Employee Training in SME

7/29/2019 Employee Training in SME

http://slidepdf.com/reader/full/employee-training-in-sme 1/26



and Hughes 1998). Chandler and McEvoy (2000) argued that rms that invest inemployee training, engage in formal per-formance appraisal, and link these toincentive compensation are likely to havelower employee turnover, higher pro-ductivity, and enhanced nancial per-formance. Ibrahim and Ellis (2003)suggested that training would enhancethe survival rate of small rms and Reidand Harris (2002) noted that the mostsuccessful SMEs provide more employeetraining than average. Litz and Stewart(2000) established a link betweenemployee training and superior rm per-formance. In addition, small businessfailure has been linked to poor manage-ment skills (Lattimore et al. 1998;

Jennings and Beaver 1995). It is arguedthat management training should greatly improve SME survival and performance(English 2001; Lattimore et al. 1998).MacRae (1991) established that a major distinguishing factor between high-growth and low-growth small rms is theeducation, training, and experience of their senior managers.

Despite the professed importance of employee training to small business per-formance, this area has received littleattention in the literahiture (Reid and

Adams 2001; Loan-Clarke et al. 1999). The existing literature tends to focus onmanagement training (Heneman, Tansky,and Camp 2000) to the exclusion of other forms of employee training. Few

researchers have investigated the deter-minants of training in SMEs (Reid andHarris 2002; Loan-Clarke et al. 1999) andin all cases the dependent variable—training—was measured by a single vari-able, the training budget. Becauseinformal training is often not accountedfor in the rm’s books, the literaturetends to be biased toward formal train-ing. In addition to these gaps there is a

paucity of research on family businesses(Sharma 2004; Hoy 2003), particularly onissues pertaining to human resource

this paper, we examine the main andinteraction effects of two factors (sizeand type of rm—family and nonfamily)on a variety of training programs inSMEs. To date, research on the impact of size and/or type of rm on training hasinvestigated main effects only, ignoringhow differences in employee training

between family and nonfamily rms may vary with rm size. If indeed trainingdoes enhance performance of SMEs, thenthe ndings should be useful for formu-lating policies and designing programs inthis area.

DenitionsFamily Business

Researchers have suggested the use of multiple conditions to identify family from nonfamily rms (Litz 1995). Fre-quently used conditions include family ownership and control (Upton, Teal, andFelan 2001; Litz 1995), family inuencein decision-making (Sharma, Chrisman,and Chua 1997) family members asemployees (Department of Employment,

Work Relations, and Small Business[DEWRSB] 1998), and the intent to trans-fer the family rm to the next generation(Stewart 2003). Chua, Chrisman, andSharma (1999) asserted that the intentionto sustain the vision of the controllingfamily members across generations isimportant to identifying family from non-family rms. However, they added thatdominant family ownership and signi-

cant involvement of family members inmanagement of the rm is sufcient toensure that the vision of the family isshaped and pursued by the business. Inthis paper, respondents identied their rms as family or nonfamily. This desig-nation was corroborated by a number of criteria (ownership and control, decision-making, employment of family members,and business acquired from parents). In

addition, family ownership and family management were veried independ-ently The conditions used to identify



are consistent with those employed inthe literature (see for example Chua,Chrisman, and Chang 2004; Upton, Teal,and Felan 2001).

SMEs The denitions of small and medium

rms by the Australian Bureau of Statis-tics were adopted for this study. A smallrm was dened as employing between5 and 19 workers and a medium rm ashaving between 20 and 199 employees(DEWRSB 1998). Thus rms with 5–199employees were examined. Micro-rms(dened as employing up to four

workers) were excluded from the study because of their small employeenumbers and limited employee training(Kotey and Sheridan 2004). SMEs in thispaper thus comprise both family andnonfamily rms with 5–199 employees.

The paper is organized into ve sec-tions. The rst section provides a back-ground to the study and ends with thehypotheses to be tested. The secondsection describes the research methodsand the third presents the results of the analyses, which are discussed in thefourth section. The nal section covers thesummary and conclusions to the study.

