Abstract
Managing People in Small and Medium Enterprises in Turbulent Contexts provides a valuable focus in its study of small and medium-sized enterprise (SME) HR practices in different international contexts. The authors are Human Resource Management (HRM) scholars and HRM provides the focal point for their analysis of a wide review of the relevant international evidence derived from their own research, the existing literature and other secondary data. This range of sources is utilised to explore HRM in SMEs in a variety of contexts, all of which can be considered to be turbulent in terms of experiencing high levels of uncertainty, volatility and structural change.
After a brief introduction that defines terms and establishes the centrality of SMEs to a variety of economies, the second chapter sets out the distinctive context of HRM in SMEs. This is important in order to address the still prevalent tendency to treat SME HR practices as simply scaled-down versions of the practices studied in large businesses or to ignore the distinctive characteristics and contexts shared by many SMEs. However, at points in their analysis, the authors do still consider SME practices in relation to large firms in terms of a deficit (i.e. where SMEs differ from large firm practices this represents a deficiency). It would have been interesting to add to this perspective through more detailed consideration of the ways in which informal, ad hoc or functionally equivalent practices are those best suited to smaller businesses, especially in uncertain, volatile contexts.
The next three chapters analyse what the authors characterise as emerging market economies in Asia and the Pacific, Africa and Latin America. The analysis identifies the increasing adoption of more formal HRM practices, especially in China. These processes of ‘formalisation’ are shaped (and sometimes constrained) by historical, cultural and institutional factors. For example, in countries such as Taiwan, the prominence of family businesses is suggested as an important factor in the use of more informal practices. The authors also identify the influence of western assumptions around best business practice and, in some of the countries discussed (e.g. Ghana and Vietnam), government intervention actively promotes approaches to HRM derived from large company best practice.
Chapter 6 analyses the transition economies of Central and Eastern Europe. In these countries, the transition from centrally planned economies to capitalist free markets has created opportunities for SMEs. However, it has also created challenges, especially in terms of the competitive pressures from large multinationals. The analysis identifies significant informality, which is attributed to the centrality of owner-managers. The authors argue that these firms formalise their approaches to HRM as they grow or seek to enter foreign markets.
The final analysis chapter (Chapter 7) looks at the crisis contexts in Southern Europe and the wide-reaching impacts of the financial crisis, which has created a ‘trust gap’ between different stakeholders (p. 106). The analysis identifies the struggles for survival faced by SMEs in turbulent, challenging contexts. Weak financial structures, limited access to finance and an inability to diversify are found to have limited the resilience of these businesses. As a result, the authors identify a pattern of work intensification and job insecurity that has led to reduced productivity and poor employee engagement.
The book concludes by developing a conceptual model of HRM that highlights the factors affecting HRM application in turbulent national contexts. At this point, the importance of national cultural differences, for example relating to power-distance, is also highlighted. Overall, the studies of SME HR practices reviewed in the book appear to suggest that smaller businesses are fairly consistent in preferring informal approaches to activities such as recruitment or training, despite pressures to conform to widely disseminated large firm best practices. The authors suggest that this changes as firms grow and begin to ‘formalise’. However, the authors stress the importance of SME heterogeneity and the particular forces at work in certain industries that can complicate these patterns of behaviour and preference. They conclude that SME owner-managers should develop practices appropriate to their context and in relation to what the authors refer to as the ‘formality-informality continuum’ (p. 130).
The key strength of this book is its scope, the range of countries and contexts that the authors discuss, which supports a vital contribution to our understanding of HR practices in SMEs. However, the trade-off for this impressive scope is a lack of depth in the analysis, the sheer number of countries included limiting the detailed analysis that can be supported. This can be seen, for example, in the exploration of the relationship between informality and formality and the formalisation processes discussed, which could be explored in much greater, contextualised detail. In some of the regions reviewed, there is a lack of robust evidence available (e.g. meaning that, in Latin America, the book considers only Chile and Colombia) or the data reviewed is partial, which also limits the depth of analysis. Nonetheless, this remains an interesting and important book that effectively makes the case for further examination of context-specific studies of HRM in SMEs and the limits of Western models of best practice.