187 Organizacija, Volume 52 Issue 3, August 2019Research Papers 1 Received: April 26, 2019; revised: June 30, 2019; accepted: July 16, 2019 Mediating Role of Dynamic Capabilities on the Relationship between Human Resource Development and Organizational Effectiveness Mohanad Ali KAREEM1 and Hayder Abdulmohsin MIJBAS2 1Kaposvár University, Faculty of Economic Science, Doctoral School of Management in Kaposvár, Hungary, mohannadali25@gmail.com (corresponding author). 2Al-Mustansiriyah University, Baghdad, Iraq, Hader.hije@uomustansiriyah.edu.iq Background and purpose: The recent literature established that human resource development (HRD) is signifi- cantly related to organizational effectiveness (OE). In rapidly changing environments, the organizations should strive to address the shifts in the environment and cope with markets conditions through developing dynamic capabilities, in return, enhance organizational effectiveness. The main purpose of this study is to examine the mediating role of dynamic capabilities on the relationship between human resources development and organizational effectiveness in the Iraqi public universities context. Design/Methodology/Approach: Data were collected through an online questionnaire survey from 215 employees executive and non-executive employees working in the selected public universities in Iraq. Structural equation mod- eling (SEM) was employed to test the proposed research model. Results: The analyzed data supported all the hypothesized relationships of the study. This study finds that HRD practices have a significant influence on organizational effectiveness and dynamic capabilities. Further, dynamic ca- pabilities significantly influence on organizational effectiveness. Also, the study empirically supports the mediating effect of dynamic capabilities on the relationship between HRD practices and organizational effectiveness. Conclusion: In the literature, there is still a lack of how HRD practices impact on organizational effectiveness through the mechanisms of dynamic capabilities. Therefore, this research contributes to the literature by pointing out the mediating role of dynamic capabilities on the relationship between HRD and organizational effectiveness. Based on the existing literature and empirical results, the study provides the theoretical and practical implications which are further discussed in detail. Keywords: Human resource development, Dynamic capabilities, Organizational effectiveness DOI: 10.2478/orga-2019-0012 1 Introduction Business environments today, characterized by knowl- edge-based competition and rapidly changing markets, require organizations use effective strategies to invest and maximize knowledge and skills. Organizations con- tinually attempt to leverage human resource to achieve organizational success. The concept of human resource development (HRD) has emerged as a strategy to develop and improve employee’s knowledge, skills, and abilities to enhance organizational effectiveness (Gberevbie, 2012). Developing HRD practices have the potential to improve organizational performance. Some empirical research- es have proved that such as (Brockbank, 1999; Garavan, 2007; Clardy, 2008 and Han et al., 2006) emphasis that 188 Organizacija, Volume 52 Issue 3, August 2019Research Papers HRD as a set of responsibilities, competencies, practices, programs, initiatives that have a potential influence on or- ganizational effectiveness. Also, Several researchers (Mc- Cracken & Wallace.2000; Otoo et al. 2018; Shoo 2016; Alagaraja & et al. 2015; and Nilsson & Ellstrom 2012) established that there is a significant relationship between human resource development and organizational effective- ness. Nevertheless, in rapidly changing environments it is ‎compulsory that organizations are prepared for change and have the human capital to meet and cope with the environ- mental turbulence. HRD plays a key role to maintain and develop human resources in accordance with the changing direction of corporate goals and objectives (Shanahan et al. 2012). Hence, in such an environment, superior organ- izational effectiveness based on organizations ability to integrate, build and reconfigure internal and external re- source to address environmental changes, the process of which is termed as dynamic capabilities. Dynamic capa- bilities contribute to organizational effectiveness through an effective modification of existing operating routines, enabling the organization to adopt environmental chang- es by way of sensing environmental conditions, learning response patterns and reconfiguring operating routines. (Teece et al.,1997). Furthermore, many strategic manage- ment researchers (Lado and Wilson 1994; Lepak and Snell 1999; Wright et al. 2001) argue that dynamic capabilities can enhance and sustain organizational effectiveness over time when they are developed with complementary human resource development practices. Despite this progress, there is still a lack in the literature about an understanding of the mediating mechanisms of dynamic capabilities on the relationship between HRD practices and organization- al effectiveness. More recently, studies such as (Wang et al. 2011; Wilhelm et al.,2015; and Helfat et al.,2007) fo- cus on how developing dynamic capabilities by human re- source. Based on the knowledge of the authors there were no studied investigated the alternative relationships except Lopez-Cabrales et al. (2017) investigate the relationship between dynamic capabilities and HRM considering the mediating role of leadership styles Hence, the purpose of this study is to investigate the mediating role of dynamic capabilities on the relationship between human resource development and organizational effectiveness in the se- lected public universities context. Consequently, this study tries to address this gap through proposing an empirical model that demonstrates dynamic capabilities constructs i.e. sensing capabilities, learning capabilities and reconfir- mation capabilities mediate the relationship between HRD constructs i.e. talent development, training and develop- ment, organizational development, and career develop- ment and