INTRODUCTION 1.1 Introduction Small and medium-sized enterprises (SMEs) have been identified as one of the growth engines for various countries in the world, since SMEs make up over 90 percent of all enterprises. For instance, United States, 99.7 per cent (Heneman, Tansky, & Camp, 2000), China, 99 per cent (Cunningham & Rowley, 2008), Europe, 99 per cent (Andreas Rauch & Frese, 2000), Holland, 95 per cent, Philippines, 95 per cent and Taiwan, 96.5 per cent (C. Y.-Y. Lin, 1998) as well as Malaysia, 99.2 per cent (Man & Wafa, 2007; National SME Development Council (NSDC), 2009; Saleh & Ndubisi, 2006). The figures above show that countries all over the world recognized SMEs as a key business sector. Besides, Asia-Pacific Economic Cooperation (APEC) (2002) pointed out that SMEs are deemed as a supporter to larger enterprises as well as an important foundation in expanding business activities and sustaining economic growth. SMEs even provide more jobs than large companies (APEC, 2002; Department of Statistics Malaysia (DOSM), 2007; NSDC, 2009). In sum, SMEs play a vital role and contribute to the economy and are likely to be increasingly important as the economy becomes more global. In Malaysia, SMEs are considered as the backbone of industrial development (NSDC, 2009) and give meaningful contributions to the national economy. Hashim (2010) stated that SMEs play a significant role in generating more employment, economic outputs, income generation, export capabilities, training, encouraging competition, innovation and promoting entrepreneurship and supporting the large-scale industries (LSIs) as well. Moreover, Jaswant Singh, Malaysian Industrial Development Authority director in Australia (MIDA Australia), informed that the grow... ... middle of paper ... ...t improve efficiency and effectiveness (J. Barney, 1991; Wernerfelt, 1984). However, in examining other variables, researchers found a significant relationship between HRM practices (Jimenez-Jimenez & Sanz-Valle, 2008; Nasution, Mavondo, Matanda, & Ndubisi, 2010) and EO (Nasution et al., 2010) towards organizational innovation. Other studies also found that there is an inconclusive result on the relationship between organizational innovation and organizational performance (Rosenbusch, Brinckmann, & Bausch, 2010). These findings propose that potential researchers could study the mediating effect of organizational innovation on the relationship between HRM practices, EO and organizational performance. It is also suggesting that, there also have a moderator effect (managerial ties) on the relationship between organizational innovation and organizational performance.
Wolfe, R., Wright, P. M., & Smart, D. L. (2006). Radical HRM Innovation And Competitive Advantage: TheMoneyball Story. Human Resource Management, 45(1), 111-145.
The Small Business Administration (SBA). In July of 1953, the United States Congress amended an act called the Small Business Act. Many believe that the essence of the American economic system of private enterprise is free competition. Also, that only through full and free competition can free markets, free entry into business, and opportunities for expression and growth of personal initiative and individual judgment can be assured.
0 Ming-Yih Yeh, 2000, Enhanceing SMEs' Competitive Advantages: Using A Complete Set of Industrial Improvement Policies, Department of Business Administration At National Taiwan University of Science and Technology http://www.sbaer.uca.edu/Research.
Jiang, K.F., Lepak, D. P., Jia, J., and Baer, J. C. 2012. “How does human resource management influence organizational outcomes? A meta-analytic investigation of mediating mechanisms.” Academy of Management Journal, 55, pp.1264-1294
In conclusion, a precise and more appropriate definition that reflects the size, the nature and needs of SMEs is essential and advantageous not only for a particular SME itself, but also for policy makers and supporting agencies in planning and nurturing the proper growth and development of the SMEs sector in Malaysia as a whole.
It seems that HRM is so crucial to the organization, for what it does has nearly covered all aspects of the business – from strategic planning to the training and development, but unfortunately, its importance has not been accepted by everyone. As proposed by Morton, C, Newall, A. & Sparkes, J. (2001) there are three different views of HR function within the...
Walker, R. M., Damanpour, F., & Devece, C. A. (2011). Management Innovation and Organizational Performance: The Mediating Effect of Performance Management. Journal of Public Administration Research & Theory, 21(2), 367-386. Retrieved from EBSCOhost.
