Academic journal article European Research Studies

Leaders Management and Personnel Controlling in SMEs

Academic journal article European Research Studies

Leaders Management and Personnel Controlling in SMEs

Article excerpt

1. Introduction

This article focuses mainly on personnel controlling aiming to monitor and evaluate the company's short-term and long-term targets directly related to human resources management. Human resources management is essential to the success of any company, including small and medium-sized companies. But their management is rather different from that of big companies. Small and medium-sized companies are not usually able to offer career benefits comparable to those of big companies. On the other hand, they can offer the possibility of real production values, not those invented by multinational parent companies, but those that are real and achievable. The quality of the individual employees in the company is the most important condition for the success of small companies, because the failure of individuals has immediate effects, unlike in big companies (HavHcek, 2011).

In comparing small firms with large ones, scholars present these key findings: (1) employees report the highest job quality in small firms, which decreases as the size of the firm increases; (2) workers in small workplaces owned by large firms report lower job quality than workers in comparably sized workplaces owned by small firms. (Storey, Saridakis, Sen-Gupta, Edwards, Blackburn, 2010).

Other scholars have suggested that adopting human resource management (HRM) practices can improve small firms' competitiveness, thus enhancing their legitimacy (e.g. Williamson, Cable, & Aldrich, 2002). Enhanced legitimacy enables small firms to attract more qualified employees, which increases labour productivity and allows the firm to better compete in the marketplace (Patel, Cardon, 2010).

The greatest competitive advantage of small and medium-sized companies in the coming years will not be products or financial or technological resources, but employees. The significant change in quality management and relative abundance of foreign capital, as well as the willingness of investors to allocate resources to interesting medium-sized companies will mean that crucial competitive advantage begins to move from the area of quality and price to the personnel level. People will decide, not money. The financial capital will become a consequence and a cause of the success of the individual companies. The companies will be in the hands of capable or less capable individuals or teams. The task of management is to create these teams and the task of the controlling will be to evaluate their actual contribution and performance (Havlicek, 2011).

A detailed business process management model is provided in Figure 1. The M-C model is the basis for all business activities and thus serves as a basis for understanding marketing management and controlling. 2 2

2. Strategic personnel controlling

Strategic controlling in the area of human resources management should focus mainly on optimizing the organizational architecture of the company and creating feedback in the selection of key employees, particularly in managerial positions.

[FIGURE 1 OMITTED]

2.1 Optimization of the organizational architecture of the company

Building organizational structures is not restricted only to projects and creation, but also to continuous monitoring of whether they are still beneficial for the company. The company changes in its lifecycle and if its organizational structure is not changed in time and with regard to the change of product segments and in particular with regard to its size and future financial participation, it may result in counterproductive and significant costs as well as communication, competence and responsibility failures. It is not unusual for a company to change its architecture linked to different competencies and forms of reporting even several times during its lifecycle. This may also be associated with changes in key positions of the company. One of the greatest dangers is adherence to the existing method of company or group organization, not because of the actual benefit for the company itself, but because it conforms to existing managers and employees. …

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