause of their resource dependence and dominantrole in organizationallife. By contrast, relationships between organizational- level factors and outcomes are susceptible to personality and dispositional factors (Kooij et al., 2013; Sendjaya, Pekerti, Härtel, Hirst, & Butarbutar, 2016). For most of the early management researches, researchers focused on possible moderators changing the strengths and directions of the relationships (Dawson, 2014). Neglecting situational factors may challenge the causal relationships. Relationships between HPWPs and outcomes may vary due to individual differences. Previous studies have shown the Machiavellian dark side of personality attributes, wherein these personalities not only involve themselves in political maneuverings but are also considered the proponents of politics (Kacmar, Bozeman, Carlson, & Anthony, 1999; O’connor & Morrison, 2001). Therefore, it would be interesting to scrutinize the HPWPs-POP association for Machiavellian and non- Machiavellian personalities. The environment plays an important role in shaping personalities (Göllner et al., 2017) . Machiavellian (or Mach) tendencies are believed to be developed in retrenched environments (Tucker, Lowman, & Marino, 2016). Particularly, culture plays an important role in developing and helping Dark Triad personalities (O’Boyle, Forsyth, Banks, & McDaniel, 2012). It would be interesting to observe the extent to which engineers show Mach tendencies and how these tendencies affect the postulated HPWPs-POP relationship. In sum, this study contributes in different ways. First, although organizational politics has been an area of interest for various scholars, the relationship between HPWPs as a consolidated measure and POP is yet to be established (Atinc, Darrat, Fuller, & Parker, 2010). Second, Mach has been conclusively found to be a key personality trait that perceives and exercises politics in the organization (Valle & Perrewe, 2000). In this study, Mach’s role as a moderator is explored on the postulated relationship. Lastly, this study also strives to satisfy the concern of Hofstede and Hofstede (2005) who categorically emphasized that theories and research findings should be generalized cautiously. Dissimilarities among countries with respect to cultural dimensions recommend the need for country-specific findings. Hence, this study conducts detailed analysis of the impact of HPWPs on POP with the moderating role of Machiavellianism among employees working as engineers. LITERATURE REVIEW HPWPs HPWPs are defined as a set of consistent, integrated, and interdependent HR practices (Guthrie, 2001; Huselid & Becker, 1995; Pfeffer, 1998; Zacharatos, Barling, & Iverson, 2005). They play an important role in developing organizational competencies and promoting a social relationship among employees (Shin & Konrad, 2017). Therefore, organizations need to know the specific bundle of HPWPs that best suits their requirements and helps them acquire the desired competencies (Posthuma, Campion, Masimova, & Campion, 2013). According to Harley, Allen, and Sargent (2007), it is difficult to determine the best combination of HPWPs. However, some examples of HPWPs include procedural hiring, training and skill development opportunities, compensation, decision-making participation, flexible working hours, information sharing, empowerment, and job design
  7. 7. ISSN 0034-7590 ARTICLES | THE MISSING LINK BETWEEN HIGH PERFORMANCE WORK PRACTICES AND PERCEIVED ORGANIZATIONAL POLITICS Adnan Riaz | Saima Batool | Mohd Shamsuri Md Saad 84 © RAE | São Paulo | 59(2) | March-April 2019 | 82-94 (Combs, Liu, Hall, & Ketchen, 2006; Rabl, Jayasinghe, Gerhart, & Kühlmann, 2014). For this study, we follow Bamberger, Biron, and Meshoulam (2014)’s integrated HPWPs model comprising selective recruitment, training and development, career progression, internal promotions, job guarantee, target-based performance, incentives and rewards, and active participation. As summarized by Ma, Long, Zhang, Zhang, and Lam (2017), HPWPs play a significant role in fostering social harmony among organizational employees. The focus of this study is to validate the link between HPWPs and positive organizational behavior by examining engineers who are generally thought to be professionals and responsible for organizational success and failure (Hiebert, 2001; Lobontiu, 2010). Following the tenet of the social exchange theory (Blau, 1964), organizations offering the best HR bundles are basically developing psychological reservoirs for the employees to face workplace challenges. Employees feel honored upon receiving extra care from the organization and may reciprocate accordingly during deleterious situations (Gouldner, 1960). POP POP is defined as the extent to which employees perceive political behavior and maneuvering in their work environment that lead to unjust and unfair results (Ferris, Russ, & Fandt, 1989). It is widely believed that individual behavior is the outcome of perception rather than reality itself (e.g., Gandz & Murray, 1980; Porter, Crampon, & Smith, 1976). Empirical results also support the strong association between perceived reality and employees’ actions and performances (Purves, Morgenstern, & Wojtach, 2015). This is the reason POP has resulted in adverse consequences. For example, Ferris et al. (1998) concluded that POP led to employees’ withdrawal behavior, reduced job involvement, job anxiety, and job dissatisfaction. Some other empirical evidences found POP to be an antecedent to psychological strain, job dissatisfaction, low performance, and low organizational citizenship behavior (Chang, Rosen, & Levy, 2009; Miller, Rutherford, & Kolodinsky, 2008). To counter organizational politics, a number of factors have been highlighted. For example, a transparent and fair environment, role clarity, growth opportunities, and resourcefulness are among the few factors to control POP (Muhammad, 2007; Poon, 2003; Thau & Mitchell, 2010; Valle & Perrewe, 2000). HPWPs and POP The shared mental model (SMM) explicates the mutually held assumptions and perceptions that correspond with collective conduct (Fiore, Salas, & Cannon-Bowers, 2001). SMMs display a dominant influence over individuals’ behavior (Maynard & Gilson, 2014). Unique and consistent HPWPs such as extensive staffing, training, decentralization, open communication, and performance-oriented compensation result in shared feelings of care, equality, support, responsiveness, and trust in the organization. This subsequently reduces the perception of inequality, favoritism, and self-serving behavior, which are termed as organizational politics in organizational behavior literature. Employees also have a shared understanding of the procedures, practices, and policies of the organization, as well as the type of behaviors that are desired and appreciated. Organizational support ultimately refrains them from exhibiting any illegitimate behavior not sanctioned by the organizational authorities (Bowen & Ostroff, 2004). Thus, we may hypothesize the following: H1: HPWPs may reduce the POP in the organization. Mach Personality The Mach is an antagonistic and hostile personality trait (Christie, Geis, Festinger, & Schachter, 2013). Wilson, Near, and Miller (1996) defined Machiavellianism as a strategy to manipulate others for one’s self-interest even at the cost of the others. Machs are intrinsically inclined to be manipulative, conniving, and deceptive. They use other people as stepping-stones to pursue their own agenda. Studies ascertain that Machs have strong interpersonal skills to influence people, which they use optimally to manipulate and persuade others (Belschak, Muhammad, & Den Hartog, 2016; Cohen, 2018). Mach Personality and POP According to Adams, Treadway, and Stepina (2008), personality traits are the most influential factors for predicting POP, compared to any other personal variable. This is because they stimulate the pattern of how employees identify and understand organizational politics. Machs are perceived to be strongly related to POP, because high-Machs have an innate tendency to understand human instincts and can do almost anything to promote their self-interest (Bereczkei, 2017). According to Sussman, Adams, Kuzmits, and Raho (2002), high-Machs can exercise different impression management and political tactics to obtain results for personal success and growth. Previous researchers have shown a strong positive relationship between Machiavellianism and POP (O’connor & Morrison, 2001; Valle & Perrewe, 2000). The famous model of POP presented by Ferris et al. (1989) also characterizes Mach personalities as the strong predictors of POP.
