A firm level study into the influence of AMO practices and affective commitment enhancing practices on firm performance

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The central focus of this research is on firm performance, AMO and affective commitment. New innovative initiatives such as Industry 4.0 are eligible to increase firm performance on both hard of soft indicators. Innovative initiatives including Industry 4.0 are affecting organizations greatly in terms of technology, processes and more important the desired human capital. To ensure the development of human capital organizations should focus on the knowledge, skills and abilities of their employees. The AMO-model enables organizations to engage in organizational activities to enhance the ability, motivation and opportunity of employees. This is based on the idea that personal behaviour is an important determinant of firm performance. So firstly this research focuses on the AMO – performance relationship. Additionally, this research takes on the work of Mercurio (2015) in which affective commitment is deemed as the most important form of commitment and thereby influencing individual behaviour and subsequently firm performance. Secondly, this research aims to examine if affective commitment has a positive moderating effect on the AMO – performance relationship. To examine these hypothesized relations a mixed-methods study has been conducted. The quantitative analysis was based on multiple regression analysis to test the hypothesis and enhance the generalizability, the data was derived from the CRANET database. The qualitative part was conducted through five semi-structured interviews and was aimed at creating a more in-depth and holistic understanding of the hypothesized relationships. Firstly, the qualitative analysis revealed that ability and opportunity enhancing practices do have a positive effect on firm performance. Secondly, hypothesis 2 about motivation enhancing practices was partly supported since 1 respondent indicated that these activities also lead to long term employment which may cause inertia. Furthermore, affective commitment enhancing practices such as coaching, mentoring and socializing are positively related to firm performance. The expected moderation effect of affective commitment did not occur in the qualitative analysis. As for the quantitative analysis, ability and motivation enhancing practices are partly supported. The expected effect of opportunity enhancing practices did not occur. In the quantitative analysis, the direct effect of affective commitment enhancing practices on firm performance is partly supported. Contradictory to the qualitative analysis, the quantitative section produced one significant result with regards to the moderating effect of affective commitment on the AMO – performance relationship. Overall, AMO enhancing activities influence firm performance, furthermore, the research did not yield enough substantial results to fully confirm the moderating effect of affective commitment.
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