Human Capital Resource Orchestration: Does Human Resource Function Really Matter?

What’s the role of functional managers in resource orchestration, if any? Drawing on the resource orchestration literature, we propose that functional managers who can closely communicate with multiple levels of management can improve firm performance by synchronizing and orchestrating managerial actions for the resources that they are specialized in. We test this argument with a firm’s function that has been often challenged by the management for its strategic value. In a five-wave panel study with a sample of 251 Korean firms over a 10-year period, HR function’s human capital resource orchestration improves firm performance. Furthermore, HR function’s human capital resource orchestration translates investment in HR function into firm performance and mitigates the negative performance effect of collective turnover. However, investment in HR function decreases firm performance when HR function does not engage in human capital resource orchestration. Finally, when HR function’s human capital resource orchestration is high, having more HR practices negatively affects firm performance. Functional managers can contribute to re-source orchestration.