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International Handbook of Entrepreneurship and HRM

International Handbook of Entrepreneurship and HRM

Elgar original reference

Edited by Rowena Barrett and Susan Mayson

This invaluable reference tool has been designed in response to the growing recognition that too little is known about the intersection between entrepreneurship and human resource management. Paying particular attention to the ‘people’ side of venture emergence and development, it offers unique insights into the role that human resource management (HRM) plays in small and entrepreneurial firms.

Chapter 14: Human Resource Management in Small and Medium-Sized Enterprises in Jiangsu, China

Li Xue Cunningham and Chris Rowley

Subjects: business and management, entrepreneurship, human resource management


Li Xue Cunningham and Chris Rowley Introduction The purpose of this chapter is to explore the extent to which human resource management (HRM) practices are applied in small and mediumsized enterprises (SMEs) in China. There are several reasons for doing this beyond the importance of SMEs in the Chinese economy. SMEs have become vital as a source of employment and as contributors to the economy and structural reform. In 2002 for instance the number of registered SMEs in China was over 10 million (99 per cent of total enterprises) with their gross industrial output value, sales income, taxes and profits, and gross export volume representing around 60 per cent, 57 per cent, 40 per cent and 60 per cent respectively of the national totals (People’s Daily, 30 July 2002). SMEs also provided around 75 per cent of job opportunities for cities and towns, thus absorbing job seekers (People’s Daily, 30 July 2002). While helping to expand the scale of the market economy SMEs also contributed to the creation of a socialist market economic system as a whole. Most management systems in China, as an example, first began in SMEs and then became widespread (Fan, 2003). While the numbers of SMEs have increased, this has been in spite of a range of obstacles. Following China’s World Trade Organization (WTO) accession SMEs have faced intense market competition and in China’s South Eastern and coastal provinces, where many multinational companies (MNCs) are located, the pressures are considerably higher (Luo, 1999). SME survival...

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