Thomas N. Garavan, Alma McCarthy, Juliet McMahon and Claire Gubbins
This chapter considers the influence of firm size, the generic business strategy of the firm, the firm’s human resource management (HRM) orientation and the espoused values of owner-managers, on management development activities in micro and small firms in Ireland. It is based on the results of a cross-sectional survey of firms that are members of the Small Firms Association of Ireland. It is well established that, since the early 1980s, significant growth of micro and small firms has occurred, in both Ireland and the United Kingdom. In Ireland, the statistics reveal an increase in the birth rate of new small firms; small firms, in particular, are a significant source of employment creation in the Irish economy. Evidence presented by the Irish government reveals that small and micro firms are an important component of the economy, in both economic growth and employment terms. Many reasons are identified to explain this increased significance. They include major technological changes, the contracting out of activities by large firms, downsizing by major multinationals and the emergence of the service economy (Shutt and Whittington 1987; Tung-Chun 2001).
A less positive picture also emerges in the small firms’ literature. The research evidence reveals that many small firms are lacking in dynamism, suffer from very high death rates and most significantly of all, invest proportionately less than their large firm competitors in management training and development (Marshall et al. 1995). It is well established that the quality of the owner-manager and the management team represent a vital component of micro and small firm success. Studies conducted by Wynarczyk et al. (1993) and Smith and Whittaker (1998) reveal that the quality of the management team will impact the development of the firm itself, its overall profitability and its longevity.