International Handbook of Entrepreneurship and HRM
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International Handbook of Entrepreneurship and HRM

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.
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Chapter 12: Paternalism and People Management in a Low-Tech Manufacturing Company

Jeff Hyman, Fraser Osborne and Sarah Jack


Jeff Hyman, Fraser Osborne and Sarah Jack Introduction Paternalism, an approach to management that extends back to the early days of industrialization, has rarely received good press. Reasons for this include the fact that little control is extended to employees over their working lives and indeed, in more extreme manifestations, employees may be expected to put their employer’s interests firmly in advance of their own. Benevolent paternalism, whilst offering a softer, more Dickensian model of behaviour, may be seen as manipulative and condescending to employees. Nevertheless many small business employers often act in paternalistic ways and the outcomes are not necessarily negative. In this chapter a case study of benevolent paternalism as it operates in a small company is presented and the positive behaviour reciprocated by employees suggests that under some conditions, benevolent paternalism may indeed offer some insights into effective management. This chapter therefore contributes to an understanding of the human resource (HR) aspect for building successful organizations. This is important as despite the volume of work that attempts to understand entrepreneurial behaviour, HR in small entrepreneurial ventures is frequently overlooked. Indeed, we know remarkably little about the dynamics of management and employee behaviour within small and growing entrepreneurial ventures. Reviewing North American literature, Ram and Edwards report that a search over the past ten years ‘produced no significant examples of research papers on behaviour in small firms’ (2003: p. 719). We do know that HRM practices have been found to become more formalized with...

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