organizational effectiveness. In addition to, this study is novel which tries to meet the need of the higher education sector in Iraq to such studies, for its influential role in society. The remainder of the article is organized as follows: the first section presents the introduction. The second section describes the literature review. The third section presents the research methodology. The fourth section shows the data analysis and results. The last section presents a dis- cussion of the findings including theoretical and practical implications, study limitations and future research. According to the discussion above, the following ques- tions guided the study design: company B: • Do HRD practices influence organizational effec- tiveness? • Do HRD practices influence dynamic capabili- ties? • Do dynamic capabilities influence organizational effectiveness? • Do dynamic capabilities mediate the relationship between HRD practices and organizational effec- tiveness? 2 Literature review and hypotheses development 2.1 Human resource development contributions to organizational effectiveness and dynamic capabilities This study argues that HRD practices have a direct im- pact on organizational effectiveness regardless of envi- ronmental changes. Several researchers such as (Moham- med 2006; Alagaraja et al., 2015; and Shoo 2016) have discussed this issue. Mohammed (2006) argues that the success and progress of an organization lie in its ability to explore and attract the talent and potentials of its work- force, and this is can be achieved through the HRD prac- tices. Riordan el at (2005) argue that appropriate, ongoing training and development and career development enable employees to develop the skills, abilities, and knowledge required for effective performance, in turn, improve or- ganizational effectiveness. Likewise, Adhikari, (2010) indicates that HRD supports and strengthening of an or- ganization’s human capital base by increasing the level of knowledge, skills, and capabilities of individuals in an or- ganization and thus contributes to improved performance and competitive advantage. Sahoo (2016) argues that HRD practices training, career development, and performance management have an impact on the building of employee competencies which, in turn, enhance organizational effec- tiveness. Agwu & Ogiriki, (2014) argue that use of HRD practices training and development, organizational devel- opment and career development lead to improving organi- zational effectiveness through improvement in individual, 189 Organizacija, Volume 52 Issue 3, August 2019Research Papers group knowledge, skills, attitudes, and behavior. Otoo et al., (2019) argue that HRD practices such as performance appraisal, career development, and training and develop- ment have a significant impact on organizational effective- ness through their impact on employee performance. Sim- ilarly, Swanson and Holton (2009) emphasize that HRD practices improve employee competence, in turn, enhance organizational effectiveness. Alagaraja et al., (2015) state that there are five signifi- cant approaches for investigating the linkage of HRD and organizational performance and effectiveness: First, the best-fit approach which is an emphasis that HRD practic- es must convenient the characteristics of the organization. Second, the best-practice approach suggests HRD practic- es have a positive influence on performance and these prac- tices can be adopted by other organizations for improving performance. Third, a combination of a best-fit approach and best-practice approach suggests that HRD contribu- tions to the organizational effectiveness and performance through the combining of both the approaches. Fourth, the stake holder’s perception approach indicates that investi- gating the impact HRD on organizational effectiveness and performance through the contribution of stakeholder per- ceptions. Fifth, focus on the aforementioned approaches. Nevertheless, in the rapidly changing environment, the organizations need to address environmental shits and changes through developing so-called dynamic capabili- ties. This study states that HRD practices have a signif- icant impact on building dynamic capabilities. However, the relationship between HRD and dynamic capabilities is still under developing (Wright and Snell, 2009). Only a few studies address the linkage between HRD and dynam- ic capabilities (Teece et al., 1997; Eisenhardt and Martin, 2000; Zahra & George, 2002; Teece, 2007; Hsu and Wang, 2012) have confirmed that learning, sensing, integrating, and reconfiguration capabilities of the organization are highly lie on employee’s knowledge, skills, abilities and experienced these are the outcome of human resources de- velopment practices. Likewise, Garavan et al. (2016) ar- gue that HRD practices help employees to work effectively in different environmental conditions and improve knowl- edge, skill, behavioral, and attitudinal outcomes that pro- vide employees with the flexibility to respond to shifts in the environment. When organizations use human resource development practices to develop and leverage human capital, in turn, may catch the benefits of complementari- ties and co-specialization to develop dynamic capabilities (Barney 1991; Grant 1996). Human resource development practices such as training and development performance evaluation and compensation systems have the potential to enhance the dynamic capability and maintain the sus- tainable competitive advantage of organizations (Yan and Gao,2016). In changing environmental conditions HRD practices can increase the flexible organization, organiza- tional learning, resources integration, and environmental perception (Chengcheng, 2010). Teece et al., (1997) de- fine dynamic capabilities as the firm’s ability to integrate, build, and reconfigure internal and external competencies to address rapidly changing environments. Garavan (2007) argues that HRD supports the development of dynamic ca- pabilities that are critical in developing and maintaining a sustained competitive advantage. This study argues that HRD practices have a direct impact on dynamic capabilities. In