The curious case of human resource development in family‐small‐to‐medium sized enterprises

• Author: Michael J. Mustafa,Carole Elliott
• DOI: http://doi.org/10.1002/hrdq.21370
• Published date: 01 September 2019
• Date: 01 September 2019

EDITORIAL

The curious case of human resource development

in family-small-to-medium sized enterprises

1|INTRODUCTION

Activities that help develop an organization's competitive advantage (Aguinis & Kraiger, 2009; Noe, Clarke, & Klein,

2014), that is how an organization's idiosyncratic attributes impact on its competitive position (Barney, 1991)

through continuous learning, have attracted considerable attention from scholars, commentators, and policy makers

alike. Often termed as Human Resource Development (HRD), such activities and practices focus on enhancing the

quality of an organization's most important resource, its human capital (Aragón-Sánchez, Barba-Aragón, & Sanz-Valle,

2003). Currently, dominant theorizing regarding HRD stems from the experiences of atypical (large) enterprises

(Iles & Yolles, 2004). However, HRD is not solely confined to such efforts and is in fact present throughout a wide

variety of organizational forms (Hubner & Baum, 2018; Matlay, 2002; Nolan & Garavan, 2016). One type of organi-

zational form that is increasingly attracting scholarly attention with regard to HRD is that of small-to-medium sized

enterprises (SMEs) (Gray & Short, 2017). Comprising nearly 85% of global enterprises' activity, not only do SMEs

provide the lion's share of employment in some countries (Muller et al., 2015), they also comprise significant con-

texts in which investments in the enhancement of human capital are made on a regular basis (Gray & Short, 2017).

HRD in SMEs should not be assumed to be scaled down versions of HRD activities and practices in larger enter-

prises (Lai, Saridakis, Blackburn, & Johnstone, 2016). In fact, fundamental differences between SMEs and larger

enterprises with respect to strategy, structure, and resource endowments (Josefy, Kuban, Ireland, & Hitt, 2015)

suggest that HRD in SMEs is often informal in nature (Kotey & Sheridan, 2004), occurs largely through an employee's

job (Geldenhuys & Cilliers, 2012; Matlay, 2005), and is largely driven by the ideology and goals of the owner-

managers (Coetzer, Wallo, & Kock, 2019; Koch & de Kok, 1999; Matlay, 2002; Saru, 2007). We largely agree with

Gray and Short's (2018) recent call to pay greater attention to the issue of HRD in SMEs, and echo their call to recog-

nize and better account for the significant heterogeneity among SMEs. Nevertheless, one observable difference

among SMEs themselves, which can influence HRD-related decisions, is that of governance structures and

approaches to management.

Differences in governance and management types and structures may be particularly observable among family

and nonfamily SMEs. Family involvement in ownership and management is a common feature of many business

organizations worldwide (Astrachan & Shanker, 2003), with research showing family firms to be the dominant organi-

zational form throughout many economies and industries (La Porta, Lopez-de-Silanes, Shleifer, & Vishny, 1999;

Shleifer & Vishny, 1986) as well as a significant portion of SMEs globally (International Family Enterprise Research

Academy, 2003). Similar to other organizational forms, HRD may serve as a critical vehicle and mechanism through

which family-SMEs can achieve their twin objectives of continuity and competitiveness (Handler & Kram, 1988).

However, the overlap between the family and the business systems that is common in family-SMEs can create

unique authority structures, incentive systems, and accountability norms (Carney, 2005) as well as economic and

noneconomic goals (Gomez-Mejia, Makri, & Kintana, 2010). This can lead to unique peculiarities with respect to their

approaches and priorities toward HRD. Despite the fact that human capital enhancement is central to such firms and

DOI: 10.1002/hrdq.21370

© 2019 Wiley Periodicals, Inc.

Human Resource Development Quarterly. 2019;30:281–290. wileyonlinelibrary.com/journal/hrdq 281