Does it is possible to understand technological innovation independently of human resources management and knowledge management practices? Do competencies and knowledge are substitutes or complements to incentives and motivations? Where is the place for the integration of incentives theories and competencies theories?

This paper examines, empirically and theoretically, the knowledge creation, sharing and transferring process within manufacturing firms in an innovation perspective.

First, using French data set, we aim at studying the complementarities between knowledge management and human resource management practices (henceforth, KM and HRM), and their impact on innovation. Organizational diversity of the firms is showed. Based on a detailed descriptive analysis and cluster analysis we identify three clusters or bundles of organizational practices as "KM and HRM practices systems". These three clusters characterized respectively (i) traditional firms at the work organisation concerned; (ii) firms using incentives personnel practices and (iii) learning firms using, added to incentives, knowledge management practices.

These three clusters correspond to theoretical organisational models. Traditional firms correspond to hierarchy firms based on control and evaluation of employees. Firms using incentives practices are linked to agency and incentives theories where hierarchy and control are replaced by incentives and motivations. Finally, learning firms highlights the limits of agency and incentives theories, and are linked to evolutionary theories based on competencies and knowledge. This typology correspond to modern organisational forms without forgetting inspired tayloring firms, but show the important place of incentives to develop knowledge management. We estimate various econometric specifications that permit to conclude that KM and HRM practices bundles have significant and positive impact on innovation performance, while marginal changes in individual practices have little effect. Empirical evidence confirms that complementarities between KM and HRM practices exist such as these components practices reinforce each others.

Second, we focus on four specific practices mainly used by firms: team, incentives, training and knowledge management. We use a new testing procedure for complementarity and substitutability in case there are multiple organizational practices that affect innovative performance. This procedure is based on multiple inequality restriction. In an innovation perspective, our results suggest that firms use some practices in a joint way and systematically. This logic of interrelationships and interdependencies between human resource management and knowledge management practices accounts for synergies existing between these practices.

The result supports the notion that knowledge management is more effective if accompanied by team organization and associated incentives. In other words, team work must be systematically associated with incentives and knowledge management in order to reach the maximum performance. It pleads in favour of the important interrelations and couplings between specific HRM practices and knowledge management to enhance innovation performance. Knowledge management thus implies a deep organisational renewal of the firms rather than a management fashion effect.

Third, these empirical results imply to construct a more comprehensive integration between agency and incentives theories and theories based on competencies and knowledge. We investigate theoretically the impact of practices implementation costs within firms. This model permit to explain the intensive use of practices in some industry sectors where as some firms maintains the use of traditional practices. An important result is that competencies and knowledge practices complements, and not substitutes, incentives and motivations schemes. This paper permits to map out a more comprehensive structure and strategy of the firms in the knowledge-based economy.