Uncovering the Link between Strategic Human Resource Management and Crisis Management: Mediating Role of Organizational Resilience

Nisar Ahmed Channa, Syed Mir Muhammed Shah and Niaz Hussain Ghumro, "Uncovering the Link between Strategic Human Resource Management and Crisis Management: Mediating Role of Organizational Resilience”, Annals of Contemporary Developments in Management & HR (ACDMHR), Print ISSN: 2632-7686, Online ISSN: 2632-7694, pp. 15-27, Vol. 1, No. 2, 1st August 2019, Published by International Association of Educators and Researchers (IAER), DOI: 10.33166/ACDMHR.2019.02.003, Available: http://acdmhr.theiaer.org/archive/v1/v1n2/p3.html. Research Article


Introduction
The organizational crisis has a low probability of occurrence but they are a major threat to the survival of an organization and its stakeholders (Jackson & Dutton, 1987). It gives very short or often no time to respond and surprise members of the organization (Herman, 1963;Quarantelli, 1988). Academic research viewed crisis management as a combination of factors designed to deal with and minimize damage caused by the crisis . Crisis management deals with effective planning to prevent a crisis, minimize damages and resume operations at the time when the organization became unable to perform core activities to produce output and cater needs of customers (Pearson & Clair, 1998). www.acdmhr.theiaer.org effectively cope crisis (Madrid, Ahmed & Kumar, 2019). Third, our study provides empirical evidence to the claim of normal accident theory that instead of putting efforts to avoid crises, organizations should put efforts on getting prepared to face crisis and change crisis and threats into opportunities.

Crisis Management
Crisis management is defined by  a a combination of factors designed to deal with and minimize damage caused by the crisis. According to (Pearson & Clair, 1998), crisis management deals with effective planning to prevent a crisis, minimize damages and resume operations at the time when the organization became unable to perform core activities to produce output and cater needs of customers.
The literature on emergency preparedness suggests there are four interrelated factors: prevention, preparation, revision, and response. , classified these factors in a three-stage approach commonly used to describe crisis management: pre-crisis phase, the crisis phase, and the post-crisis phase. Pre-crisis phase involved in strategizing to prevent and prepare for a crisis, crisis-phase involved in strategizing to response crisis, and post-crisis phase involved strategizing for learning from the crisis. During the financial crisis of 2008, the performance of multinational organizations was influenced by Pre-crisis asset management (Fainshmidt et al., 2017). The capacity of multinational organizations to deal with the global financial crisis was enhanced by routine altering activities of asset management capabilities .

Normal Accident Theory
Normal accident theory (NAT) is the underpinning theory behind this study. NAT emphasizes that accidents are unavoidable in complex environments (Shrivastava, 2009;Rijpima, 1997). Complexity unavoidably causes interactions between failures, on the other hand, the tight coupling of these interactions increases rapidly and do not prevent system breakdowns (Rijpima, 1997). Perrow (1984), explains that accidents are normally caused by the failure of a lower level of the component which rapidly proceeds to higher levels and defeat engineered safety features. Better designing of engineered safety features, preventive maintenance, and training can avoid accidents and failures (Perrow, 1984).
NAT supports the argument that in today's world organizational crisis become inevitable and one cannot avoid crisis and uncertainty. Rather than putting efforts to avoid crisis, surprises, and threats, one should try to put efforts on getting prepared to face crisis and change crisis and threats into opportunities. Crisis can be avoided and damage caused by the crisis can be minimized by developing strategies and planning to cope with the crisis . Strategic human resource management enables an organization to create core competencies and capabilities among employees that enable the organization to develop situation-specific responses to threats and uncertainties. Organizational resilience is one of the capabilities that help organizations to get prepare for and cope with the crisis, as  stated that organizational resilience is an organization's ability to recover from stressful, turbulent, adverse situations, and picked up from where they left off.

