STRATEGIC HRM PRACTICES AND FIRM PERFORMANCE: THE MODERATING ROLE OF ENVIRONMENTAL DYNAMISM IN BANDUNG
Published:
2026-04-25Downloads
Abstract
This study examines the effect of Strategic Human Resource Management (SHRM) practices on firm performance and investigates the moderating role of environmental dynamism in firms operating in Bandung. A quantitative approach was employed using a cross-sectional survey of 214 firms. Data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). Measurement and structural models were assessed following established reliability and validity criteria, and moderation analysis was conducted using an interaction term. The results indicate that SHRM practices have a positive and significant effect on firm performance (β = 0.421, p < 0.001). Environmental dynamism also shows a significant positive effect on firm performance (β = 0.276, p < 0.001). Furthermore, environmental dynamism strengthens the relationship between SHRM practices and firm performance (β = 0.198, p < 0.01). The model explains 57.3% of the variance in firm performance (R² = 0.573), indicating moderate explanatory power. This study is limited by its cross-sectional design, reliance on self-reported data, and focus on a single regional context, which may affect generalizability. This study contributes to the literature by integrating the Resource-Based View with contingency and dynamic capability perspectives, highlighting environmental dynamism as a key boundary condition in the SHRM–performance relationship within an emerging market context.
Keywords:
Environmental Dynamism Firm Performance Partial Least Squares Strategic Human Resource Management Structural Equation ModelingReferences
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