The Synergistic Potential of Human Resource Management in Small and Medium Enterprises

Abstract

In large-scale operations, strategically orientated Human Resource Management generally has a structural function. In small- and medium-sized enterprises, however, strategic intent has to be more intimately matched to entrepreneurial behavior of core management. In these firms, HR is not an added layer but rather a key synergistic element in their strategic configuration. Considering the economic challenges faced by the small firm, it would seem that some form of strategically orientated HR is beneficial; however, it is often unconsidered. Taking a resource-based view of the firm and a configurational approach to strategy, this chapter considers the challenges to strategically orientated HR adoption in small entrepreneurial enterprises. It examines the characteristics of entrepreneur-founders, strategic orientation, and strategic configuration in an increasingly globalized context. Challenges to HRM adoption are identified, and a number of possible solutions are considered.