Strategic HRM and Crisis Management
Previous studies conducted to find common grounds between SHRM and crisis management suggest that both are linked in the exorable way Mitroff et al., 1992). However, more research is needed to specify links between SHRM and crisis management (Preble, 1997). It is further proposed by Preble (1997) that a defensive capability to prevent and lessen the effects of crisis occurs by incorporating crisis management perspective into the strategic management process. A more comprehensive approach to manage organizational strategy can be produced by incorporating preventive capabilities of crisis management (Umrani, Ahmed & Memon, 2015;Preble, 1997). There are six points that link strategic management with crisis management: a concern for the www.acdmhr.theiaer.org whole organization, the involvement of top management, a focus on a complex set of stakeholders, environmental relations, representation of emergent processes, and expression of a consistent pattern . However, there is a paucity in the existing literature on the empirical evidence to test this relationship considering that very limited focus on this direct relationship. On basis of above-cited studies and normal accident theory, it is believed that by integrating crisis management perspective with strategic human resource management a defensive capability to prevent crisis and to lessen effects of a crisis if a crisis occurs. Thus, we formally propose the following hypothesis: H1: There is a positive relationship between SHRM and crisis management. -Hall et al. (2011), proposed that an organization can develop the capability of organizational resilience by incorporating SHRM practices. Resilience creates core competencies among employees that enable organizations to develop situation-specific responses to threats, to absorb uncertainty effectively, and engage in activities that transform organizations and convert threats and surprises into opportunities (Pahi, Hamid, Ahmed & Umrani, 2015;Lengnick-Hall et al., 2011). It is further suggested that an HR model consists of HR principles, desired employee contributions, and HR policies enable organizations to develop the capacity for resilience. On the basis of the above-cited studies and normal accident theory, it is believed that SHRM enables a firm to develop the capacity for organizational resilience. Thus we formally propose the following hypothesis:

Lengnick
H2: There is a positive relationship between SHRM and organizational resilience.

Organizational Resilience and Crisis Management
Stakeholders consider organizational resilience as a key to cope with crisis and improve readiness to deal with threats and disasters . Multiple levels comprehensive, and multi-perspective approaches are needed to design response systems like crisis management, disaster management, business continuity, security and safety management . One of those approaches is organizational resilience that is comprehensive and multi-perspective because it not only strengthens organizations to cope with current crisis but also enable organizations with capacities to prevent a future crisis (Lengnick-Hall et al., 2011). A study conducted by Parker and Ameen (2018) on small businesses suggest various resilience capabilities of an organization contribute to ingcoping with electricity failures. It is further suggested by Teo et al. (2017) that survival of a firm during the time of crisis depends upon its capabilities of resilience. On the basis of the above-cited studies and normal accident theory, it is believed that organizational resilience enables a firm to manage crises in an effective manner. Thus, we formally propose the following hypothesis: H3: There is a positive relationship between organizational resilience and Crisis Management.

Mediating Role of Organizational Resilience
It is evident from literature that organizational resilience is associated positively linked with SHRM and crisis management (Prezelji & Doerfel, 2017;Lengnick-Hall et al., 2011;Parker & Ameen, 2018;Toe et al., 2017). Lengnick-Hall et al. (2011) proposed that an HR model comprised of desired employee contributions, HR principles and HR policies enable organizations to develop the capacity for resilience. On the other hand, resilience creates core competencies among employees that enable organizations to develop situation-specific responses to threats, to absorb uncertainty effectively, and engage in activities that transform organizations and convert threats and surprises into opportunities (Lengnick-Hall et al., 2011).
On the basis of the above-cited studies, it is believed that SHRM enables an organization to develop the capability for organizational resilience, and organizational resilience helps an organization to effectively manage crises. Thus we formally propose the following hypothesis: www.acdmhr.theiaer.org H4: Organizational resilience mediates the relationship between SHRM and crisis management.

Research Context:
This research has been conducted in the manufacturing context. The current study chose the textile industry of Pakistan as a research context because of many reasons. First, According to the Pakistan Economic Survey (2017-18), Pakistan is one of the largest producers of textile in the world. In Pakistan, the textile industry provides employment opportunities to around 40 percent of total labor force and regarded as the backbone of the country's economy as this industry contributes almost 62 percent to total exports of Pakistan which are being comprised of approximately 8844 million US dollars (PES, 2017-18). These facts show the importance of this industry in the country's economy. Second, nowadays textile industry of Pakistan is in chaos and facing various crises ranging from increased government taxes, unavailability of skilled labor, poor government policies, high energy tariffs, unavailability of energy resources (in form of load shedding). Because of these crises, a rapid downfall in production is seen which cause a reduction in export orders. Due to the pressure of meeting export orders, firms are forced to use alternative means of energy which further increases the cost of production. The high cost of production badly affects the global competitiveness of this industry which causes a reduction in exports orders.