order to explore in an integrated way, the linkage between HRD and dynamic ca- pabilities, this study determined the dynamic capabilities in three measured dimensions: sensing capability, learning capability, and reconfiguration capability. Sensing capabil- ity is the firm’s ability constantly to discover, explore and interpret opportunities in the environment (Pavlou and El Sawy 2011). Therefore, HRD helps organizations to make sense of shifts in the environment, set plans, and seize op- portunities (Garavan et al., 2016). Eisenhardt & Martin, (2000) state that learning capability is the firm ability’s ac- quiring or creating specific knowledge necessary to seize the identified opportunities. HRD practices improve learn- ing mechanisms such as experience accumulation, knowl- edge creation, and sharing knowledge are critical to the formation of learning capability (Zollo and Winter (2002). Reconfiguration capability refers to the recombination and transformation of existing resources that enable firms to address the changes in market conditions (Teece, 2007). HRD enhances the creation of new capabilities, configure assets and organizational development to address the mar- kets and technologies changes. This study contributes to the theory and research on human resource development contribution to organization- al effectiveness and dynamic capabilities by examining the direct impact of HRD practices on organizational effec- tiveness and dynamic capabilities. Based on the aforemen- tioned contributions, this study hypothesizes H1: HRD practices have a significant impact on organiza- tional effectiveness. H2: HRD practices have a significant impact on dynamic capabilities. 190 Organizacija, Volume 52 Issue 3, August 2019Research Papers 2.2 Dynamic capabilities and organizational effectiveness The dynamic capabilities concept has emerged due to the changes in environments and market. Scholars (Hammer, 2001 and Zott, 2003) have stated that to sustain a com- petitive advantage in a rapidly changing environment, organizations need to develop dynamic capabilities for improving core competencies and enhance organizational effectiveness. This study argues that dynamic capabilities have a significant potential on organizational effectiveness. But, The association between dynamic capabilities and or- ganizational effectiveness and performance is still unclear (Zhou & Zhou, 2017). However, some scholars (Teece et al. 1997; Eisenhardt & Martin, 2000; López, 2005 and Wilden et al, 2013) argue that dynamic capabilities enable organizations to link the resource base with environmental shifts, create market change, and facilitate resource access and resource development, in turn, enhance the organi- zational effectiveness. Teece (2007) argues that dynamic capabilities enable an organization to achieve competitive advantage in a changing business environment through developing specific capabilities and competencies which support organizational effectiveness and performance. Fainshmidt et al., (2016) argue that dynamic capabilities are significantly related to organizational effectiveness. The scholars (Rehman and Saeed, 2015; Takahashi et al.,2016 and Zhou and Zhou,2017) emphasize that dynam- ic capabilities have an indirect impact on the organization- al effectiveness through mediated by the development of operational capabilities. Based on the above discussion, the third hypothesis can be derived as follows: H3: Dynamic capabilities have a significant impact on or- ganizational effectiveness. 2.3 Human resource development, dynamic capabilities, and organizational effectiveness The aforementioned literature have established that HRD practices significantly influence organizational effective- ness. But, in rapidly changing environments, HRD is often not enough to support organizational effectiveness (Teece et al., 1997 and Aminu and Mahmood, 2015). Thus, this study, argues that in such dynamic environment HRD prac- tices have potential to influence organizational effective- ness indirectly through mediating of dynamic capabilities. Moreover, due to rapidly changing in the environment, the organizations should prepare for the change to ad- dress the shifts in the environment and cope with markets conditions. The originations strive to develop capabilities to integrate, build, and reconfigure internal and external competencies to address rapidly changing environments, in return, support make decisions within the organization which has the potential to enhance organizational effec- tiveness and performance (Eisenhardt and Martin, 2000; Teece, 2007). HRD plays a key role to maintain and devel- op human resources in accordance with the changing di- rection of corporate goals and objectives (Shanahan et al. 2012). HRD contributes to the creation of new capabilities and the renewal and reconfigures of existing capabilities to cope with dynamic environments (Zollo and Winter 2002). Therefore, it is significant to study the mediating role of dynamic capabilities in the relationship between HRD and organizational effectiveness. However, due to limited studies in the literature, there is still confusion about how dynamic capabilities mediate the relationship between HRD and organizational effectiveness. Even though, there are few researchers (Lado and Wilson 1994, Tseng and Lee, 2014; Aminu and Mahmood, 2015; and Garavan et al, 2016) investigated this issue. Furthermore, (Lado ‎and Wilson 1994; Wright et al. 2001) argue that dynamic ca- pabilities can ensure sustainable organizational effective- ness when they are developed through HRD practices. Similarly, Garavan et al. (2016) argue that HRD practic- es, structures, and processes can, develop unique dynamic capabilities that enhance the organizational effectiveness in the environmental turbulence. Wang et al.,(2012) argue that to maintaining dynamic capabilities requires organi- zations to develop the human resources that enable them to improve the organizational effectiveness and preference and in correspondence with the dynamic environment. As such, the present study hypothesized that dynamic capa- bilities mediate the relationship between human resources development practices and organizational effectiveness. The hypothesis is presented as follows: H4: Dynamic capabilities significantly mediate the rela- tionship between human resources development practices and organizational effectiveness. Considering the above-mentioned hypothesizes, the study proposed the following model as a conceptual model of this paper (Figure 1). 