Human Resource Management Practices in Irish High-Tech Start-Up Firms
Keating, Mary A., Olivares, Mariabrise, Irish Journal of Management
Human resource management and entrepreneurial research have rarely been combined, with little clear literature in the area of human resource management in entrepreneurial firms. Meanwhile, the sustainable growth and viability of emerging high-tech firms is critical to the well-being of the Irish economy. This paper reports on the results of an empirical study on the organisation-building aspect of entrepreneurial firms, specifically the human resource practices within Irish high-tech start-ups. The research findings are benchmarked with findings from the Stanford Project on Emerging Companies (Baron and Hannan, 2002).
Key Words: Entrepreneurship; Human Resource Management; Empirical Research; Irish High-Tech Companies.
This paper reports on the human resource practices (HRPs) within Irish high-tech start-ups (IHTSUs) as human resource management (HRM) research within an entrepreneurial context is an emerging area of academic research. This can be explained by the fact that small and emerging firms rarely have the financial and managerial resources to support a human resource specialist and much of the management of people is informal and difficult to research. Current research literature on HRM in entrepreneurial firms 'appears to be rich in prescriptions, limited in sound descriptive surveys, and sparse in analytical research' (Heneman et al., 2000: 20). A further challenge to understanding HRM in entrepreneurial firms is the fact that entrepreneurial research itself is multidisciplinary and therefore quite fragmented. However, people-related issues are crucial to understanding the organisation of entrepreneurial firms in general and of knowledge intensive start-ups in particular. It is increasingly recognised that, although innovation might be the product of one brilliant mind, the process of design, production and distribution depends on the effective creation and management of a workforce.
Recently, there has been a focus in both Irish policy and in the media on the need to address managerial challenges to the growth and entry of entrepreneurial firms into international markets. Indeed, IHTSUs face particular managerial obstacles due to the size of the Irish market, which require them to internationalise at an early stage. A greater understanding of the HRM aspect of the organisational building process of IHTSUs could represent a constructive step forward in ensuring their growth and successful penetration of international markets. This paper focuses on understanding the entrepreneurial process, especially the management of people in emerging firms to ensure their sustainable growth. Secondly, the paper highlights the lack of overlap between the literatures of HRM and entrepreneurship pertaining to the management of people and concurs with the need for a more holistic approach to studying entrepreneurship. Finally, the findings of an empirical replication study are presented on HRPs within IHTSUs which are benchmarked briefly with findings from the SPEC: the Stanford Project on Emerging Companies (Burton, 1996; Baron and Hannan, 2002).
THE NEED FOR A STUDY OF HUMAN RESOURCE PRACTICES IN IRISH HIGH-TECH START-UPS
Entrepreneurship is presently transforming Irish business culture and therefore is an entity very worthy of study. Ireland is ranked second to Sweden in the number of entrepreneurs per head of population in Europe (Fitzsimons et al., 2004) and ranked sixth out of the twentynine OECD countries in terms of overall entrepreneurial propensity (McGovern and McGready, 2002). Indeed, 7.2 per cent of the country's population is now engaged in starting a new business and 4.8 per cent of the population partly or fully owns a business (Maher, 2002). Much of this entrepreneurial activity is clustered around high-tech-based industry (such as the software industry), but also in telecommunications, pharmaceuticals and electronics. However, the proportion of employment by Irish small- and medium-sized enterprises (SMEs) remains lower than the EU average. …