HRM in Family Firms - Research Proposal Example

Management Research and Consultancy What is the setting for this study (background and context)? Comment critically on the research posed in the project. The present study is devoted to the analysis of the Human Resource Management (HRM) in relation to small and medium firms (SME), as well as family and non-family businesses. The background of the research lies in the fact, that first of all, family business is the most widely spread kind of business in the United Kingdom. In addition, family business usually involves different kinds of human relations, as the relations between family members are distinct from those, between the manager and the worker, who are not relatives. It might be stated, that there has appeared urgent necessity for making deeper research in terms of HRM in family business, and it had to be done already with the development of this kind of business in the country and in the world. The present research is aimed at comparing the HRM patterns in family and non-family business, and to be objective, I should agree, that it is important to clarify the differences in these patterns, but it should have been better to concentrate first on investigating family businesses only, as they display the variety of HRM behaviours and need management training. It is obvious, that the patterns of HRM in family and non-family business are different, thus it should have been better to find the differences in HRM patterns between different family businesses, to outline the major factors that influence these behaviour and the ways of making these behaviours work for businesses of small and medium companies. The work notes, that the terms HRM is at times used in the wrong way, to replace the famous term of Public Management. But it should be remembered that HRM is somewhat different sphere of research, than the PM is. So, as the work is concentrated at comparing the HRM patterns of different kinds of small and medium enterprises, less attention is paid to family business itself, as a bright example of unusual and unique human relations inside each enterprise. At the same time, the present research is an attempt to satisfy the urgent need for studying the HRM processes in the small and medium firms; as such research has always been made for large corporations. The importance of HRM in each firm, either large, or small, is not argued. It is one of the principal ways for the development and progress of any organization. 2. Evaluate the literature review and the way that the researchers have used it to set research questions and design of the project. The research is based on a big number of literary works, relating to human resource practices and family business as the economic phenomenon. There is no argument about the fact, that it is easier to manage in the smaller environment, and the research relates to the works of Storey and Guest (1987), which suggest, that the key concepts of any human resource management are high flexibility, high quality, high integration and high commitment, but Guest’s book was written for the big companies, and thus it is rather ambiguous, whether his ideas are applicable to the smaller business; this issue needs further research. On the contrary, the Storey’s ideas as for the important role of communication and logic are very relevant for small family business, as the communication in any human relations plays one of the first, if not the first, role. The literature, chosen for the research, is seldom devoted to HRM in small firms, as this discussion has always lacked attention and interest, though it is understood, that the prosperity of small firms, and successful HRM, as a considerable part of this prosperity, is the main stimulation for the overall economic growth. (Dundon, 2001) The authors, who have devoted their time and books to the HRM, never really concentrated on the smaller and medium business, simply outlining the necessity for such research, without going deeper into the subject. (Legge, 1995; Bach and Sisson, 2000; bacon, 1996; Creagh et al., 2000) Such authors as Ward (1987), Leach (1994), and Dunn (1995) argued about the necessity of family business’ research, as they supposed family business in UK to be in its infant stage of development. At the same time, these authors point out, that there are significant differences between the HRM patterns in family and non family business. The main theories, outlined in the research The main theories, mentioned in the research of HRM in family and non family business, may be outlined in the following way: Storey (1989) in his work ‘New Perspectives of Human Resource Management’, has suggested the idea that employees in any firm should be supposed to be valued assets, because employees may easily serve as the source of competitive advantage. Ulrich and Lake (1990) supported this theory of ‘resourceful humans’, making it clear, that it is crucial to achieve the competitive edge out of improving the internal organization and capabilities of employees. On the other hand, Edwards (1987) suggests the further research into the role of specialist managers in family business. According to his research, managers in family business are rarely involved into strategic planning of the enterprise, and the percentage of the family businesses, which hire specialist managers, is drastically small. Atkinson and Meager (1991) were able to find out, that many family companies prefer ‘in-house’ training and personnel practices. As the continuation of this theory, Huselid (1995) expressed the assertion, that the companies, which used specialist managers in their work, displayed higher profits and higher growth rates. All the described theories show the urgent need of research in the field of HRM in relation to family businesses. They also show the importance of hiring professional managers for creating HRM strategies at every firm, as the human resources of an enterprise are the force, which defines its growth and development. But to my mind, there should be outlined one more thought: to which extent family business should and is able to involve specialist managers into its in-house HRM strategy, and what should be done to decrease the costs for HRM management with the simultaneous growth of effectiveness for smaller and medium enterprises. 