The Dynamics of Labour Flexibility: Relationships between Employment Type and Innovativeness Angel Martínez-Sánchez, María-José Vela-Jiménez, Manuela Pérez-Pérez and Pilar de-Luis-Carnicer University of Zaragoza  This paper investigates the relationship between flexible human resource (HR) practices and innovativeness. Testing the research model in a sample of first-tier automotive suppliers indicates that internal flexibility practices are positively related to innovativeness. Regarding external flexibility, the association depends on the type of contingent employee: negative association for ‘short-term hires’ and positive association for ‘consulting/contracting firms’. The relationships to innovativeness for practices associated with knowledge transfer are moderated by environmental dynamism, but the non-knowledge related practices are not. Firms in highly dynamic environments can benefit more from flexible HR practices than firms in less dynamic environments. INTRODUCTION Innovation contributes to the firm’s competitive advantage by giving the firm a first- mover advantage and enabling it to differentiate itself in the market (Damanpour et al., 1989). Among the factors influencing innovation (Camison-Zorzona et al., 2007), the relationship between human resource (HR) flexibility and innovation has received little attention. HR flexibility focuses on adapting employee attributes (such as skills or behav- iours) to changing environmental conditions (Wright and Snell, 1998). This flexibility is important because it influences innovation in several ways. For instance, skill polyvalence enables employees to respond better to stimuli which have appeared previously (Bhat- tacharya et al., 2005; Lado and Wilson, 1994) by thinking of new ideas and introducing more products, more quickly than competitors (Koste and Malhotra, 2000; Tatikonda and Rosenthal, 2000). However, prior research has not established consistent relationships between HR flexibility and innovation. Whereas some theoretical perspectives and empirical research suggest the need to build and sustain committed human resources with full-time and permanent contracts (Atkinson, 1984; Michie and Sheehan, 2003), others argue that Address for reprints: Angel Martínez-Sánchez, Departamento de Economía y Dirección de Empresas, Centro Politécnico Superior, María de Luna, 3. Zaragoza 50018, Spain (anmarzan@unizar.es). © 2010 The Authors Journal of Management Studies © 2010 Blackwell Publishing Ltd and Society for the Advancement of Management Studies. Published by Blackwell Publishing, 9600 Garsington Road, Oxford, OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA. Journal of Management Studies 48:4 June 2011 doi: 10.1111/j.1467-6486.2010.00935.x