The Structuringof Working Relationships in Small Firms: Towards a Formal Framework

Abstract

Small firms operating in competitive conditions are often assumed to follow the dictates of the market. Existing institutionalist research shows that they are in fact embedded in networks and thus shaped by social institutions. It does not, however, show how different types of firm are embedded in different ways. A formal framework is thus developed, setting out the external context and internal resources that shape small firms’ behaviour. The framework is illustrated with empirical examples, and a research programme is outlined.

Family involvement in small, local nongovernmental organizations

“…Studies suggest that family relations are often replicated in organizational hierarchies and structures (Ram and Holliday, 1993;Hoy and Verser, 1994;Edwards, Ram, Sen Gupta, and Tsai, 2006). This can result in the replication of paternalistic relations in the organization; management exercises control over employees/family members, who in turn are able to negotiate better working conditions-a form of "negotiated paternalism" (Ram and Holliday, 1993).…”

High performance work practices in small firms: a resource-poverty and strategic decision-making perspective

“…The impact of the entrepreneur's bestpractice awareness on employee reports of opportunity practices was especially evident in the somewhat larger organisations; in the smaller organisations, bestpractice awareness did not really influence the level of opportunity practices used (Hypothesis 3B). In our sample of micro-and small organisations, entrepreneurs of the somewhat larger firms could still use autocratic and centralised styles of decision-making (Edwards et al 2006). One of the most difficult steps for entrepreneurs is to delegate responsibilities to employees (Spreitzer and Mishra 1999).…”

“…Consequently, strategic choices about HPWPs are directly affected by an entrepreneur's knowledge and attitudes. Strategic choice refers to the process whereby the entrepreneur decides upon a specific course of action that is to be taken by the firm in response to the (competitive) environment, the available resources and the design of the structure, rules and routines of the organisation (Child 1997;Edwards et al 2006). Indeed, when asked, small firm entrepreneurs commonly indicate that they critically evaluate the introduction and use of HR practices against the situation and needs of their firm (Drummond and Stone 2007).…”

HRM in SMEs: homogeneity or heterogeneity? A study of Taiwanese high-tech firms

“…Research shows that the variation in the use of HR practices in SMEs can be explained by the interplay of the influences of internal structure and external environment (Kinnie et al, 1999;Wilkinson 1999;Bacon and Hoque 2005;Edwards, Ram, Sengupta and Tsai 2006). Internal structure influences include resources, size, ownership, sector, technology, workforce skills and the presence of HR professionals.…”