Sampling
To conduct this study, a sample comprised 176 HR managers of textile firms operating in Sindh province of Pakistan is selected by employing the unrestricted sampling technique of probability sampling design. It is because all of the 176 firms included in the sample had an equal chance of being selected for data collection. In probability sampling design, individuals in the chosen population have equal chances to be selected as a sample (Bryman & Bell, 2015). Unrestricted sampling technique is least biased and offers more generalizability (Hair et al., 2015;Sekaran & Bougies, 2016;Bryman & Bell, 2015).

Measures
All items were adapted from previous studies and worded painstakingly to fit according to the context of the study. These items were measured by using a five-point Likert scale ranging from 1 = strongly disagree to 5 = strongly agree.. A pilot study was also conducted with a sample of 40 HR managers of textile firms to ensure that the items are clearly understood.
To measure strategic human resource management (SHRM), we adopted 12 items from the scale used in previous studies (Chen and Huang, 2009). The scale consists of five dimensions of SHRM: selection, training, participation, appraisal, and compensation. Organizational resilience was measured by adapting 16 items from the scale used in previous studies (Mallak, 1998). The scale consists of six dimensions: role dependence, resource access, source reliance, solution seeking, critical understanding, and avoidance. In order to measure crisis management, we adapted 12 items from the scale used in previous studies (Israeli and Reichel, 2003). The scale consists of four dimensions: maintenance, marketing, HRM, and government.

Data Analysis:
Data were analyzed through structural equation modeling technique by using Smart PLS 3.0 software. Whereas, SPSS is used to screen data, deal with missing values, outliers, multicollinearity and normality. Smart PLS is used for determining reliability and validity as well as finding out the significance of path coefficients and hypotheses testing. www.acdmhr.theiaer.org

Profile of Respondents
A brief profile of respondents is presented in Table 1. In a sample of 176 HR managers, there were 37 females and 138 males, which makes a percentage of 21 and 79 respectively. Their ages ranged from below 30 and above 40 years. Among them, 45 respondents were below 30 years of age, 79 were between the age of 30 to 35 years, and 20 were 35 to 40 years old which makes a percentage of 27, 63 and 11 respectively. Their education level ranged from a bachelor degree to MS/M.Phil. Among them, 121 respondents hold a bachelor degree, 54 master and 1 holding M. Phil degree that makes a percentage of 68.8, 30.7 and .06 respectively. Likewise, 44 respondents had experience of few than 5 years, 79 respondents had a 5 to 10 years of experience and 53 had more than 10 years of experience making a 25%, 45, and 30% respectively.

Structural Equation Modelling
The hypotheses were tested by employing structural equation modeling (SEM) technique (Wold, 1975(Wold, : 1985 by applying partial least square approach (Ringle et al., 2015). PLS approach performs bootstrapping procedures in order to accentuate the level of significance for path coefficients and loadings (Hair et al., 2014) for tested relationships. In academic research, this approach has widely been used (Hair et al., 2014). According to literature, there are two steps for PLS path modeling approach, that are known as measurement model and structural model (Anderson & Gerbing, 1988).

Measurement Model
Before testing hypothesis, convergent validity, reliability, and discriminant validity were assessed (Anderson & Gerbing, 1998). Results shown in Table 2 suggest that threshold of 0.5 for convergent validity, 0.7 for composite reliability (CR) and 0.5 for average variance extracted (AVE) is www.acdmhr.theiaer.org maintained (Yap et al., 2012;Bagozzi & Yi, 1991;Gefen et al., 2000;Fornell & Lacker, 1981). Therefore, there is no issue of reliability and validity in measurement model. Second, by using criteria suggested by Fornell and Lacker (1981), discriminant validity was assessed. Table 3 shows that the correlations of every construct are less than the square root of average variance extracted by indicators, which suggest there is no issue of discriminant validity as well. www.acdmhr.theiaer.org