  8. 8. ISSN 0034-7590 ARTICLES | THE MISSING LINK BETWEEN HIGH PERFORMANCE WORK PRACTICES AND PERCEIVED ORGANIZATIONAL POLITICS Adnan Riaz | Saima Batool | Mohd Shamsuri Md Saad 85 © RAE | São Paulo | 59(2) | March-April 2019 | 82-94 Later, the study of Stepanski, Kershaw, and Arkakelian (2000) also supported this relationship. Hence, we may assume the following: H2: Machiavellianism significantly influences POP. A Machiavellian as Moderator between HPWPs and POP Machs are thoroughly concerned with advancing their self- interest while disregarding organizational well-being (Sakalaki, Richardson, & Thépaut, 2007). They may exercise a variety of influence tactics for building political connections, including deliberate self-disclosure and intimidation (Elias, 2015). In a colloquial sense, the political atmosphere becomes characteristically risky, signifying that those who hoard supremacy and inspiration may enjoy success (Christie et al., 2013; Pilch & Turska, 2015; Ruiz-Palomino & Bañón-Gomis, 2016). In organizational life, Ferris et al. (1989) claimed that Machs are the proponents and predecessors of political behaviors. Recently, a few empirical findings concluded that Machiavellianism is a strong predictor of incivility (Furtner, Maran, & Rauthmann, 2017), poor job performance (Blickle, Schütte, & Genau, 2018), counterproductive work behaviors (Cohen, 2018), and workplace bullying (Pilch & Turska, 2015). It has already been tested as a moderator between various organizationally desired relationships in different settings (Reimers & Barbuto, 2002; Wei & Chen, 2012; Zagenczyk et al., 2013). Machs, being self-promoting in nature, disregard any contribution from either an individual, group, or organization. Their self-centered ideology forbids them from acknowledging the support given by the organization (Bereczkei, 2017). Based on these arguments, we may reasonably assume the following: H3: Machs moderate the relationship between HPWPs and POP such that the relationship is weaker for individuals who have high-Mach tendencies. METHODOLOGY Subjects / Sample The objective of this study was to examine the POP among qualified engineers in association with HPWPs at their workplace. Qualified engineers for this survey comprised employees who (a) worked on permanent (full-time) basis, (b) had one year of job experience, (c) and whose supervisors had conducted at least one performance appraisal of them. The sample frame was drawn from the HR departments of the respective organizations, while the selection of respondents was based on the simple random sampling method. The contacts of the second author helped us throughout the questionnaire administration process, being incumbent in the HR department of one of the organizations. The engineering job involves relatively more administrative conflicts as it is highly technical and focused, has over-arching goals, and must provide support services to diverse customers (Leckie, Pettigrew, & Sylvain, 1996). The POP can be held at any hierarchical level, and therefore engineers working at different hierarchical levels constituted the population of the study. The questionnaire was divided into two parts with a covering letter explaining the purpose of study, strict confidentiality measures, and contact information of the principal investigator. The first part was about the items related to HPWPs and Machiavellianism, whereas the second part was about measuring POP. Since the data were collected at two different points of time, both parts contained demographical information of the respondents with a unique code assigned for further match making. Considering the level of understanding of engineers, all the measures were in English and adopted from tested and authentic sources. The questionnaires were distributed in sealed envelopes through either postal mail or focal persons responsible for administering them within their organizations. To ensure confidentiality, the survey was anonymous, and the respondents were required not to reveal their identities. Moreover, to control the social desirability response, respondents’ participation in the survey was voluntary, and they could leave at any point during the data collection process. Furthermore, respondents could send the questionnaire directly to the principal investigator if they wished to do so. This was basically a time-lagged study. In the first interval (T1), respondents were required to fill part-I. Then, after one month (T2), part-II had to be filled in along with the demographical part. Unique codes assigned to each questionnaire helped us to make a match, while demographical information further validated the same respondents. A sample size of 250 and above is deemed appropriate to test the postulated relationships (MacCallum, Widaman, Zhang, & Hong, 1999). Therefore, more than 400 questionnaires were distributed to the target population using email and the local postage service. At T1, a total of 288 questionnaires were received, which were subsequently recorded using IBM SPSS 20.0. After T2, a total of 243 responses were received. Thus, 243 total responses were analyzed to test the hypotheses. Studies conducted in the Asian context generally reflect a high response rate (Abbas, Raja, Darr, & Bouckenooghe, 2014). A few questionnaires were dropped from the analysis based on the following shortcomings (not attempted in true spirit):
  9. 9. ISSN 0034-7590 ARTICLES | THE MISSING LINK BETWEEN HIGH PERFORMANCE WORK PRACTICES AND PERCEIVED ORGANIZATIONAL POLITICS Adnan Riaz | Saima Batool | Mohd Shamsuri Md Saad 86 © RAE | São Paulo | 59(2) | March-April 2019 | 82-94 • Incomplete responses, • Reverse entries cautions, and • Delayed responses / responses received much later than the stipulated one-month time period. The demographic data show that 59% of the respondents belonged to the information technology department, and a majority were males (92%). Around 55% respondents were aged between 31 to 40 years. The sample data also revealed that 72% of respondents had acquired a master’s degree, and 83% were in middle-level job positions. The data also reflected considerable variation in the service duration, as 39% had 6–10 years’ service, 37% had 10 or more years of service, and 18% had 1–5 years of service length. Moreover, 17% of respondents had income of $600–$700, 42% had income of $700–$800, and 22% had income of $800–$900. Measures All the statements were anchored on a five-point Likert scale ranging from 1 (strongly disagree) to 5 (strongly agree). POP POP was measured using the 12 items on the POP scale from the study of Kacmar and Ferris (1991). This shorter version has helped different studies and was found reliable by Kacmar and Carlson (1997) (α = 0.87) and Vigoda and Cohen (2002) (α = 0.77). Machiavellianism To measure the Mach personality, five items were taken from the study of Christie and Geis (1970). Each respondent (engineer) was asked to specify the magnitude of his or her agreement with every item. This smaller version was also found reliable by Christie and Geis (1970) with α = 0.87. HPWPs Following the suggestion of Becker and Huselid (1998), different researchers (Delery & Shaw, 2001; Guest, 1999) had combined the measurements of various HR practices to form the consolidated HPWPs items set. Following the same analogy, a