Achieving Peak Performance
- New Horizons in Management series
Edited by Cary L. Cooper and Ronald J. Burke
Chapter 9: Addressing Personal and Family Transitions in Small Businesses: Effective Human Resource Management Practices
Kyle Fuschetti and Jeffrey M. Pollack INTRODUCTION As the global economy attempts to recover from one of the worst economic downturns in recent memory, some of the most pivotal players on the road to recovery might not be household names like General Electric, General Dynamics, or General Motors. Rather, with small businesses becoming more and more important to the global economy, it might be businesses with names such as Jim’s General Store that most aid the economic recovery. In fact, the growing importance of small and medium enterprises (SMEs) is a global trend that drives productivity, innovation, and employment growth in both developed as well as developing nations (e.g., Ayyagari et al., 2007; Van Praag & Versloot, 2007). However, though the importance and the prevalence of SMEs have increased, SMEs still face multiple obstacles. Globally, failure rates in SMEs within the first three years of operations range from roughly 30 percent to upwards of 50 percent (for an initial review and introduction to relevant controversies see Headd, 2003; Van Praag, 2003). Overall, though it is important for owners as well as stakeholders of SMEs to be aware of the high proportion of failure, it is more important to understand why high numbers of SMEs fail. Multiple categories of reasons exist that attempt to explain the general causes of business failures such as lack of planning and organization (e.g., insufficient business planning, lack of long-term outlook, inaccurate analysis of competitive environment, unrealistic expectations), lack of knowledge or experience (e.g., lack of business...
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