Previous HRM models of organizational competitiveness have focused on identifying the correct combination of HR practices that fit firm level strategies. Since these models often focus on technical HR practices, which are not considered strategic, researchers have argued for models that take a capability - based approach to management (Ulrich, 1998). The present paper empirically examines and presents a new capability - based model designed to explain the variability in innovation implementation success and division performance.
Fifty - six general managers from a fortune 20 firm participated in this project by completing a questionnaire on organizational capability management (OCM) and implementation success of managerial innovations. Results showed that OCM mediated the relationship between innovation problems (resource management, collaborative structures and process, and organizational climate) and innovation implementation success. However, OCM did not have a direct, positive impact on firm performance. In addition, it was found that innovation implementation success had a significant, positive impact on firm performance.
Several potential limitations of this research were identified and steps taken to improve the internal validity are discussed. Finally future research, in order to better explain the relationship between OCM, implementation success, and firm performance were discussed.