scale comprising 27 items was adopted from Bamberger and Meshoulam (2000) to measure the unified HPWPs. The scale had already been found reliable (α = 0.76) by Sun, Aryee, and Law (2007). Control Variables In the current study, two demographical factors, that is, Income and Service Duration showed significant effects on POP and were used as control variables. A one-way analysis of variance comparing POP across Income (F = 3.44, p<0.005) and Service Duration (F = 3.003, p< 0.005) revealed significant differences in the outcome variable. RESULTS Scale Validity and Reliability Reliability of constructs was ascertained by calculating the Cronbach’s alpha, which was higher than 0.93 for all constructs above the threshold of 0.7 (Nunnally & Bernstein, 1994). However, Cronbach’s alpha has been criticized for being oversimplified and a lower-bound statistic to gauge true reliabilities. Therefore, composite reliabilities (CR) were also evaluated, which, if higher than 0.7, indicate good reliability (Churchill, 1979; Hair, Black, Babin, Anderson, & Tatham, 1998). The CR values in our study range from 0.95 to 0.97, indicating relatively good reliabilities of the measured constructs. The construct validity of the measurement model was evaluated with the help of confirmatory factor analysis (Hair et al., 1998) using the AMOS program Version-18. Convergent validity of the measurement was ensured by examining the standardized factor loadings and average variance extracted (AVE). The factor loadings ranged from 0.51 to 0.81 (p<0.05), satisfying the criteria prescribed by Bagozzi and Yi (1991). Secondly, the AVE of all three constructs were above 0.5 (Hair et al., 1998), which shows that more than 50% of the variance of the measurement items can be accounted for by the latent variables. To assess discriminant validity, Fornell and Larcker (1981) recommended considering the AVE, which, if higher than the squared correlation or maximum shared variance, provides evidence of discriminant validity. For variance-based models, Hair, Black, Babin, Anderson, and Tatham (2010) advised the use of the square-root value of the AVE to compare the inter-construct correlations. The bivariate correlations between all constructs ranged from 0.01 to 0.51, far below the corresponding AVE and square-root of AVE. Table 1 ensures the discriminant validity based on all these criteria. In sum, both the convergent and discriminant validities confirmed the overall construct validity. Having such qualities, the researcher could safely move toward testing the proposed hypotheses.
  10. 10. ISSN 0034-7590 ARTICLES | THE MISSING LINK BETWEEN HIGH PERFORMANCE WORK PRACTICES AND PERCEIVED ORGANIZATIONAL POLITICS Adnan Riaz | Saima Batool | Mohd Shamsuri Md Saad 87 © RAE | São Paulo | 59(2) | March-April 2019 | 82-94 Table 1. Results of confirmatory factor analysis Constructs and items Standardized factor loadings AVE MSV α CR Perceived organizational politics (POP)   0.73 0.29 0.97 0.97 Favoritism rather than merit determines who gets ahead around here. 0.88 There is no place for yes-men around here: good ideas are desired even when it means disagreeing with superiors. (R) 0.87 Employees are encouraged to speak out frankly even when they are critical of well- established ideas. (R) 0.81 There has always been an influential group in this department that no one ever crosses. 0.83 People here usually don’t speak up for fear of retaliation by others. 0.81 Rewards come only to those who work hard in this organization. (R) 0.83 Promotions in this department generally go to top performers. (R) 0.86 People in this organization attempt to build themselves up by crossing others. 0.83 I have seen changes made in policies here that only serve the purposes of a few individuals, not the work unit or the organization. 0.86 There is a group of people in my department who always get things their way because no one wants to challenge them. 0.86 I can’t remember when a person received a pay increase or a promotion that was inconsistent with the published policies. (R) 0.90 Since I have worked in this department, I have never seen the pay and promotion policies applied politically. (R) 0.90 Machiavellian personality (Mach) 0.80 0.29 0.95 0.95 Never tell anyone the real reason you did something unless it is useful to do so. 0.89 It is wise to flatter important people. 0.88 It is hard to get ahead without cutting corners here and there. 0.91 The best way to handle people is to tell them what they want to hear. 0.89 Anyone who completely trusts anyone else is asking for trouble. 0.90 High performance work practices (HPWPs) 0.62 0.10 0.97 0.97 Great effort is taken to select the right person. 0.84 Long-term employee potential is emphasized. 0.80 Considerable importance is placed on the staffing process. 0.80 Very extensive efforts are made in selection. 0.77 Extensive training programs are provided for individuals in customer contact or front-line jobs. 0.72 Employees in customer contact jobs will normally go through training programs every few years. 0.77 There are formal training programs to teach new hires the skills they need to perform their job. 0.78 Formal training programs are offered to employees in order to increase their promo ability in this organization. 0.79 Employees have few opportunities for upward mobility. (R) 0.78 Employees do not have any future in this organization. (R) 0.81 Promotion in this organization is based on seniority. (R) 0.82 (continue)
  11. 11. ISSN 0034-7590 ARTICLES | THE MISSING LINK BETWEEN HIGH PERFORMANCE WORK PRACTICES AND PERCEIVED ORGANIZATIONAL POLITICS Adnan Riaz | Saima Batool | Mohd Shamsuri Md Saad 88 © RAE | São Paulo | 59(2) | March-April 2019 | 82-94 Constructs and items Standardized factor loadings AVE MSV α CR Employees have clear career paths in this organization. 0.77 Employees in customer contact jobs who desire promotion have more than one potential position they could be promoted to. 0.78 Employees in this job can be expected to stay with this organization for as long as they wish 0.78 Job security is almost guaranteed to employees in this job. 0.76 The duties in this job are clearly defined. 0.79 This job has an up-to-date description. 0.87 The job description for a position accurately describes all of the duties performed by individual employees. 0.80 Performance is more often measured with objective quantifiable results. 0.75 Performance appraisals are based on objective quantifiable results. 0.80 Employee appraisals emphasize long term and group-based achievement. 0.76 Individuals in this job receive bonuses based on the profit of the organization. 0.86 There is close tie or matching of pay to individual/group performance. 0.79 Employees in this job are often asked by their supervisor to participate in decisions. 0.72 Individuals in this job are allowed to make decisions. 