Time to take corporate innovation initiatives: The consequence of safety accidents in China’s manufacturing industry

Abstract

Purpose: A bad safety accident at a manufacturing company usually results in casualties and economic losses. The company affected by such an accident must deal with pressure from multiple stakeholder groups. Employees, in particular, play a key role in pushing the affected company to develop strategies to improve occupational safety and health. The purpose of this paper is to seek answers to two questions: does a safety accident affect employee behavior in terms of giving up prospects to develop a career at the affected company? If yes, could innovation initiatives adopted by the company help moderate the negative consequences from a safety accident?

Design/methodology/approach: By investigating 120 safety accidents reported by publicly listed Chinese manufacturing companies between 2009 and 2016, the authors conduct an empirical study using regression-based statistical hypotheses testing to describe the companies’ responses and prospects for their employees.

Findings: The results show that the magnitude of the accident and the accident being caused by an employee error positively affect the turnover of employees. Furthermore, technical innovation initiatives, such as spending on R&D, by the accident-affected companies increase the positive effect of the accident magnitude on employee turnover. On the contrary, management innovation initiatives, such as corporate social responsibility activities, weaken the impact of the accident magnitude and employee error on employee turnover.

Originality/value: This study contributes to knowledge development by adding a crisis perspective in human resource management research. It helps to better understand the impact of safety accidents on employee behavior and the response taken by companies through innovation initiatives.