191 Organizacija, Volume 52 Issue 3, August 2019Research Papers Figure 1: Conceptual model HRD=Human Resource Development, DC=Dynamic Capabilities, OE=Organizational Effectiveness, TD=Talent Develop- ment, T&D=Training & Development, OD=Organizational Development, CD=Career Development SC=Sensing Capability, LC=learning Capability= Reconfiguring Capability, GA=Goal Approach, SRA=System Resource Approach, CVA=Competing Values Approach. 3 Research methodology 3.1 Research design, sampling and data collection To test the proposed model, this research employed a de- ductive approach based on a quantitative method. The purpose of this quantitative method is to examine the me- diating role of dynamic capabilities on the relationship between human resource development and organization- al effectiveness. According to Sekaran & Bougie, (2013) quantitative method is appropriate to use in hypotheses testing of the relationship between independent and de- pendent variables. The study took place in top ten Iraqi public universities. For collecting the primary data this research used the survey method because it is considered an economical and efficient method to gather quantitative data concerned to a given population for the purpose of generalizing the result. This study employed a web-based survey for collecting data from the sample of the study. An online questionnaire was developed based on the literature (see table 2 and appendix 1) to collect the primary data. The questionnaire was created by the google-forms tool, which is commonly used by researchers for collecting data. The web-based questionnaires were distributed through E-mail designed to collect the primary data from the selected universities. The sample is including a number of deans, heads of departments, faculty members, principals, and ad- ministrative staff which seems to provide a corresponding sample for conducting data collecting and analyzing. The questionnaire was distributed to around 342 employees, out of which 215 completed questionnaires were obtained, with a response rate of 62.86 % of the respondents. The de- mographic data of the respondents are presented in Table 1. It shows that out of the 215 respondents, (76.74%) were males. The majority of the respondents (44.65%) were in the age category within 31-40 years. Most of the respond- ents at (61.86%) were non-executive designation and (38.13) were an executive designation. The majority of the respondents (47.44%) were holders Ph.D. degree while (40.46%) were holders master’s degree and (12.93%) were holders bachelor’s degree. A little lower than half of the respondent (41.39%) had work experience 11-20 years. 3.2 Data analysis procedure Data analysis was conducted to address the research ques- tions, objectives and hypotheses. Statistical Package for Social Science (SPSS) version 23 and the Analysis of Mo- ment Structures (AMOS) software version 24 were used for analyzing data. Before conducting data analysis, the data preparation was done on the completed question- naires by editing, coding, entering and cleaning the data. Descriptive statistics such as the frequency and percent- age, mean, standard deviation, were used to provided data summarization of demographic characteristics of respond- ents. Also, the Pearson correlation coefficient was used to describe the correlations among the variables. Confirmato- ry factor analysis (CFA) was carried out to assess the va- lidity of the measurement model, fitting and modification. 192 Organizacija, Volume 52 Issue 3, August 2019Research Papers Also, Cronbach’s Alpha was used to examine the reliabil- ity of the scale items. The overall model fit was assessed using five goodness-of-fit indices, namely the chi-square/ degree of freedom (χ2/df) ratio, the comparative fit index (CFI), the Tucker-Lewis index (TLI), the goodness of fit index (GFI), the root means square error of approxima- tion (RMSEA). In addition, squares structural equation modeling (SEM) was used to test empirically the proposed hypotheses. SEM is commonly used in the social sciences because of its ability to explain the relationships between unobserved constructs (latent variables) from observable variables (Henson & Roberts., 2006). SEM is comparable to common quantitative methods, such as correlation, mul- tiple regression, and analysis of variance to estimate and test the relationships among constructs. 3.3 Instrumentation development and measures The questionnaire was developed based on an extensive review of the literature related to the topic of the study. The questionnaire comprises of two sections. Section one col- lects participant & institutional background information of the respondents such as age, gender, a position held, educational attainment, work experience, and organiza- tion size. Section two includes questions are designed to measure the variables of the study by using a comparative seven-point Likert-type scale ranging from 1-7, in which (1 = strongly disagree, 7 = strongly agree). The variables used in this study were assessed using multiple items from different studies in the extant literature. Human resource development: was operationalized as a four-dimensional construct: talent development, training and development, organizational development, and ca- reer development. 20 items are designed to measure HRD constructs by employing five items for each construct re- spectively, these items were adopted from (Mahfoozi et al.,2018),( Asfaw et al.2015),( Spirina,2015), (Zadeha & Ghahremanib, 2016), (Xueling,2017), (Weng&McElroy, 2012). Dynamic capabilities: dynamic capability was opera- tionalized by three dimensions: sensing capability, learn- ing capability, integrating capability. 