0.75 Employees are provided the opportunity to suggest improvements in the way things are done. 0.76 Supervisors keep open communications with employees in this job. 0.85         Note: R = reverse-coded item. The standardized factor loadings were significant at the 0.05 level. AVE = average variance extracted; MSV = maximum shared variance; α = Chronbach’s alpha; CR = composite reliability. Hypothesis Testing Table 2 shows the results of the descriptive statistics, bivariate correlations, and composite reliabilities. The HPWPs’ correlation with POP (r=-0.274, p<0.01) is significant and in the assumed direction. Similarly, Machs significantly correlate with POP (r=0.514, p<0.01). All the measures were found to be reliable as given in the diagonal. Table 2. Means, standard deviations, correlations, and reliabilities     Mean Std. deviation 1 2 3 4 5 1 Income 3.61 1.26 1 2 Service duration 3.04 0.89 -0.393** 1 3 POP 3.62 0.66 -0.006 -0.101 (0.85) 4 Mach 3.73 0.85 -0.018 -0.017 0.514** (0.80) 5 HPWPs 3.55 0.064 0.019 -0.114 -0.274** -0.312** (0.79) Note: N=243. The diagonal elements (boldface) are the square root of the average variance extracted. POP = perceived organizational politics; HPWPs = high performance work practices; Mach = Machiavellian personality. **p<0.05; *p<0.01;***p<0.001. Results of the multiple linear regression given in Table 3 revealed HPWPs as significant predictors of POP (β = -0.144, p< 0.05), which confirmed Hypothesis 1. Similarly, Mach was also found to be a significant predictor of POP (β = 0.364, p<0.001), thus confirming Hypothesis 2. Table 1. Results of confirmatory factor analysis (conclusion)
  12. 12. ISSN 0034-7590 ARTICLES | THE MISSING LINK BETWEEN HIGH PERFORMANCE WORK PRACTICES AND PERCEIVED ORGANIZATIONAL POLITICS Adnan Riaz | Saima Batool | Mohd Shamsuri Md Saad 89 © RAE | São Paulo | 59(2) | March-April 2019 | 82-94 Likewise, Hypothesis 3 stated that Mach would moderate the relationship between HPWPs and POP such that the relationship would be weaker for high-Mach personalities compared with low- Machs.To validate Hypothesis 3, the moderated multiple regression analyses technique was used (Cohen, Cohen, West, & Aiken, 2013). In the first step, the control variables were entered (income and service duration), followed by the independent and moderator variables in the second step. In the third step, we entered the interacting term calculated by multiplying the independent and moderator variables (HPWPs x Mach), which, if significant, confirmed moderation. By following all these steps, the effect of the interacting term (HPWPsx Mach) on POP was significant (β=0.352, p=<0.001), thus confirming Hypothesis 3. Table 3. Results of the main effects and moderated regression analysis   Perception of politics β ΔR² Step 1     Income -0.052 Service duration -0.001 0.010 Step 2 Income -0.056 Service duration -0.002 Mach 0.364*** HPWPs -0.144* 0.28*** Step 3 Income -0.068 Service duration 0.017 Mach 0.274*** HPWPs -0.372*** HPWPs x Mach 0.352*** 0.099*** Note: n=243. HPWPs = high performance work practices; Mach = Machiavellian personality. * p<0.05; **p<0.01; ***p<0.001. We plotted the significant interactions for the high and low (M+SD) values of the moderator. Plots of the significant interactions are displayed in Graph 1, which shows that the negative relationship of HPWPs-POP was stronger when the Mach was high. Simple slope tests using the procedure recommended by Aiken and West (1991) showed that the slope for low levels of Mach was significant (β=-0.66, p<.001) compared with individuals with high-Mach personality (β=0.08; ns). Graph 1. Interactive effects of HPWPs and Mach on POP Note: HPWPs = high performance work practices; POP = perceived organizational politics. DISCUSSION Employees belonging to technical domains have different aspirations, needs, and job requirements (Hernaus & Mikulić, 2014). Engineers and technical staff are treated as the key functional group in any organization. Considering the unique nature of engineers’ job profile, role expectations, and likely challenges, the engineering sector becomes an interesting segment to study organizational politics. This study primarily investigated the impact of HPWPs on POP. This was recommended by Atinc et al. (2010) in his famous meta-analytical review as a fruitful area for research. In addition, the moderating role of Mach personalities was also examined on the HPWPs-POP relationship. The results revealed a significantly inverse relationship between HPWPs and POP. Moreover, the moderating role of Machiavellianism was confirmed on the HPWPs to POP relationship. It is important to note that the above relationship had not been studied so far, even though Ferris et al. (1998) generally explored an association between a few HR practices and POP. As the results indicate, HPWPs significantly reduce POP in organizations. This is consistent with the finding that HPWPs can offer a win-win situation for organizations and employees (Machin & Wood, 2005). Organizations emphasizing HPWPs usually have a more contented and satisfied workforce (Appelbaum, 2000; Guest, 1999; Hall, Hochwarter, Ferris, & Bowen, 2004). This in turn leads to strong attitudinal development and behavioral affiliation, thus controlling the POP among employees (Drory&Vigoda-Gadot, 2010). Our measurement to gauge HPWPs synthesized items including recruitment and selection, career management, job security, role clarity, performance management, participation in decision making, and open communication. A reasonable match was obtained between the demographical information of respondents and the results. For example, most of the employees
  13. 13. ISSN 0034-7590 ARTICLES | THE MISSING LINK BETWEEN HIGH PERFORMANCE WORK PRACTICES AND PERCEIVED ORGANIZATIONAL POLITICS Adnan Riaz | Saima Batool | Mohd Shamsuri Md Saad 90 © RAE | São Paulo | 59(2) | March-April 2019 | 82-94 had worked for around 10 years in their organizations, and the majority were mid-career workers. At this level, employees usually have ample clarity about work roles and responsibilities, enjoy job security, and get opportunities to participate in important decisions. In open and secure environments, any feeling about political maneuvering is diffused. Our analysis provides evidence of the effectiveness of performance management systems in engineering organizations. Political behavior, perception, and tendencies are naturally reduced when employees are goal oriented and strive to achieve excellence. Our results further show that respondents had acquired 16 years of education, which is necessary to carry out the highly specialized engineering tasks. Reasonable education and training opportunities help employees to develop skills and competencies. It has been proved that if organizations are responsive to employees’ needs, they become a cornerstone in coping with cynical attitudes about the organizational environment (Chiaburu, Peng, Oh, Banks, & Lomeli, 2013). We believe that our judgment would bolster this line of thought and affirm that HPWPs can be helpful in alleviating POP and political activities in the organization. The inverse relationship between HPWPs and POP is also in line with the conclusion drawn by Van De Voorde & Beijer (2015), which suggests that HPWPs help to control aversive conditions. The results of this study further confirm that a Mach personality moderates the inverse relationship between HPWPs and POP among employees. The ideology of Machiavelli presented around 500 years ago still poses a challenge to managers and practitioners in organizational life. High-Machs have the genetic tendency to perceive their environment as thoroughly politicized, where everyone is pursuing their self-interest (Mohtadi, 2013; Sibia, 2016). Since a man is