Collaborating for Innovation: a study of Pakistan’s Service Industry

Innovation is a key parameter of business performance and the effect of HR practices on innovation has also been the subject of many studies. Nevertheless, effective implementation of HR practices presupposes the establishment of a suitable collaborative climate, but little attention has been paid by researchers to collaboration as a potentially important factor in this relationship between HR practices and innovation. The present study was conducted to fill this research gap by investigating the mediating role of collaboration between HR Practices and innovation. Four hypotheses were developed, out of which three tested the nature of the relationship between the variables of interest – HR Practices, Innovation, and collaboration – whereas the fourth examined the mediating role played by collaboration in the process. A correlational quantitative research design was used in the study. The probability sampling method was employed to select the sample (n = 120) from the service sector. Units of analysis were heads of HR/senior level managers. The final results established a positive relationship among the variables of interest and supported all four hypotheses. However, the results suggested that merely a positive relationship between HR Practices and Innovation may not lead a business firm to effectively innovate unless and until it fosters a collaborative climate across the whole organization. Similarly, the results also proved the mediating effect of collaboration in the relationship between HR Practices and Innovation, but it was also established that the role of mediation was far greater in the case of product innovation than in process innovation.