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Organization Context and Human Resource Management in the Small Firm

  • de Kok, Jan
  • Uhlaner, Lorraine M

This paper examines the relationship between organization contextual variables and humanresource management (HRM) practices in small firms. The proposed model is based on anintegration of theoretical perspectives, including the resource-based approach, institutionaltheory, transaction cost economics (TCE), and concepts from strategic management. The model isexplored empirically, with qualitative and quantitative analyses of data collected from a sample ofsixteen small Dutch firms. Specific contextual variables examined include company size, thepresence of a collective labor agreement, having a large firm associate, either as supplier,purchasing group or franchiser, and the company's strategic orientation toward growth (growthstrategy). An important finding is the significance of having a large firm associate. Companies witha large firm associate are more likely to report having employer-based training programs. Aspredicted, company size is associated with more formal HRM practices, including greater regularityof performance appraisal and greater likelihood of employer-based training. A weak relationship isfound between a more growth-oriented strategy and greater formality of these two HRM practices.Predictions based on collective labor agreements are not supported. The paper concludes that thefindings warrant further research on the relationship between organization contextual variablesand the formalization of HRM practices, although a clearer definition of the latter variable isneeded in future research.

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Article provided by Springer in its journal Small Business Economics.

Volume (Year): 17 (2001)
Issue (Month): 4 (December)
Pages: 273-91

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Handle: RePEc:kap:sbusec:v:17:y:2001:i:4:p:273-91
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  1. David B. Audretsch & A. Roy Thurik, 2000. "Capitalism and democracy in the 21st Century: from the managed to the entrepreneurial economy," Journal of Evolutionary Economics, Springer, vol. 10(1), pages 17-34.
  2. John MacDuffie, 1995. "Human resource bundles and manufacturing performance: Organizational logic and flexible production systems in the world auto industry," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 48(2), pages 197-221, January.
  3. Ichniowski, Casey & Shaw, Kathryn & Prennushi, Giovanna, 1997. "The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines," American Economic Review, American Economic Association, vol. 87(3), pages 291-313, June.
  4. Ferligoj, Anuska & Prasnikar, Janez & Jordan, Vesna, 1997. " Competitive Advantage and Human Resource Management in SMEs in a Transitional Economy," Small Business Economics, Springer, vol. 9(6), pages 503-14, December.
  5. John Paul Macduffie, 1995. "Human Resource Bundles and Manufacturing Performance: Organizational Logic and Flexible Production Systems in the World Auto Industry," ILR Review, Cornell University, ILR School, vol. 48(2), pages 197-221, January.
  6. Koch, C. & de Kok, J., 1999. "A Human-Resource-Based heory of the Small Firm," Papers 9906/e, NEUHUYS - RESEARCH INSTITUTE FOR SMALL AND MEDIUM.
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