the product of his environment (Young, 2012), becoming involved in political behavior is quite natural. High-Machs exert pressure using various means and look at ways to extend their political affiliations (Furnham, Richards, & Paulhus, 2013). Political settings are characteristically uncertain, signifying that power and influence will be the key to their rise (Hall et al., 2004). Thus, people with high-Mach personalities translate activities and occasions into political terms (Buchanan & Badham, 2008) and tend to capitalize political situations for maximizing their personal interests (Czibor & Bereczkei, 2012). Analysts also highlight that Machiavellianism entails gathering the negative perspectives about human instinct, becoming involved in unethical practices, and utilizing different manipulative strategies to fulfill one’s objectives (Johns, Xie, & Fang, 1992). However, regardless of these instinctive hypothetical associations between Mach and POP, very little conclusive investigation has overtly scrutinized the moderating influence. Our results invite attention from managers, as the majority of respondents were male. The Machiavellian trait is highly gender specific, and male workers usually exhibit such attitudinal and behavioral manifestations (Ali, Amorim, & Chamorro-Premuzic, 2009; Fehr & Samsom, 2013). Considering our findings, HPWPs may lose their impact on individual outcomes in cases of high-Machiavellian personalities. In addition, a vast majority of research on HR practices and perceived politics originates from the U.S. and European countries, which are different in terms of cultural dimensions(Hofstede, 2003). Our investigation is an answer to the call of Giorgi, Lockwood, and Glynn (2015) to understand the context of the models and established relationships. Overall, our findings are in line with the existing empirical evidence reported on the western culture, which is marked high in individualism and low in power distances. Thus, we may conclude that the organizationally desirable outcomes resulting from HPWPs and POP are less susceptible to cultural differences and are well generalized in Pakistan, a country marked high in power distance and collectivism. The results of this study could be a significant building block for understanding and controlling politics in various cross-cultural settings, especially within the Pakistani and South Asian organizational context. For further generalization, future research needs to be conducted in different cultures and industries. THEORETICAL IMPLICATIONS Our study has extended the research of the organizational politics domain in various ways. First, we conceptualized the effects of HPWPs on POP, which were not deliberated much in the extant research. Second, this study confirmed the moderating role of Mach personalities on the HPWPs-POP relationship. The study examined all the relationships by collecting data from the engineering sector of Pakistan. Recent focus of the researchers in organizational behavior domain is shifted over to examining organizational politics with respect to a specific population. Hence, engineers working in local industries constituted a unique area of investigation. PRACTICAL IMPLICATIONS Our results provide a sound base to control politics in the professional work environment. Managers should be cautious about the harmful effects of workplace politics. They should consider all potential means, such as clear governing rules, regulations and policies, open communication supported by feedback and guidance, developmental opportunities, and
  14. 14. ISSN 0034-7590 ARTICLES | THE MISSING LINK BETWEEN HIGH PERFORMANCE WORK PRACTICES AND PERCEIVED ORGANIZATIONAL POLITICS Adnan Riaz | Saima Batool | Mohd Shamsuri Md Saad 91 © RAE | São Paulo | 59(2) | March-April 2019 | 82-94 an attractive career path to address political maneuvering. Organizations should revisit their hiring processes by focusing on personality tests to induct employees. New inductees should have positive and authentic personality traits. For existing employees, training interventions may help to reshape personality traits by developing positivity and harmony. STRENGTHS, LIMITATIONS, AND FUTURE DIRECTIONS Similar to other studies conducted in social sciences, this study also has a few limitations. Considering the unique nature of the engineering sector, the implications of this study should be treated with caution. Other workgroups may have different perceptions about the variables of interest and can come up with different strengths and directionality of the relationships. Second, we explored the relationship between HPWPs and POP in the presence of the Mach personality only, while future research may go further by integrating other DarkTriad personalities (narcissism and psychopathy) as moderating variables. Similarly, they may concentrate on a different set of HPWPs to determine their impacts on POP. Moreover, this study was conducted in Pakistan. As Pakistan exhibits different socio-economic conditions, future research may be conducted in neighboring countries and in other parts of Asia as well to compare results. REFERENCES Abbas, M., Raja, U., Darr, W., & Bouckenooghe, D. (2014). Combined effects of perceived politics and psychological capital on job satisfaction, turnover intentions, and performance. Journal of Management, 40(7), 1813-1830. doi:10.1177/0149206312455243 Adams, G. 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  18. 18. RAE-Revista de Administração de Empresas (Journal of Business Management) ISSN 0034-759095 © RAE | São Paulo | 59(2) | March-April 2019 | 95-107 ARTICLES Submitted 03.07.2017. Approved 08.31.2018 Evaluated through a double-blind review process. Scientific Editor: Adriana Takahashi Translated version DOI: http://dx.doi.org/10.1590/S0034-759020190203 RELATIONSHIP BETWEEN INNOVATION AND PERFORMANCE: IMPACT OF COMPETITIVE INTENSITY AND ORGANIZATIONAL SLACK Relação entre inovação e desempenho: Impacto da intensidade competitiva e do slack organizacional Relación entre la innovación y el desempeño: Impacto de la intensidad competitiva y el slack organizacional ABSTRACT Innovation is a key factor in organizational performance. Although there are references from strategic theory to understand the relationships between these two variables, there are still many gaps that need to be filled. Thus, more empirical validation is necessary. This study aimed to verify how the relationship between innovation and performance is affected by the presence of precursor variables such as compe- titive intensity and organizational slack. This study involved conducting explanatory and cross-sectional investigations by applying structural equation modeling to a sample of small and medium-sized enter- prises in Bogotá, Colombia. The results make a relevant contribution to the literature on strategic management by showing that competitive intensity and organizational slack induce innovation and positively impact performance. KEYWORDS | Innovation, performance, competitive intensity, slack, Cladea 2017. RESUMO A inovação é um fator-chave no desempenho organizacional. Embora a teoria estratégica tenha forne­ cido as referências para entender as relações entre essas duas variáveis, ainda há muitas lacunas a serem preenchidas e falta uma validação mais empírica. O