15 items are designed to measure dynamic capabilities constructs by employing five items for each construct respectively. The items were adapted from (Teece et al., 1997), (Eisenhardt and Martin, 2000), (Nieves& Haller, 2014). Organizational effectiveness: was measured by three approaches: goal approach, system resource approach, and competing values approach. 12 items were used to meas- ure organizational effectiveness by employing four items for each construct respectively. The items were adapt- ed from (Gold et al., 2001), (Rahman et al., 2013),( Ba- nat,2002),( Abu el Khair,2016). Also, Cronbach ‘s alpha coefficient was used to evaluate the internal consistency of the scales where Cronbach ‘s alpha coefficient for all the constructs ranges between 0.874 and 0.962 and it is considered acceptable which indicates that all the items Table 1: The demographic data of the respondents Item Frequency Percentage Gender of the respondent Male 165 76.74 Female 50 23.25 Age of the respondent 20-30 years 34 15.81 31-40 years 96 44.65 41-50 years 65 30.23 51-60 years 14 6.51 More than 61 years 6 2.79 Designation Executive 82 38.13 Non-Executive 133 61.86 Educational achievements Bachelor’s Degree 26 12.93 Master’s Degree 87 40.46 Ph.D. Degree 102 47.44 Work Experience Less than 5 years 31 14.41 5-10 years 63 29.30 11-20 years 89 41.39 More than 21 years 32 14.88 193 Organizacija, Volume 52 Issue 3, August 2019Research Papers are internally consistent. Table (2) shows detailed information regarding the variables, sources, number of the items and Cronbach’s alpha. variables Source Number of items Cronbach’s alpha Human Resource Development Talent development (Mahfoozi et al., 2018) 5 0.946 Training and development (Asfaw et al., 2015) 5 0.932 Organizational development (Rastgoo, 2016) and (Zadeha & Ghahremanib, 2016) 5 0.947 Career development (Weng & McElroy, 2012) and (Xueling, 2017) 5 0.953 Dynamic Capabil- ities Sensing capability Teece et al. ,1997);( Eisenhardt and Martin ,2000);( Nieves&Hal- ler,2014) 5 0.924 Learning capability 5 0.962 Reconfiguring capability 5 0.938 Organizational Effectiveness Goal approach (Banat,2002) 4 0.931 System resource approach (Abu El Khair, 2016) 4 0.874 Competing values approach (Gold et al., 2001),(Rahman et al., 2013) 4 0.936 Table 2: The study measures in regard to the variables, sources, and Cronbach’s alpha 4 Results 4.1 Descriptive statistics Table 3 shows a descriptive analysis (mean and standard deviation) of the data and the correlations matrix among variables. The means score for all the constructs is locat- ed between (3.29-3.80) and standard deviation (1.48-1.62) that indicates a good implementation of HRD practices and dynamic capabilities in enhancement organizational effectiveness in the selected public universities of Iraq. Also, the results show that each of the constructs is posi- tively and significantly correlated with each other. 4.2 Measurement model To assess the validity of the measurement model and to test the fitting of the data with the proposed model confirmato- ry factor analysis (CFA) was used to assess the fitness of a measurement model. This study used some indexes like CMIN/df, GFI, TLI, CFI, and RMSEA to investigate the goodness of fit of the model. Table 4 presents the results of the index of confirmatory factor analysis. The results indi- cate that the goodness-of-fit indicators of all three models are satisfied with the suggested threshold value by (Jacob et al., 2003) thus, indicated good model fitness. 194 Organizacija, Volume 52 Issue 3, August 2019Research Papers 4.3 Reliability and Validity In this study and before testing the hypotheses reliabili- ty and validity of measurement scales were assessed by using confirmatory factor analysis (CFA), and AMOS 24 was used to estimate convergent validity and discriminant validity. The reliability of the scales was evaluated using Cronbach’s alpha coefficient as it is seen in table 2, Cron- bach’s alpha coefficient for all constructs ranges between 0.874 and 0.962 and it is considered acceptable which in- dicates that all the items are internally consistent (Hair et al., 2010). In order to determine the convergent validity, there are three important indicators of convergent validity which are factor loadings (standardized estimates), Aver- age Variance Extracted (AVE) and Composite Reliability (CR). Hair et al., (2006) suggests that the items with load- ings in between .50 to .70 can be maintained. This study investigates that the item loadings all exceeded the thresh- old value and statistically significant (p<0.05) (see table 4). Composite reliability (CR) for all constructs ranges between 0.767 and 0.955 which are above 0.50 that indi- cates that all the constructs have a good level of composite reliability (CR) as recommended by (Hair et al., 2012). The average variance extracted (AVE) value for all the constructs are in the range between .632 to .827 which are above the threshold value .50 which is suggested by (Hair et al., 2010). Table 3: Descriptive and correlation results Mean S. D TD T&D OD CD SC LC RC GA SRA CVA HRD DCs OE TD 3.29 1.59 1.0 T&D 3.49 1.56 .77** 1.0 OD 3.46 1.60 .77** .82** 1.0 CD 3.35 1.59 .75** .79** .83** 1.0 SC 3.38 1.53 .79** .79** .84** .80** 1.0** LC 3.41 1.54 .80** .81** .86** .84** .88** 1.0 RC 3.53 1.56 .77** .81** .84** .79** .84** .86** 1.0 GA 3.80 1.62 .73** .83** .85** .78** .80** .84** .84** 1.0 SRA 3.44 1.48 .70** .79** .76** .71** .77** .85** .82** .85** 1.0 CVA 3.80 1.53 .62** .69** .70** .69** .67** .72** .73** .77** .74** 1.0 HRD 3.39 1.58 .90** .92** .93** .92** .87** .90** .87** .87** .80** .74** 1.0 DCs 3.44 1.54 .82** .84** .88** .85** .95** .96** .94** .87** .85** .74** .92** 1.0 OE 3.68 1.54 .73** .83** .83** .79** .80** .87** .86** .94** .93** .90** .87** .88** 1.0 **. Correlation is significant at the 0.01 level (2-tailed). HRD=Human Resource Development, DCs=Dynamic Capabilities, OE=Orginzational Effectiveness, TD=Talent Develop- ment, T&D=Training & Development, OD=Organizational Development, CD=Career Development SC=Sensing Capability, LC=learning Capability= Reconfiguring Capability, GA=Goal Approach, SRA=System Resource Approach, CVA=Competing Values Approach. Measurement