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Chapter 8: Human Resource Strategies of High-Growth Entrepreneurial Firms
8 Human resource strategies of high-growth entrepreneurial ﬁrms Robert L. Heneman, Judith W. Tansky and S. Michael Camp Introduction High growth is often a strategic objective of entrepreneurial ﬁrms. It has been related to a variety of measures of business success including survival, market share, proﬁt and net worth. For example in Cox and Camp’s (1999) survey of 672 ﬁrms considered as leaders in entrepreneurial achievement, the following were reported: ● ● ● ● averaging 10 per cent growth per year doubles the chance of ﬁrm survival; high-growth ﬁrms have relative gains in market share ﬁve times greater than low-growth ﬁrms; the level of proﬁtability for high-growth ﬁrms is 25 per cent more than for low-growth ﬁrms; and net worth for high-growth companies grows three times faster than that for low-growth ﬁrms. Given these impressive ﬁgures, it is not surprising that many studies have been conducted on factors related to the growth of entrepreneurial ﬁrms (Whyte, 1998). In addition, many models of various growth stages have been developed (Hanks et al., 1993). What is surprising, however, is the lack of study regarding the management of human resources (HR) in highgrowth entrepreneurial ﬁrms (Heneman and Tansky, 2003). Many years ago Penrose (1959) stated that, ‘All the evidence indicates that the growth of a ﬁrm is connected with attempts of a particular group of human beings to do something; nothing is gained and much is lost if this fact is not explicitly recognized’ (p. 2). With high growth comes the need for additional employees...
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