objetivo do presente estudo foi verificar como a relação entre inovação e desempenho é afetada na presença de variáveis precursoras como intensi­ dade competitiva e slack organizacional. O estudo foi realizado através de uma investigação de tipo explicativo e corte transversal, aplicando um modelo de equações estruturais a uma amostra de PMEs bogotanas. Os resultados trazem uma contribuição relevante para a literatura e gestão estratégicas, ao mostrarem que a intensidade competitiva e o slack induzem a inovação, gerando um impacto positivo no desempenho. PALAVRAS-CHAVE | Inovação, desempenho, intensidade competitiva, slack organizacional, Cladea 2017. RESUMEN La innovación es un factor clave en el desempeño organizacional. Si bien la teoría estratégica ha pro­ porcionado los referentes para comprender las relaciones entre estas dos variables, aún faltan muchos vacíos por llenar y más validación empírica. El objetivo de este estudio fue verificar cómo se afecta la relación entre la innovación y el desempeño ante la presencia de variables precursoras como la inten­ sidad competitiva y el slack organizacional. El estudio se llevó a cabo mediante una investigación de tipo explicativo y de corte transversal, aplicando un modelo de ecuaciones estructurales a una muestra de pymes bogotanas. Los resultados representan una contribución relevante para la literatura y gestión estratégicas al mostrar que la intensidad competitiva y el slack, inducen la innovación, produciendo un impacto positivo en el desempeño. PALABRAS CLAVE | Innovación, desempeño, intensidad competitiva, slack organizacional, Cladea 2017. DIEGO ARMANDO MARÍN- IDÁRRAGA1 diego.marin@utadeo.edu.co ORCID: 0000-0002-5021-6331 JUAN CARLOS CUARTAS-MARÍN1 juanc.cuartasm@utadeo.edu.co ORCID: 0000-0003-1432-8528 1 Universidad de Bogotá Jorge Tadeo Lozano, Bogotá, Colombia
  19. 19. ISSN 0034-7590 ARTICLES | RELATIONSHIP BETWEEN INNOVATION AND PERFORMANCE: IMPACT OF COMPETITIVE INTENSITY AND ORGANIZATIONAL SLACK Diego Armando Marín-Idárraga | Juan Carlos Cuartas-Marín 96 © RAE | São Paulo | 59(2) | March-April 2019 | 95-107 INTRODUCTION Innovation has been recognized as a value-generating activity for a company (Marín-Idárraga, Hurtado González, & Cabello Medina, 2016; Rosenbusch, Brinckmann, & Bausch, 2011) and a strategy that is a source of competitive advantage (Keupp, Palmié, & Gassmann, 2012). Although some authors have theoretically pointed out that innovation is a determinant of organizational performance (Damanpour, Walker, & Avellaneda, 2009; Marín-Idárraga & Cuartas-Marín, 2016b; Stock & Zacharias, 2011; Walker, Damanpour, & Devece, 2011), several empirical studies show contradictory results, especially in small and medium-sized enterprises (SMEs) (Rosenbusch et al., 2011). For instance, in such companies, some research studies show a positive and significant relationship between innovation and performance (Alegre & Chiva, 2013; Marín-Idárraga & Cuartas- Marín, 2016a), while others show a negative impact (Freel & Robson, 2004; Heunks, 1998). These results suggest that other variables may be affecting the relationship between innovation and performance. Hence, there is a need to study them from the perspective of SMEs. In this regard, although several studies have analyzed precursor variables that affect the relationship between innovation and performance (e.g., Alegre & Chiva, 2013; Chang, Hughes, & Hotho, 2011; Vermeulen, De Jong, & O'shaughnessy, 2005), there is still an opportunity to examine the different factors that have possible impacts on this relationship. To do this, this study evaluates whether competitive intensity and organizational slack influence innovation, leading to an improvement in organizational performance. This study is thus based on the following research question: Is the relationship between innovation and performance affected by the precursor variables of competitive intensity and organizational slack? These two variables were chosen given their relevance and effects on performance. As far as is known, this matter has not yet been studied, especially in Colombia and for SMEs. Competitive intensity is understood as the environment of rivalry a company faces. It is considered one of the main threats to an organization and an important market factor affecting performance (Jaworski & Kohli, 1993; Kim & Atuahene-Gima, 2010). Organizational slack refers to uncommitted resources that are available for investment. It is a good resource for a company to achieve greater performance (Cyert & March, 1992; Singh, 1986). The theoretical scheme was verified empirically using a sample of SMEs from the city of Bogotá. This is particularly relevant because, according to generic data from the Colombian Ministry of Industry and Commerce, these companies represent 97% of the enterprises in Colombia. An explanatory research was conducted using a structural equation model (SEM). The results show that, when facing greater competitive intensity, SMEs release their slack to use it for innovative activities, which improves performance. The importance and contribution of this study lies in the following: i) It is innovative in nature, since it analyzes competitive intensity and slack as precursor variables of innovation leading to improved performance—which has not been studied previously. ii) It is a reference for SMEs on how innovation can lead to improved performance. iii) It is relevant in that confirmation of the hypotheses will advance the knowledge on strategic theory. The remainder of this paper is divided into seven sections. The first one reviews the literature and proposes the hypotheses. The second section explains the methodology. The third section describes the results. The fourth section presents a discussion. Then, the fifth section presents the conclusions and implications. Finally, the last section explains limitations of the study, and future lines of research. LITERATURE REVIEW AND HYPOTHESIS DEVELOPMENT Companies have to make decisions about organizational design in an increasingly complex and unpredictable environment. They seek to align the organizational culture, organizational structure, and business strategy to face these environmental forces and thus ensure their survival, durability, and greater performance (Ánzola, Marín-Idárraga, & Cuartas, 2017; Burton & Obel, 2004; Marín-Idárraga & Cuartas-Marín, 2013). In light of this environmental influence, companies must develop endogenous competencies that enable them to better cope with rivalry in the market, where innovation is a key resource to generate competitive advantages (Keupp et al., 2012). Studies recognize innovation as a source of dynamic capabilities that can contribute to greater performance that is sustainable over time (Wang, 2014). Thus, the importance of innovation as a key factor in facing rivalry is emphasized. Accordingly, its management is a determining aspect in organizational growth, especially for SMEs (Lecerf, 2012). An appropriate way to manage innovation is to use slack to try out new operations and to leverage research and development projects (Nohria & Gulati, 1996). Within this general framework, this section presents the main theoretical references that were reviewed for defining the study’s variables and that served to substantiate the research hypotheses.
