Whatever IT Takes: Exploring HRM and Leadership Practices in Emerging Market SMEs

Abstract

Recent reviews of the literature on human resource management (HRM) on small-and-medium enterprises (SMEs) highlight several gaps including the impact of owner-manager or leader’s philosophy of managing people in shaping HRM practices and on employee outcomes. This research addresses the above gaps and presents an in-depth qualitative case study analysis of two SMEs from India’s IT and healthcare products industry that are serving a range of global clients. Using the theoretical lenses of empowerment-focussed HRM practices, ambidextrous leaders, contextual ambidexterity and strategic agility, semi-structured interview data of leaders, managers and employees of the two case organizations were analysed. We abductively developed a novel conceptual framework that is at the intersection of the above theoretical lenses through a two-staged analytical process. Our findings suggest that the SME’s strategic agility, ambidexterity and empowerment-focussed HRM approach was influenced by the owner-manager or leader’s ambidextrous leadership style and their philosophy towards managing people and had a positive impact in creating a culture of trust, participation, risk-taking and openness, and led to delivering innovative products and services as well as several positive employee-level outcomes. Implications for theory and practice are also discussed.