Structural Model
After achieving a suggested threshold of reliability and validity of the research model, the structured model was tested next. The results of structural model are shown in Table 4. Results for the first hypothesis of this study were found insignificant, therefore we conclude that hypothesis 1 is not supported. Further, it is evident from results that there is a positive relationship between SHRM and organizational resilience (β = 0.092, p < 0.01), and likewise between organizational resilience and crisis management (β = 0.021, p < 0.05). therefore, it is concluded that hypothesis 2 and 3 are fully supported. The mediation of organizational resilience between SHRM and crisis management was tested by applying recommendations of Preacher and Hayes (2004). Indirect effects were examined by performing the bootstrapping method. Results in this regard were found significant (β = 0.031, p < www.acdmhr.theiaer.org 0.05), which support hypothesis 4 of this study that organizational resilience mediates the relationship between SHRM and crisis management. Level of significance: *p < 0.1, **p < .05, ***p < 0.01

Inner Model Evaluation
After assessing the structural model, next the inner model was assessed by following guidelines of Hair et al. (2014). According literature, in PLS-SEM there is no standard goodness of fit statistic, therefore the quality of the model is assessed on basis of its ability to predict endogenous constructs. Hair et al. (2014) suggest the following criteria to assess the ability to predict endogenous constructs:

The Coefficient of Determination (R 2 )
The predictive accuracy of the model is assessed through the coefficient of determination, also known as R 2 . It provides combined effects of an exogenous variable on the indigenous variable. Hair et al. (2013) suggested that the predictive accuracy of PLS path model can be assessed through examining R 2 of each hypothesized relationship. Table 5 shows the values of R 2 and adjusted R 2 values of hypothesized relationships in our proposed model. R 2 values that range from 0 to 1, higher R 2 values indicate better predictive accuracy of the model (Hair et al., 2013).

Cross-Validated Redundancy (Q 2 )
Q 2 or cross-validated redundancy measures predictive relevance of inner model (Hair et al., 2014). Table 6 shows cross-validated redundancy of the proposed model. Hair et al. (2014) suggested that predictive relevance of a model is established when the value of Q 2 in all hypothesized relationship exceeds zero.

Discussion
The current study is one of the initial attempts to develop and test a mediation model to explore whether SHRM influence crisis management in the manufacturing context (eg, textile sector). This www.acdmhr.theiaer.org study contributed to the literature in three ways. First, the current study contributed to the exploration of the relationship between SHRM and organizational resilience. Second, this study contributed to the exploration of the relationship between organizational resilience and crisis management. Third, the current study contributed to the exploration of the mediating role of organizational resilience between SHRM and crisis management.
Consistent with the hypothesis, results supported the significant positive relationship between SHRM and organizational resilience in manufacturing context (eg, textile sector). This finding is consistent with the research of Lengnick-Hall et al. (2011) which suggest a relationship between SHRM and organizational resilience. Results also supported the significant positive relationship between organizational resilience and crisis management as hypothesized. This finding is also in line with previous research (Parker & Ameen, 2018; which emphasized a relationship between organizational resilience and crisis management. Similarly, results for the indirect effect of organizational resilience between SHRM and crisis management revealed that after adding organizational resilience a mediating variable, the effect of SHRM on crisis management was significant. It suggests that organizational resilience fully mediates the relationship between SHRM and crisis management in the manufacturing context (eg, textile sector).

Implications for Theory and Practice
This study contributes to the body of research on organizational studies and crisis management in many ways. First, this study has provided empirical support to normal accident theory and organizational resilience, which mediates the relationship between SHRM and crisis management. Current research suggests that instead of putting efforts to avoid crises, organizations should put efforts on getting prepared to face crisis and change crisis and threats into opportunities by developing organizational resilience capabilities. Second, the current study has explored a significant positive influence of SHRM on crisis management, in this way it advances the understanding of research on SHRM as a new avenue to manage a crisis effectively. Third, the current study contributed to developing the mediation model by adding organizational resilience as a mediator between SHRM and crisis management to facilitates the relationship between the two in order to manage an organizational crisis effectively. The results support organizational resilience as a prominent mediator between SHRM and crisis management. This finding suggests that by managing human resources strategically, an organization can manage the crisis in a more effective way.

Limitations & Future Research
Present study focusses on investigating the relationship between SHRM and crisis management particularly in the manufacturing context (eg, textile sector), thus the results may not be generalizable to other domains. Future research may be done in other domains to explore whether SHRM has an impact on crisis management. Although this study explored the effect of SHRM on crisis management through the mediating role of organizational resilience, it is still unclear which dimension of SHRM is a strong predictor of developing organizational resilience. Future research in this area may identify which dimension of SHRM plays a key role in developing organizational resilience in order to effectively manage the crisis.