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Human Resources, Financial Resources and Performance in Small Business

Westhead, Wright and Usbasaran (2001)resources - owner resources and owner
suggested that human and financial resourcescommitment. A significant positive
are those that need to be incorporated intocorrelation was found between the two
the research model, which they haddimensions and net cash flow. No correlation
constructed.has been found to the log of employment
growth. Westhead et al. (2001) findings
The small business' entrepreneur/owner is tosupport the hypothesis that, if the firm's
be emphasized as a resource of paramountfounder possesses a significant prior
importance. According to Story (1994), theknowledge of the industry, it is to be
entrepreneur's experience, expertise andexpected that the firm would register
abilities are generally considered a primaryprofitability beyond the means of its
parameter of influence over the firm'scompetitors. Premaratne (2001) indicates at a
survival and development. Mullins (1996)correlation between subsidies granted to the
claims that the entrepreneur'sfirm and increase in sales. However, he does
decision-making capacity strongly affectsnot support a correlation between subsidies
organizational processes that constitute theand profitability. Wiklund and Shepherd
foundation for competitive advantage as well(2005) have found a significant positive
as for growth. Rangone (1999) has defined thecorrelation between access to capital and
entrepreneur as a "unique" resource whichperformance. Pena (2004) examined the
supports  the  rest  of  the  resources.relationship between human resources
(education; management experience; prior
Several studies were conducted in order toentrepreneurial experience; entrepreneurs'
learn about the relationship between human orrelatives; implementation of ideas acquired
financial resources and small businessin previous workplaces) and increase in
performance. Cooper, Gimeno-Gascon and Wooprofit, increase in sales and increase in the
(1994) have found that human resources, andnumber of employees. A positive correlation
especially the owner's education, arewas found between education and the
correlated with growth. Moreover, knowledgeimplementation of ideas acquired in previous
of the industry and financial resourcesworkplaces, and an increase in the number of
contribute to growth as well as to the firm'semployees and in sales. Chrisman, Mcmullan
survival. According to Westhead (1995), theand Hall (2005) utilized education and prior
founder's experience affected performance andexperience as control variables. A
survival in hi-tech enterprises over a periodcorrelation was found between prior
of six years from the day of foundation.experience and an increase in the number of
Brush and Chaganti (1999) examined smallemployees and in sales. No such correlation
trade and service oriented businesses. Theirwith education was found.
study designates two dimensions of human



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