Items used for calculation of the listed variables are explained in ‎Appendix 1. Table 4: Index of confirmatory factor analysis HRD model DC model OE model CMIN/df 1.895 1.547 1.828 GFI 0.874 0.883 0.900 TLI 0.931 0.970 0.955 CFI 0.944 0.978 0.973 RMSEA 0.0721 0.073 0.070 195 Organizacija, Volume 52 Issue 3, August 2019Research Papers Constructs Measurement Items Factor Loading CR AVE P.Value Talent Development TD5 0.852 0.947 0.780 .000 TD4 0.884 .000 TD3 0.896 .000 TD2 0.898 .000 TD1 0.852 .000 Training &Development T_D5 0.807 0.932 0.732 .000 T_D4 0.902 .000 T_D3 0.886 .000 T_D2 0.855 .000 T_D1 0.827 .000 Organizational Deve- lopment OD5 0.900 0.948 0.785 .000 OD4 0.900 .000 OD3 0.904 .000 OD2 0.875 .000 OD1 0.850 .000 Career Development CD5 0.854 0.955 0.808 .000 CD4 0.952 .000 CD3 0.904 .000 CD2 0.922 .000 CD1 0.861 .000 Sensing Capability SC1 0.769 0.767 0.709 .000 SC2 Deleted .000 SC3 0.769 .000 SC4 0.915 .000 SC5 0.876 .000 Learning Capability LC1 0.875 0.899 0.827 .000 LC2 0.871 .000 LC3 0.919 .000 LC4 0.961 .000 LC5 0.918 .000 Reconfiguration Ca- pability RC1 0.818 0.837 0.762 .000 RC2 0.783 .000 RC3 0.938 .000 RC4 0.951 .000 RC5 0.863 .000 Table 5: Constructs evaluation 196 Organizacija, Volume 52 Issue 3, August 2019Research Papers Discriminant validity was assessed by using two methods: First,(Fornell & Larcker, 1981) method. He suggested that to support for discriminant validity if the square root of the AVE for a latent construct is greater than the correla- tion values among all the latent variables. Table (5) shows that the square root of the AVE values of all the constructs is greater than the inter-construct correlations which sup- ports the discriminant validity of the constructs. Second, (Hair et al., 2010) he suggests if AVE for a latent construct is larger than the maximum shared variance with other la- tent constructs that indicates discriminant validity can be maintained Thus, the measurement model indicates a good construct validity and desirable psychometric properties. Goal Approach GA4 0.901 0.932 0.789 .000 GA3 0.837 .000 GA2 0.904 .000 GA1 0.910 .000 System Resource Approach SRA4 0.883 0.872 0.632 .000 SRA3 0.733 .000 SRA2 0.722 .000 SRA1 0.797 .000 Competing Values Approach CVA4 0.904 0.936 0.772 .000 CVA3 0.940 .000 CVA2 0.824 .000 CVA1 0.841 .000 Table 5: Constructs evaluation (continued) CR =Composite Reliability and Average, AVE=Variance Extracted AVE MSV TD T_D OD CD SC LC RC GA SRA CVA TD 0.780 0.682 0.883 T_D 0.732 0.706 0.823 0.855 OD 0.785 0.749 0.816 0.817 0.886 CD 0.808 0.664 0.785 0.827 0.866 0.898 SC 0.709 0.697 0.532 0.721 0.781 0.421 0.842 LC 0.827 0.807 0.621 0.608 0.801 0.305 0.723 0.909 RC 0.762 0.714 0.712 0.512 0.601 0.541 0.801 0.621 0.872 GA 0.789 0.701 0.798 0.836 0.821 0.850 0.721 0.653 0.812 0.888 SRA 0.632 0.501 0.788 0.648 0.771 0.708 0.765 0.541 0.700 0.695 0.795 CVA 0.772 0.727 0.068 0.744 0.754 0.737 0.321 0.652 0.756 0.691 0.609 0.886 Table 6: Discriminant validity of the constructs Notes: Bold values in diagonal represent the squared root estimate of AVE. AVE= Average Variance Extracted, MSV= Maxi- mum shared variance 197 Organizacija, Volume 52 Issue 3, August 2019Research Papers 4.4 Common method bias Checks Due to this research is employed a cross-sectional with a self-report questionnaire, common method variance (CMV) may affect systematic measurement accuracy (Podsakoff and Organ, 1986). Harman’s single-factor test was used to address this issue by using exploratory factor analysis (EFA). The results show that the total variance for a single factor is less than 50% which means that common method bias does not confound the interpretations of the results. 4.5 The structural model: test of hypotheses 4.5.1 The direct effects Structured equation modeling (SEM) was used to test the hypothesized model. The results of the proposed structur- al model show the good fit (CMIN/df=1.418, GFI=0.925, TLI= 0.986, CFI=0.990, RMSEA=0.064). In order to ver- ify the following hypotheses, H1, H2, H3 direct effects were assessed. The results, presented in (Figure 2 and Ta- ble 5) indicate that the three hypotheses are supported. In particular, HRD practices have a significant impact on or- ganizational effectiveness (β=0.390, p<0.001) supporting H1. Similarly, the results revealed that HRD practices have a significant impact on the dynamic capabilities (β=0.982, p<0.001), therefore the hypothesis H2 is supported. Also, the results confirmed that dynamic capabilities signifi- cantly influence organizational effectiveness (β=0.568, p<0.001) which is supporting the hypothesis H3. NO. Hypotheses path Beta Coeffi- cient P. Value Result H1 HRD→OE 0.390 0.001 Supported H2 HRD → DC 0.982 0.001 Supported H3 DC→ OE 0.568 0.001 Supported Table 7: Results of direct effects NO. Hypotheses path Beta Coefficient P. Value 95%LL 95%UL Result H4 HRD→ DC→ OE 0.558 0.001 0.073 0.533 Supported Table 8: Results of mediating effect Hypothesis is supported, when there is no zero between lower and upper limits, LL: Lower limit, UL: Upper Figure 2: The SEM model analysis 198 Organizacija, Volume 52 Issue 3, August 2019Research Papers 4.5.2 The mediating effects In order to test hypothesis H4 indirect effect was assessed. The results showed in table 6 indicate that dynamic capa- bilities are significantly mediate the relationship between HRD practices and organizational effectiveness (β=0.558, p<0.001). Also, the bootstrapping was used in order to calculate the 95% confidence interval of the indirect. The results show there is no zero between lower and upper limits which is provided evidence that hypothesis H4 is supported. 