Background Employee Training in SMEs

Despite the perceived importance of training to improved SME performance,there is a general reluctance among

SMEs to provide formal employee train-ing. Employee training in SMEs is oftendescribed as informal, unplanned, reac-tive, and short-term oriented (Hill andStewart 2000). Training in SMEs is mostly on-the-job with little or no provision for employee development (Loan-Clarke etal. 1999; Storey 1994; Marlow and Patton1993). MacMahon and Murphy (1999)noted that SMEs rarely carry out formal

training needs analysis and have no sys-tematic approach to training. A number of factors account for this preference for

First, owner–managers perceive formaltraining as an unaffordable luxury involv-ing not only course fees but also the costof lost output while employees are off-the-job (Curran et al. 1997; Westhead andStorey 1996). Second, small rms gener-ally have a short time horizon becausethey face high levels of uncertainty. Incontrast, benets from training tend to berealized in the long-term, which makesinvestment in employee training unat-tractive to small rms (Westhead andStorey 1996). Further, trained employeesare more likely to be lost to other employ-ers because of the relative lack of internalpromotion opportunities in SMEs. Fourth,

with a limited capacity to acquire infor-mation, small rms are usually less awareof both the training programs available tothem and their associated costs and ben-ets (Westhead and Storey 1996). Owner–managers argue that employee trainingresults in highly specialized staff, asopposed to the multiskilled workforcerequired to cope with the largely exiblenature of jobs in SMEs (MacMahon andMurphy 1999). Finally, the inability toestablish a direct positive link betweentraining and performance may de-motivate owner–managers from investingin this area (Storey 1994).

Informal training is preferred becauseit is less costly, can be easily integratedinto daily operations of the small rm,and is focused on employees’ specicneeds (Hill and Stewart 2000; Curran et al.

1997). Employees learn in the context in which their skills are used. They developskills for solving diverse problems withinthe rm, leading to the development of amultiskilled labor force more suited to theneeds of SMEs (Smith et al. 2002). Infor-mal training is thus often reactive to press-ing issues within the rm rather than tolong-term development of employees. It isconsistent with the overall strategic orien-

tation of SMEs—that is, informal and exible (Gibb 1997; Storey 1994).In spite of these seemingly legitimate



is argued that failure to provide adequateformal employee training retards devel-opment of sustained competitive advan-tages in SMEs (Stewart and McGoldrick1996; Garavan, Costine, and Heraty 1995).

The Impact of Firms’ Size and Family Dimension on Employee

Training in SMEs A closer analysis of SMEs reveals that

differences in attitude to training can beattributed to rm size and type of rm(family and nonfamily). Roberts, Saw-

bridge, and Bamber (1992) suggested thatthe limits of informality become apparentin rms with 20 or more employees, wheninformal styles of management arestretched. Jennings and Beaver (1997)noted that at this size the owner becomesoverextended and needs to delegateresponsibility to more professional man-agement. Thus at the lower end of the sizescale, where the owner–manager candirectly control work performance,employee training would be predomi-nantly on-the-job. Employees would betold what to do or their performance cor-rected on-the-job. However, more formaltraining programs would be adopted asrm size increases. Hornsby and Kuratko(1990), Loan-Clarke et al. (1999), andKotey and Slade (2005) reported thattraining is increasingly delegated to spe-cialists within and outside the rm as the

rm grows and that training becomesmore formal, structured, and orientedtoward developing employees for higher-level positions in growing rms (Mabey and Thomson 2001; Westhead and Storey 1997). Mabey and Thomson (2001) for example found that only 25 percent of rms with fewer than 100 employees hada budget for management developmentcompared with 49 percent for larger

rms. There is, however, a limit to whichemployee training would increase withrm size Kotey and Slade (2005) noted

employee training declined at the larger end of the size scale. Their ndings con-rmed those of Blau (1970) that as sizeexpands, specialization and formal proce-dures increase—at rst rapidly but thenmore and more slowly.

Another discriminating factor withrespect to employee training in SMEs istype of rm (family and nonfamily). It ispostulated that family rms are less likely than nonfamily SMEs to provide employ-ees with formal training (Loan-Clarke et al.1999;Martin and Staines 1994).Martin andStaines (1994) reported that family propri-etors placed more emphasis on technicalthan managerial skills, whereas thereverse was true for nonowner managers.Loan-Clarke et al. (1999) contended that

whereas nonowner managers often show a genuine interest in their employees’career progression, family proprietors feelthreatened if subordinates developedtheir managerial competence. They foundthat family rms were less likely to investin management training, and explainedthat even though family proprietors oftenlack condence in their abilities as man-agers, they are reluctant to give up per-sonal control and to delegate tasks toothers. Loan-Clarke et al. (1999) arguedthat competent nonfamily managers con-stitute a threat to less competent family proprietors. Because dominant family ownership and involvement in manage-ment are major differentiating factors

between family and nonfamily rms, it

would follow that formal employee train-ing would be lower in rms with greater family ownership and management thanin rms that are owned by outsiders andmanaged by nonowners.

