ADOPTING HRM PRACTICES AND THEIR EFFECTIVENESS IN SMALL FIRMS FACING PRODUCT-MARKET COMPETITION

Small firms face many challenges in creating a productive workforce given often severe resource constraints and informal organizational structures. This may be particularly problematic in industries with intense product-market competition. In this study, we focus on the relationship between product-market competition and labor productivity, particularly as influenced by both adopting human resource management (HRM) practices and having a group culture within the organization. We examine our model using data from 145 UK-based small- and medium-sized enterprises. Our findings suggest that having a group culture is a key factor in the extent to which HRM practices are adopted, as well as how effective adopting these practices is for increasing labor productivity. (C) 2010 Wiley Periodicals, Inc.