5 Discussion and Conclusions Due to limited studies in the literature, there is still con- fusion about how the impact of HRD practices on organi- zational effectiveness through the mechanisms of dynam- ic capabilities. The aim of this study is to investigate the mediating role of dynamic capabilities in the relationship between HRD practices and organizational effectiveness in the selected Iraqi public universities context. This study proposed a causal model that explains the relationship between HRD practices and organizational effectiveness through the role played by dynamic capabilities. The pres- ent study found out four key findings. First, HRD practices significantly influence organizational effectiveness which is in line with the suggestions of (Mohammed 2006; Alaga- raja et al., 2015; and Shoo 2016). Second, HRD practices have a significant impact on dynamic capabilities which is in line with the opinions of (Garavan et al.,2016; Yan and Gao,2016 and Teece, 2007). Third, dynamic capabilities significantly influence organizational effectiveness which is consistent with (Zhou,2017; Fainshmidt et al., 2016 and Teece et al, 1997). Fourth, dynamic capabilities sig- nificantly mediate the relationship between HRD practices and organizational effectiveness which is in line with the opinions (Zollo and Winter 2002; Aminu and Mahmood, 2015). In conclusion, this study argues that the relationship between HRD practices and organizational effectiveness is not direct in changing business environments but through the mediating role of dynamic capabilities. Consequently, in such shifts and turbulences in business environments, organizations need to develop not only a human resource but also dynamic capabilities for sensing environmental conditions, learning response patterns and reconfiguring operating routines, in turn, organizations will be able to achieve superior organizational effectiveness. 5.1 Theoretical contributions of the study Regarding the theoretical contribution, this study provides a research model for empirical literature in the field of human resource devolvement, dynamic capabilities, and organizational effectiveness. Specifically, this study devel- oped a model to investigate the direct relationship between HRD and organizational effectiveness and dynamic capa- bilities and the relationship between dynamic capabilities and organizational effectiveness as well as to examine the mediating role of dynamic capabilities on the relationship between HRD and organizational effectiveness. The re- sults from a structural equation modeling approach have confirmed all the hypothesized relations. The results show that HRD practices significantly impact on organizational effectiveness and dynamic capabilities. The study shows that dynamic capabilities have a positive impact on organ- izational effectiveness. Also, the study empirically sup- ports the mediating effect of dynamic capabilities on the relationship between HRD practices and organizational effectiveness. Despite of, that HRD, dynamic capabilities and organizational effectiveness have attracted considera- ble attention in the literature but, only very limited studies have highlighted the mediating role of HRD capabilities in the relationships between HRD and organizational ef- fectiveness. Therefore, the empirical findings of this study have potential significant to fill the gap in the literature. 5.2 Managerial implications of the study Besides the theoretical implications, this study provides practical implications for universities management, the present study provides significant insight and demonstrates a good understanding of HRD practices, dynamic capabil- ities and organizational effectiveness in the selected Iraqi public universities context. The findings of this study have the potential to help decision-makers to design their HRD practices to contribute to enhance organizational effective- ness. The study brings universities management closer to understand the role of dynamic capabilities to integrate, build, and reconfigure internal and external competencies to address rapidly changing environments, in turn, support make decisions within the organization which has the po- tential to enhance organizational effectiveness and perfor- mance. In such an environment, universities management should develop not only HRD practices but, also adopt dy- namic capabilities mechanisms to improve organizational effectiveness. 5.3 Limitations and future research Despite of the theoretical and managerial contributions, this study has some limitations that need to be addressed in future research. First, this study focuses on the top ten Iraqi public universities context, which may not be exclusively generalizable to other sectors. Therefore; future research may investigate this phenomenon in other businesses and economic context. Second, the sample of the study some- what is small because of the unsafe situation in Iraq the 199 Organizacija, Volume 52 Issue 3, August 2019Research Papers authors couldn’t get an appropriate sample. However, fu- ture research may conduct in big enough and appropriate sample. Third, this study adopts a cross-sectional research method for data collection, which does not allow the re- searcher to examine the causality of the relationships be- tween the variables in greater depth. Thus, future research should aim to use longitudinal data which could explain the highlighted relationships more insights. Fourth, this study focuses on four dimensions of HRD, three dimen- sions of dynamic capabilities and three dimensions of or- ganizational effectiveness, therefore, future research may include other potential dimensions. The findings of this study are limited to the selected Iraqi public universities context and cannot be generalized to other countries and other businesses context. Literature Abu El Khair, R. H. (2016). Productive university re- quirements, And their relationship with Orga- nizational effectiveness in technical colleges in Gaza Governorates. Gaza: Al Azhar University. Adhikari, D. R. (2010). 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Dynamic capabilities and the emergence of interindustry differential firm performance: insights from a simulation study. Strategic Management Jour- nal, 24(2), 97-125,. https://doi.org/10.1002/smj.288 Mohanad Ali Kareem is a Ph.D. candidate at Kaposvár University, Faculty of Economic Science, Doctoral School of Management and Organizational Science, Hungary. His research focuses on human resources management, Strategic management, and organizational behavior. Hayder Abdulmohsin Mijbas is an Assistant Lecturer at Al-Mustansiriya University, Department of Business Administration, Iraq. He is also the director of the Department of Finance of Al-Mustansiriya University. His research focuses on Strategic Management, Operation Management, and Information Management. 