HR Management in the Small Business Term Paper

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Human Resources Management is a vitally important part of the business world. Indeed, the ability to manage employees can mean the success or failure a firm. For the purposes of this discussion, we will explore human resources management as it relates to small business. Throughout this discussion, we will focus on Issues such as the changing global workforce, corporate culture, management issues, information technology, and workforce diversity.

Changing Global workforce

According to a journal article found in the Journal of Business Strategies explains that HR management strategies must change to fit the changes in the global workforce (McWilliams et al. 2001). The article asserts that companies are focusing more on maintaining the competitive advantage in the global workforce (McWilliams et al. 2001). The article reports that companies are increasingly opening international offices and must learn how to manage human resources accordingly (McWilliams et al. 2001). The authors assert

One of the keys to successful competition in the global market is the effective deployment of human resources to achieve a competitive advantage. Much of the research on the role of human resources in global competitiveness has focused on management. The effectiveness of management techniques across cultures and the difficulties of adjustment both in the work place and in the social environment have been extensively examined (Black & Porter, 1991; Lee & Larwood, 1983; Mendenhall & Oddou, 1985; Tung, 1981). The role of the remainder of the firm's workforce in achieving competitive advantage in the global marketplace has received much less attention (McWilliams et al. 2001)."

According to another article found in International Labour Review the issue of globalization is particularly relevant in the hotel, tourism and catering sectors. Small businesses in these sectors are at somewhat of a disadvantage compared to their larger competitors. For instance, a privately owned hotel may have more difficulty offering the proper training to employees when compared with a hotel that is owned by a large international conglomerate.

The authors assert that it is difficult for companies to find and train skilled workers within these sectors. The article contends that it is difficult to stabilize the workforce in these sectors because the attraction and retention of employees is low. The authors also assert, "Particular emphasis is put on new forms of management entailing new skills requirements, with a general tendency towards increased worker responsibility in an environment of flat hierarchies, multi-skilling and teamwork (Human resources development...2001)."

Corporate Culture/Social setting in the workplace book entitled Organizational Politics, Justice, and Support: Managing the Social Climate of the Workplace, explains that the social environment in the workplace can have a profound impact upon human resources management. The article asserts that this is particularly true in small business because employees and managers work in very close surroundings. The authors present an example of an entrepreneur who has just invented a new kind of stereo speaker.

This new invention develops into a small business with different a set of human resource issues that must be addressed (Cropanzano and Michelle 1996). The article asserts that one of the main HR challenges in this situation the entrepreneur must quickly adapt to meeting the needs of employees. "The entrepreneur, now the owner of a successful small business, still has the goal of a better speaker. However, as a means to achieving that goal she must also attend to the well-being of her employees. The employees, on the other hand, have a goal of enhancing their well-being, perhaps through higher pay and better benefits (Cropanzano and Michelle 1996)."

The article explains that in a quest to create a higher quality product there will tend to be infighting between the different groups of employees. For instance, those in marketing may have an alliance with those in finance and people in the manufacturing of the product may have their own interests (Cropanzano and Michelle 1996). This scenario creates a very political environment in the workplace.

With this being said, it is safe to assume that businesses must create a social environment/culture that is conducive to the well-being of employees and the development of good products (Cropanzano and Michelle 1996). Managers must be able to produce an atmosphere that does not lend itself to politics and infighting. All employees must understand that their jobs are important and that all the employees are working together to achieve the same goals. One way of accomplishing this is to set aside time for weekly meetings, which will give the manager insight into the thought processes of employees. These meetings will also allow managers to clarify tasks and settle disputes.

Information Technology

In addition to globalization and the culture of an organization, information technology also plays a large role in human resources management as it relates to small business. Information technology is important because it allows for the training of employees simultaneously.

Software and online courses allow people to advance in their careers by learning new skills.

An article in the Washington Time reports that workers are coming into the workplace with a large amount of technological ability. The author insists that human resource managers are desperate for employees that have technological expertise. The article contends "Techniques include lavish professional fairs, expensive temp-to-perm hires, outsourced recruiting to professional finders and steep bonuses for employees who refer hires. One company even went as far as planting decoys in local bars to pinpoint unhappy employees and steal them away from competitors (Fuertes 1998)."

Indeed, both the ability to use technology to train workers and the technological skills of workers has played a major role in human resources in today's small businesses. These factors have led to the expansion and increased efficiency of many firms throughout the world. Although the demand for some information technology experts has declined considerably, employees and businesses still understand that technology plays a significant role in the management of human resources.


As the world becomes more global and immigrants keep coming to America and the rest of the West, diversity will become an even greater issue. The official website of the Society for Human Resource explains that diversity includes attributes such as work style and personality ("How Should My Organization Define Diversity, 2004). Diversity also refers to more obvious differences such as; age, race, religion, work experience and level of education ("How Should My Organization Define Diversity, 2004). The website explains that diversity is an important component to have in the workplace, because it provides workers with the ability to work with and empathize with people come from different backgrounds.

The website also asserts that issues of diversity can also be the source of great conflict in a small business or in a business of any size ("How Should My Organization Define Diversity, 2004). The website contends that these conflicts usually arise as a result of differences related to work experience, education levels and socioeconomic status ("How Should My Organization Define Diversity, 2004). The article explains that the diffusion of such conflicts is dependent upon the HR manager and their ability to understand how to communicate with people who are extremely different from one another.

Another article on the website asserts that diversity training is one way that managers can learn how to communicate effectively (Diversity Training 2004). The article asserts that many companies are turning to diversity training to train senior managers how to deal with workplace diversity (Diversity Training 2004). The article contends that diversity training is not a cure all for the issues of diversity that a business may face (Diversity Training 2004). Instead, diversity training should be coupled with a diversity initiative (Diversity Training 2004). A diversity initiative is both a plan and a statement that defines what diversity means to the company and the reason why the company values diversity. The website gives an example of the diversity initiative of Microsoft. An excerpt from…[continue]

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