3. How appropriate is the methodology for this research? What could they have done differently? Comment on the ethical issues that have arisen or could have arisen with other methods (mainly the present). It is important to see, what methods have been used to carry out the research, and whether these methods fully lead to the set goals. The research was aimed at reaching two main purposes: to define, which practices are usually used in small and medium enterprises, and to compare the most common practices between family and non-family businesses. The method used in the research, was that of CRANET Survey of International Strategic HRM, and was performed through a large-scale postal poll of about 1300 enterprises, which are considered to be small or medium, having from 20 to 100 employees in the staff. The database for searching the necessary enterprises was received from the Equality Commission. Some critics should be given to the method, which was chosen for collecting data and performing the whole research. According, to the article data, the 1,360 questionnaires have been sent to different small and medium firms in Northern Ireland, and only 230 responses have been received, among which only 219 were usable. The method of surveys and questionnaires, of course, has its advantages. The main advantage is that it is anonymous and inexpensive. In addition, it allows getting lots of data for the research, making it possible to easily compare the received information. But the main disadvantage of this method of management research is that it rarely gets enough feedback. It is seen, that only 16 percent of the questionnaires were responded by the firms. Such method does not also give the full picture and story of the firm, and might need further sampling. In case with HRM research in relation to non-family business, more depth, than breadth is needed. Thus, it should have been more suitable to use the method of a case study. The main general aim of the case study is to understand and describe the experiences and programs of the specific firms (clients) and make cross comparison of their management situations. Though this method is time consuming, and at times it is difficult to organize all the information available, it is the best way to depict and compare the experiences of specific clients, making the research narrower and deeper. In this very case, it should have been more productive and effective to take two firms from each group, that is, family and non-family, and to analyze in depth their in-house HRM strategies. Such choice would have allowed making the existing generalized information more specific in relation to the subject, thus proving or denying probable suggestions and ideas. The main ethical issues that have arisen in the context of the present method used, is that of subjectively deciding, whether it has been right or wrong, which is difficult to perform at times. In general, the ethical problems of management research lies in subjective deciding, which behaviours are right or wrong. In relation to the present survey, the post poll being anonymous might carry the main ethical lading. But breaking ethical issues and making the research methods deeper might make the ethical breaks smoother. The method chosen, gave the possibility to prove the general suggestions which had existed before and didnt need more specific research. 4. Analyze the conclusions drawn by the researchers. What did they find? Are the findings useful? First of all, it has been proved that directors in family businesses take longer control over their enterprises, that those of non-family business. And it is natural, as the owner of the family business is interested in having his own views and control over all processes taking place in his company. The second finding showed, that the labour costs in non-family business were higher than those of the family business. But this result was no more than the reflection of the general breakdown between family and non-family business in sectors. It was also found out, that family businesses lack the distinct separation of management and ownership, and these two notions are often being confused. Continuing this issue, family businesses rarely have their mission statement, being more concentrated on family issues, than on the overall management and payment problems. Among some other findings are those, showing the lack of managerial training in family businesses and the family businesses introverted nature. To be objective, these findings are very general and carry no specific information as it could have been with a case study. It obvious, that HRM practices in family and non-family business are different, but there has been given no attention to the discovery of whether these or those practices are successful or not. It is necessary not to forget about caution in interpreting the findings of the present research, as there are too many different factors, which have not been taken into account, for example, the size of the company or its area of business. Of course, the research states that family businesses need deeper application of HRM strategies in their daily work, but there should be suggested further research, relating to the definition of the most successful recommended HRM strategies for family and non-family businesses in SME sector. Read More