202 Organizacija, Volume 52 Issue 3, August 2019Research Papers Appendix: List of Measurement Items HRD practices: 1.Talent Development TD1. Our university\institute attracts and recruit the right talent TD2. Our university\institute identifies existing talent TD3. Our university\institute nurtures and develop talent TD4. Our university\institute ensures the talent engagement TD5. Our university\institute ensures the talent retention 2.Training and Development T&D1. Our university\institute has effective training and development programs T&D2. The activities of training development programs provided enable to improve skills, knowledge, attitude chan- ge, new capability of the employee. T&D3. The activities of training programs provided help to increase job satisfaction and work efficiency. T&D4. Our university\institute uses a modern training and development methods and tools. T&D5. Evaluate the trainees’ overall satisfaction with the training program. 3.Organizational Development GD1. Our university\institute makes efforts to development of human resources according to organizational change GD2. Our university\institute encourages the change management GD3. Our university\institute ensures the organizational restructuring GD4. Our university\institute encourages the teamwork GD5. Our university\institute encourages the problem-solving culture 4.Career Development CD1. The organizational structure of the university\institute facilities the career planning and development CD2. Our university\institute offers career counseling. CD3. Our university\institute gives training to help develop my career CD4. Our university\institute has a fair promotion CD5. Our university\institute ensures the growth of remuneration. Organizational effectiveness: 1.Competing Values Approach CVA1. Our university\institute makes efforts to improve the productivity CVA2. Our university\institute adapts to the changing environment CVA3. Our university\institute makes efforts to the optimization of resources CVA4. Our university\institute makes efforts to the stability Vloga dinamičnih sposobnosti pri odnosu med razvojem človeških virov in organizacijsko učinkovitostjo Ozadje in namen: Novejša literatura je pokazala, da je razvoj človeških virov (HRD) pomembno povezan z orga- nizacijsko učinkovitostjo (OE). V hitro spreminjajočih se okoljih bi si morale organizacije prizadevati za reševanje sprememb v okolju in se spoprijeti s tržnimi razmerami z razvojem dinamičnih zmogljivosti, v zameno pa povečati organizacijsko učinkovitost. Glavni namen te študije je preučiti posredovalno vlogo dinamičnih zmogljivosti pri pove- zavi med razvojem človeških virov in uspešnostjo organizacije na iraških javnih univerzah. Zasnova / metodologija / pristop: Podatki so bili zbrani s spletno anketo med 215 zaposlenimi na izbranih javnih univerzah v Iraku. Za testiranje predlaganega raziskovalnega modela je bilo uporabljeno modeliranje strukturnih enačb (Structural Equation Modelling - SEM). Rezultati: analiza podatkov je podprla vsa predpostavljena razmerja študije. Pokazalo se je, da HRD prakse po- membno vplivajo na organizacijsko učinkovitost in dinamične sposobnosti. Nadalje dinamične zmogljivosti po- membno vplivajo na učinkovitost organizacije. Študija tudi empirično podpira posredovalni učinek dinamičnih spo- sobnosti na odnos med praksami HRD in organizacijsko učinkovitostjo. Zaključek: Literatura še ni v celoti pojasnila, kako HRD prakse vplivajo na učinkovitost organizacije s pomočjo me- hanizmov dinamičnih sposobnosti. Naša raziskava ugotavlja posredniško vlogo dinamičnih sposobnosti na povezavi med HRD in organizacijsko učinkovitostjo. Na podlagi obstoječe literature in empiričnih rezultatov študija ponuja teoretične in praktične posledice, ki so podrobneje predstavljene v članku. Ključne besede: razvoj človeških virov, dinamične sposobnosti, organizacijska učinkovitost 203 Organizacija, Volume 52 Issue 3, August 2019Research Papers 2.Goal Approach GA1. Our university\institute ensures goal achievement GA2. Our university\institute has an effective strategic planning GA3. Our university\institute encourages the innovation GA4. Our university\institute makes efforts improve the quality 3.System Resource Approach SRA1. Our university\institute has the ability to acquire resource SRA2. Our university\institute has good physical infrastructures and equipment SRA3. Our university\institute ensure the accreditation SRA4. Our university\institute encourages the organizational health Dynamic capabilities 1.Sensing capability SC1. Our university\institute conducts environmental assessment to identify new job opportunities SC2. Our university\institute ensures the performance assessment SC3. our university/institute dedicates much time to applying ideas for new educational programs and improving existing educational programs SC4. Our university\institute encourages the collaboration readiness SC5. Our university\institute encourages the changing and renewal 2.Learning Capabilities LC1.Our university\institute has effective routines to identify, value, and import new information and knowledge. LC2.Our university\institute has appropriate routines to assimilate new information and knowledge. LC3.Our university\institute has effective in transforming existing information into new knowledge. LC4.Our university\institute has effective in utilizing knowledge in new services. LC5.Our university\institute has effective in developing new knowledge that has the potential to influence service 3.Reconfiguration Capabilities RC1. Our university\institute has a clear human resource re-allocation procedure RC2. Our university\institute makes efforts to organizational response to environmental changes. RC3. Our university\institute fasts response to competitor's actions. RC4. Our university\institute has an effective communication with cooperative organization. RC5. Our university\institute fasts response to changes in the needs of its clients.