High Performance Management Practices and Sustainability of SMEs. Evidence from Manufacturing and Services-based Industries in Pakistan

Abstract

Prior research on high performance management practices (HPMP) has primarily examined the relationship between HPMP and firm performance in the context of large organisations. However, this study examines the relationship between HPMP and Sustainability outcomes (firm performance) in small and medium-size enterprises (SMEs) and also within a specific cultural background which is under researched. This research study is related to both theory and practice. The main relevance lies in analyzing the relationship between HPMP and sustainability outcomes in SMEs. This research study relates to theory by applying the resource-based view and configurational approaches used in this study. The study employed a quantitative methodology. Data were collected through a self-administered survey questionnaire. The questionnaire was adopted from a previous validated survey measuring HPMP in Australian SMEs. The target population consisted of SMEs operating in the city of Karachi, Pakistan. Stratified random sampling was applied to collect data from two stratums i.e. manufacturing and service-sector SMEs. A total of 703 firms were selected, contacted by phone, and invited to participate in this survey. Of these firms, 357 SMEs (50.78 percent response rate) accepted the invitation to fill out the survey questionnaire. Most of the respondents who agreed requested that the researcher to visit their organizations personally. The data were analyzed by using Structural Equation Modeling techniques including exploratory factor analysis. The findings indicate a positive significant relationship between HPMP and sustainability outcomes. The link between these HPMP and the sustainability of SMEs demonstrates the value and importance of HPMP in achieving sustainability.