  20. 20. ISSN 0034-7590 ARTICLES | RELATIONSHIP BETWEEN INNOVATION AND PERFORMANCE: IMPACT OF COMPETITIVE INTENSITY AND ORGANIZATIONAL SLACK Diego Armando Marín-Idárraga | Juan Carlos Cuartas-Marín 97 © RAE | São Paulo | 59(2) | March-April 2019 | 95-107 Innovation Innovation is an organizational activity considered the focal point of strategy, a crucial element of durability, and a source of competitive advantage (Damanpour & Gopalakrishnan, 1999). According to Van de Ven (1986), innovation is defined as the development and implementation of new ideas by individuals who, over time, participate in transactions with others within an institutional order. In this regard, different studies agree to recognize innovation as a novel construct, of not only ideas but also behaviors (Damanpour & Wischnevsky, 2006; Gopalakrishnan, Kessler, & Scillitoe, 2010). Therefore, innovation often refers to certain behaviors related to creation and development, driven by various changes that lead to exploring new opportunities or exploiting current strengths (Damanpour, 1996; Drucker, 1985; Wolfe, 1994). Innovation has been subject to various taxonomies. For example, there are technological and administrative innovations. The first typology corresponds to process or product innovation, while the second involves the organizational structure and management practices. Technological innovation is, to a great extent, associated with the organization’s main activity, making it more tangible. Administrative innovation is less observable as it is limited to managerial processes (Damanpour & Gopalakrishnan, 1999). Organizational Performance Performance has become one of the most representative variables in research agendas regarding strategic management (Venkatraman & Ramanujam, 1986). Performance can have various semantic connotations. Nevertheless, it is generally defined as the scope of organizational effectiveness, which, in turn, is defined as the concomitance between efficacy and efficiency. Efficacy is the achievement of objectives, and efficiency is the optimal use of resources (Auh & Menguc, 2005; Burton & Obel, 2004; Neely, Gregory, & Platts, 1995). Measuring organizational performance is still a matter of debate among academics. This is because of its multidimensional condition that makes this variable a complex—and sometimes unobservable—construct (Cameron & Whetten, 1983). From the economic point of view, performance is measured in accounting and financial terms. In organizational theory and strategic management, its measurement has transcended into financial and non-financial areas (Neely et al., 1995; Venkatraman & Ramanujam, 1986). In fact, at present, performance is considered an integral construct in management measurement systems through balance scorecards (Kaplan & Norton, 2005). Competitive Intensity Barnett (1997) defines competitive intensity as the context wherein companies find themselves in zero-sum relations with one another, directly or indirectly, in their dispute over the same group of resources. Thus, when these companies compete in the same niche, competition will be stronger, especially when products and services are homogeneous (Yang & Li, 2011). This can potentially lead to loss of opportunities for the companies’ future growth (Auh & Menguc, 2005). Generally, competitive intensity refers to the degree of competition a company faces in the market where it operates. This means that customers have more alternatives to satisfy their needs (Jaworski & Kohli, 1993). When competition intensifies, companies experience strong pressures toward cost efficiency and price reduction, resulting in narrower profit margins and a more restricted organizational slack(Miller & Friesen, 1983; Zahra, 1996). Under such conditions, incremental innovation, through continuous improvements to products, services, and processes, is required to face competition. However, it is necessary to promote radical innovation as a strategy to develop new sources of competitive advantage (Jansen, Van Den Bosch, & Volberda, 2006; Lavie, Stettner, & Tushman, 2010). Organizational Slack Bourgeois (1981) and Nohria and Gulati (1996) argue that organizational slack refers to a company’s resources that are in excess of the minimum required for a given level of output. These can be made quickly available to respond to internal and environmental pressures, based on changes in strategy. Studies show that organizations with the capacity to survive and adapt to changes in the environment generate positive effects on organizational slack (Cyert & March, 1992). Therefore, in light of environmental forces affecting organizations, slack can be used to improve organizational performance (Vanacker, Collewaert, & Zahra, 2017). Previous literature focuses on financial slack and its impact on organizational performance and innovation (Nohria & Gulati, 1996). In addition, it deals with analysis of mainly two types of slack: (i) Unabsorbed or financial slack—measured as the current ratio—corresponds to the availability of current resources to meet
  21. 21. ISSN 0034-7590 ARTICLES | RELATIONSHIP BETWEEN INNOVATION AND PERFORMANCE: IMPACT OF COMPETITIVE INTENSITY AND ORGANIZATIONAL SLACK Diego Armando Marín-Idárraga | Juan Carlos Cuartas-Marín 98 © RAE | São Paulo | 59(2) | March-April 2019 | 95-107 short-term commitments; and (ii) Absorbed slack—measured as the ratio between operating expenses and sales—corresponds to disbursements for operating activities that are recoverable in the short term due to their income-generating potential (Geiger & Makri, 2006; Lavie et al., 2010). For companies in emerging economies subject to unstable and dynamic environments, unabsorbed slack becomes a fundamental aspect to sustain competitive advantages (Su, Xie, & Li, 2009). Prior research found that companies with reduced slack do not develop innovations that enable them to endure over time. Companies that maintain excesses over a certain volume of slack are considered inefficient and inert (Mousa & Chowdhury, 2014). Therefore, organizations must monitor their level of slack to promote their best use, for example, through innovative activities that impact performance positively. Competitive Intensity and Innovation When companies face a highly competitive environment, the impact of innovation on performance is contradictory to the above. For instance, under strong competition, companies are found trying to leverage current resources to take advantage of the lessons learned and accumulated knowledge. This helps them avoid risk, uncertainty, and the eventuality of additional costs, which involves new searches and developments, a circumstance that affects performance positively (Jansen et al., 2006; Kim & Atuahene-Gima, 2010). In high-competitive-intensity scenarios, companies are also found to resort to innovation to avoid technological obsolescence and proactively anticipate changes in the market. This allows them to enrich current processes and expand their range of products to improve their market position and obtain higher returns on investments (Abebe & Angriawan, 2014; Auh & Menguc, 2005; Chang et al., 2011). Accordingly, this study presumes that SMEs in Bogotá respond to their competitors’ pressures by carrying out innovative activities to achieve a better market position. Thus, the following hypothesis is proposed: H1: Competitive intensity has a positive impact on innovation. Organizational Slack and