Human resource executives and post-IPO firm growth

Abstract

Purpose The purpose of this paper is to examine the relationship between human resource (HR) executive representation in top management and the growth of newly public firms. It draws upon research on strategic leadership, strategic HR management and Penrose’s theory of firm growth to consider the role of HRs executives in addressing demands placed upon top managers in the pursuit of firm growth. This study attempts to extend the focus of research on the influence of HR executives on organizational outcomes Design/methodology/approach In order to test study hypotheses, this study analyses data from a sample of US newly public firms that underwent initial public offerings (IPO) during the 2007 calendar year. Study data were analyzed using ordinary least squares regression in order to test study hypotheses. Findings This study provides general support for study hypotheses. First, HR executive presence in top management was found to be positively related to post-IPO firm growth. Second, upper echelon size and the number of firm employees were found to weaken the positive effect of HR executive presence in top management on post-IPO firm growth. Research limitations/implications As a consequence of study design, the results found in this study may be limited with respect to their external validity. Therefore, researchers and practitioners are encouraged to use caution before generalizing study findings to other contexts. Practical implications This study provides implications for top management team staffing and the pursuit of firm growth. Newly public firms appear to benefit in terms of firm growth by including HR executives in top management. The benefits of doing so appear to be reduced for newly public firms as the size of their upper echelons and number of employees increase. Originality/value This study extends research on the firm level consequences of HR executive presence in top management as well as research on factors which influence firm growth.