Achieving Peak Performance
New Horizons in Management series
Edited by Cary L. Cooper and Ronald J. Burke
Chapter 4: Alternative Systems of Human Resources Practices and Performance in Small Entrepreneurial Organizations
Christopher J. Collins Small businesses, defined as independent businesses with fewer than 500 employees, play an important role in our economy. It is estimated that there are over 23 million small businesses in the US making up over 99 percent of all US businesses, and small businesses employ 50 percent of all private sector employees (US Small Business Administration, 2004). Small, entrepreneurial firms are an important subset of small firms because they are frequently cited as being the key drivers of economic growth job creation (Shane & Venkataraman, 2000). Further, entrepreneurial firms play an essential role in creating new knowledge and converting knowledge into new products and services (Christensen, 1998; Shane & Venkataraman, 2000). Given the importance of these firms, it is important for researchers to understand how small, entrepreneurial businesses can improve their performance and increase their impact on the general economy. Following the definition of entrepreneurship provided by Shane and Venkataraman (2000), I define entrepreneurial organizations as those firms that create market opportunities through the discovery, evaluation, and exploitation of new goods and services. Inherent in this definition is the notion that firms may be on one end of the entrepreneurship spectrum or the other – that is, some will be in the exploration stage while others will be in the exploitation stage. Firms in the exploration stage are focused on creative processes around the discovery of new ideas and innovations; whereas, firms in the exploitation stage are focused on competitive advantage based on consistent execution of existing processes and incremental...
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