Innovation Some scholars have already proven that organizational slack is a good resource for companies as it allows them to achieve greater performance (Cyert & March, 1992; Singh, 1986). In the field of innovation, some studies show that slack leads companies to develop more search and experimentation activities, leading to a greater propensity to innovate and thus enhancing performance (e.g., Katila & Shane, 2005; Lavie et al., 2010; Sidhu, Volberda, & Commandeur, 2004). It has also been demonstrated that planned use of financial resources promotes product innovation and positively impacts performance (Dunk, 2011). Thus, this study presumes that organizational slack is an explanatory factor of innovation for SMEs in Bogotá. This is because availability of resources makes it easier to promote innovative activities. Therefore, the following hypothesis is set forth: H2: Organizational slack has a positive impact on innovation. Innovation and Performance In innovation management, companies make different decisions regarding investment of resources. On one hand, they use a defensive strategy to consolidate their presence in a given market segment. They do this through endogenous actions related to improving organizational routines, leveraging existing capabilities, refining resources, and managing knowledge. This allows them to have adaptive processes through gradual changes. On the other hand, companies develop exploratory strategies to broaden their client base and find new markets. They do this through exogenous actions related to exchange of resources and capabilities, inter-organizational relations, research and development with suppliers and competitors, and technology transfer and adoption. This allows them to have adaptive processes through discontinuous changes (Bierly & Daly, 2007; Zhan & Chen, 2013). These two organizational behaviors provide relevant results in terms of incremental and radical innovations that favorably impact organizational performance (Atuahene-Gima, 2005; Yalcinkaya, Calantone, & Griffith, 2007). As demonstrated by Chang et al. (2011), the relationship between innovation and performance is affected by different internal and external antecedents. This study presumes that the outcomes of SMEs in Bogotá are influenced, to a large extent, by investment of slackin innovation to face the impact of competition. Consequently, the following hypothesis is proposed: H3: The relationship between innovation and performance is strengthened by the influences of competitive intensity and organizational slack. Figure 1 summarizes the referential scheme guiding this study’s hypothesis formulation.
  22. 22. ISSN 0034-7590 ARTICLES | RELATIONSHIP BETWEEN INNOVATION AND PERFORMANCE: IMPACT OF COMPETITIVE INTENSITY AND ORGANIZATIONAL SLACK Diego Armando Marín-Idárraga | Juan Carlos Cuartas-Marín 99 © RAE | São Paulo | 59(2) | March-April 2019 | 95-107 Figure 1. Conceptual model and study hypothesis Competitive intensity H1 H3 H2 Organizational Slack Innovation Performance METHODOLOGY The methodology applied in this study is described below. Type of Study, Sampling, and Data This is an explanatory, cross-sectional study, conducted using an SEM to verify the hypotheses (Bentler & Weeks, 1980). The SEM was selected because it leans towards the analysis of the relationships between several independent variables and one dependentvariable that, in turn, becomes independent for another dependentvariable (such as the research model presented in Figure 1). To this end, the path analysis technique is used to evaluate the defined or manifest—observable—variables (Hair, Black, Babin, & Anderson, 2009) using the EQS 6.1 software (Bentler, 2006). Thus, a two-phase procedure was conducted.The first phase included the creation of an initial (singular) model that evaluates the relationship between innovation and performance. The second phase involved creating a sequence model whose first path evaluated H1 on the relationship between competitive intensity and innovation. The second path evaluated H2 on the relationship between slack and innovation (first-order model). The third path evaluated H3 on the effect of innovation on performance (second-order model). This study took the firm as the unit of analysis. Exhibit 1 lists the characteristics of the target population. Exhibit 1. Technical data of the study Scope: Bogotá D.C. Length: 12 months Elements: Small and medium-sized enterprises of Bogotá Sampling units: CIIU Rev. 3.1 A.C. - 2 digits Sampling frame: BPR Benchmark Database™ Respondents: Strategic-apex executives and middle-line managers The Benchmark Database was used as the sampling frame. Following Babbie's (2010) and Malhotra's (1999) indications, the companies were selected considering the following criteria: (i) location in Bogotá; (ii) operations within the industrial, trade, or service sectors; (iii) classification withinSMEs—in terms of amount of employees; (iv) existence and validity; and (v) availability of contact information and e-mails to send the questionnaire. The result was 157,864 possible units to be evaluated. The probability simple random sampling method was applied to the units using the formula for finite populations, with an estimation error of 4.5%. After the calculations, the sample comprised 579 companies for a confidence level of 97%. The information wascollected using a self-administered and structured questionnaire addressed to the companies’ strategic apex executives and middle-line managers. They were selected because, according to Mintzberg (1979), they are in charge of the organizational strategic direction and implementation and take part in the decision-making processes. The questionnaires were sent via e-mail. Then, to follow up, participants were contacted via telephone to ensure the highest number of responses possible. This was based on the mixed and tailored-design method suggested by Dillman, Smyth, and Melani (2011). Upon finishing field work, 419 completed questionnaires were collected. Of these, 18 were discarded because they had too many missing values according to the recommendations of the literature (Malhotra, 1999). The final sample was 401 valid cases representing a response rate of 69% (401/579). This rate is acceptable for such type of studies (Baruch, 1999) and is much higher than that in previous studies with similar methodology (e.g., Lee & Yang, 2011). Of the respondents, 53% (213) were strategic apex executives and 47% (188) were middle-line managers. To ensure there were no differences among the answers obtained in the three sectors evaluated, the Kruskal–Wallis test was implemented. For all cases, p > 0.05, which meant there were no differences among the answers provided by executives in the industrial, trade, and service sectors. Similarly, to verify there were no differences among the answers obtained from the two organizational levels, the Mann–Whitney U test was used. Again, for all cases, p > 0.05, which meant there were no differences among the answers provided by the strategic apex executives and middle-line managers. Since part of the initial sample (78 of 579 companies) did not respond to the questionnaire, the non-response bias was verified based on data known to the whole population, such as the size and amount of annual sales (Armstrong & Overton, 1977). The Student’s t-test analyses show no significant differences among the respondents and non- respondents (p > 0.05).