Entrepreneurial Finance and HRM Practices in Small Firms

As new ventures grow, they face significant challenges to their internal operations and organizational structure. These challenges are particularly evident in small, entrepreneurial firms, who have limited resources, under‐developed capabilities and often seek funding from external investors to enab...

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Bibliographic Details
Published inBritish journal of management Vol. 33; no. 1; pp. 327 - 345
Main Authors Di Pietro, Francesca, Monaghan, Sinéad, O'Hagan‐Luff, Martha
Format Journal Article
LanguageEnglish
Published London Blackwell Publishing Ltd 01.01.2022
Subjects
Agribusiness
Change agents
Companies
Competitive advantage
Entrepreneurial finance
Finance
Human resource management
Human resources
Human resources management
Organizational performance
Organizational structure
Small business
Ventures
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Summary:As new ventures grow, they face significant challenges to their internal operations and organizational structure. These challenges are particularly evident in small, entrepreneurial firms, who have limited resources, under‐developed capabilities and often seek funding from external investors to enable growth. We draw on institutional theory, particularly institutional logics, to explore the role of different investors on human resource management (HRM) in small, entrepreneurial firms. Using qualitative multiple‐case study analysis of seven firms within the Irish agrifood industry, our study shows how external investors can prompt changes to HRM, illustrating three approaches to HRM practice: operational – aimed at improving efficiency and internal functioning through human resources; strategic – aimed at improving firm performance and competitive advantage; and transformational – leading to a fundamental redirection of the firm. These findings facilitate the development of a framework for how investor logic prompts changes to HRM practices of small, entrepreneurial firms. By examining the interaction of institutional logics, this paper contributes a more nuanced understanding of entrepreneurial finance and its implications on HRM practices in small, entrepreneurial firms.
Bibliography:We are indebted to the participants at the BJM Workshop in Honour of Mike Wright for their insightful comments. We are also grateful for the constructive comments provided by the editor and reviewer. The authors wish to thank all participating institutions and organizations. Responsibility for any remaining errors is solely our own.
Correction added on 24 May 2021, after first online publication: Copyright line and funding details have been updated in this version.
ISSN:1045-3172
1467-8551
DOI:10.1111/1467-8551.12493