The third stage in HRM development which began in the late 1970?s and early 1980?s was the realisation that effective HRM could give an organisation competitive advantage. Within this stage HRM is viewed as important for both strategy formulation and implementation. For example 3M?s noted scientists enable the company to pursue a differentiation strategy based on innovative products. At the competitive stage, then, human resources are considered explicitly in conjunction with
Sels, L., De Winne, S., Maes, J., Delmotte, J., Faems, D., & Forrier, A. (2006). Unravelling the HRM–Performance Link: Value‐Creating and Cost‐Increasing Effects of Small Business HRM*. Journal of Management Studies, 43(2), 319-342.
This paper will attempt to give a broad overview from the available literature within three areas. First, the paper will explore the historical relationships of HR and organizational strategy. Second, the paper will give an overview of current practices and trends. Lastly,...
Within every major economy, a great factor in providing the energy of the core of the nations economy is the small and medium enterprises. These cluster of firms are what provide new economic activity, new innovative products and services, along with growing employment and in general a crucial system in ensuring the economy is at a stable growth level. With a majority of this activity stemming from family controlled or managed businesses, the focus on developing a global and long term perspective for these firms are ever growing in importance because of the global perspective entrepreneurship has started to take.
Human Resources Management (HRM) Interventions relates to the idea of improving an organizations overall performance and efficiency by improving the members (individuals and groups) performances, commitment, and flexibility. According to Beer et al. (1984), this is often a relevant intervention technique when organizations are facing increased international competition. They see the value of HR investments as a way to improve organizations competitive advantages. Further, they establish that HRM policies have long-term consequences and immediate organizational outcomes. These policies should include the overall competence of employees, the commitment of employees, the cost effectiveness of HRM practices,
Human Resource Management (HRM) is fundamentally another name for personnel management. It is the process of making sure the employees are as creative as they can be. HRM is a way of grouping the range of activities associated with managing people that are variously categorised under employee relations, industrial/labour relations, personnel management and organisational behaviour. Many academic departments where research and teaching in all these areas take place have adopted the title department of human resources management. HRM is a coordinated approach to managing people that seeks to integrate the various personnel activates so that they are compatible with each other. Therefore the key areas of employee resourcing, employee development, employee reward and employee involvement are considered to be interrelated. Policy-making and procedures in one of these areas will have an impact on other areas, therefore human resources management is an approach that takes a holistic view and considers how various areas can be integrated.
Small businesses have been considered the mainstay in countries around the world. In many European countries for example, the small business has been considered crucial to the success and flourishment of the country in general. Most individuals start upon a small business venture in the hopes of realizing ownership, independent profits and personal success. Small businesses can prove extremely successful when planned properly. Studies suggest that several small businesses, however, close or fail within the first few years of operation. This failure suggests that a majority of small business owners may not have as yet realized the crucial success factors necessary for successful implementation of a small business.
Small, medium enterprises (SMEs) are largest types business in the world, making up an estimated 99.7% of business. According to the Federation of Small Businesses (FSB) there are nearly five million existing businesses in the UK as of 2013. SMEs are a key contributor towards economic growth in terms of creating more employment, stimulating innovation and promoting social unity. SMEs are responsible for 47% of private sector employment, yet despite such global present there is still no agreed definition of a SME (Storey 1994). Bolton (1971) attempted to define them through a statistical and economic analysis. Classifications which are based on criteria, such as number of employees or annual turnover, however, do not remain consistent across borders. Given their size, smaller companies tend to be more intent on survival rather than expansion and profit maximisation. Smaller sized firms have always felt that the current reporting framework for IFRS is tailored more for the needs of larger companies and that the heavy cost burden it imposes upon them may not be entirely justified. In response to these concerns, the IASB subsequently issued the IFRS for Small and Medium-sized Entities (IFRS for SMEs) in July 2009. This standard offers an alternative framework which can be adopted by entities in place of the already extant full set of IFRSs or local national requirement standards.(Holt 2010) This essay will critically evaluate the impact of the IFRS for SME’s and whether or not it stands as the most suitable framework available for SMEs to use.