Researchers who have analyzed theimpact of type of rm and rm size onemployee training examined the training

budget as the dependent variable (Reidand Harris 2002; Loan-Clarke et al. 1999).

A variety of training programs (in par-ticular, informal training programs suchas on the job training job rotation and



the training budget were not considered,as though skills and knowledge acquiredthrough these training programs are notrelevant. Hill and Stewart (2000) andSirmon and Hitt (2003) drew attention tothe importance of informal training toskill and knowledge acquisition in smallrms. This present research attempts toll the gap in the literature by examin-ing changes in a variety of training pro-grams across rm sizes and betweenfamily and nonfamily rms of varyingsizes.

Hypotheses Development—HRMand Employee Training in Family and Nonfamily SMEs

Researchers have established a posi-tive relationship between the effective-ness of training (Huang 2001) or expenditure on training (Reid and Harris2002) and the level of sophistication inthe HRM function. Thus, employee train-ing in family SMEs should be consistent

with their overall approach to humanresource management. The existing liter-ature tends to stereotype the employmentrelationship in family rms. At oneextreme is the rm with a “warm family atmosphere” where employees are madeto feel part of the family and work in aclose and harmonious relationship witheach other. The other extreme is a rmrun dictatorially by patriarchs whereemployees have little say in what happensto them. Employee training is likely to be

encouraged in the former but not thelatter. An important component of the “warm

family atmosphere” is the informalapproach to management (Reid and

Adams 2001; Astrachan and Kolenko1994; Daily and Dollinger 1993) whereefciency rather than growth is empha-sized as a performance goal (Donckelsand Frohlich 1991). Employees have easy

access to management (Kets de Vries1993). Kets de Vries (1993) noted that thefamily atmosphere provides employees a

to commit to achieving the business andfamily goals. The well-being of family members and employees take precedenceover short-term prot and growth goals(Gersick et al. 1997; Dunn 1995). Dyer (1988, 1986) drew attention to the pater-nalistic culture of family rms that empha-sizes trust, loyalty, and inclusiveness andSirmon and Hitt (2003) argued that theseattributes constitute unique resources thatare difcult to imitate. Donckels andFrohlich (1991) established that family rms paid more wages and cared moreabout their employees than nonfamily rms. Lyman (1991) found that family pro-prietors used a more personal approach,trusted their employees, and relied less onformal written policies. It could be arguedfrom this portrayal of concern for employ-ees’ well-being that family proprietors

would attend to their employees’ trainingand development needs. However, any such training is likely to be informal andon-the-job. Such tacit and informal knowl-edge transferred through direct exposureand experiences (Lane and Lubatkin 1998)provide employees of family rms deeper levels of rm-specic knowledge thanthose that occur in nonfamily rms(Sirmon and Hitt 2003).

The “patriarch” representation sug-gests that gains in employee performancearising from the “warm family atmos-phere” are eroded by conicts associated

with the family dimension. Kets de Vries(1993) noted that the at and accommo-

dating structure of the family rm often becomes complex as authority andresponsibilities are poorly dened. Heargued that founders can become domi-neering, autocratic, and inward looking,running the rm conservatively, andignoring issues in the rm’s environmentthat impact on performance. Cromie,Stephenson, and Montieth (1995) drew attention to the centralized and secretive

decision-making process in family rmsthat excluded employees. Donckels andFrohlich (1991) reported that family rms



participation of employees in decision-making, in ownership and/or with theself-fulllment of employees. Harris, Reid,and McAdam (2004) also observed thatunlike nonfamily rms, family rms rarely involved their employees in or informedthem of issues affecting the rm. Thegeneral view is that employees are lookedafter and therefore do not need to be con-sulted on issues pertaining to the rm.Reid and Adams (2001) examined differ-ences in human resource practices

between family and nonfamily rms andfound that compared with nonfamily rms, family rms spent less of their annual salary and wage bill on employeetraining and were less likely to engage insystematic analysis of employee trainingneeds. Schulze et al. (2001) noted thelower caliber of managers in family rmsand the inability of these rms to competeon the labor market for competent staff due to lower compensation packages.

According to Matlay (2002) family propri-etors paid greater attention to the trainingneeds of family members employed in therm than to nonfamily employees. Thesedepictions of the family rm suggestlimited concern for employee trainingoutside what is required to do their job,particularly for employees outside thefamily.

These two scenarios are consistent with the general description of HRM insmall rms (Barrett 1999; Wilkinson1999) and could apply to family and non-

family small rms alike. However, differ-ences in ownership control, managementpractices, and employee training betweenfamily and nonfamily rms should

become evident as the rms expand insize. For nonfamily rms, an increase inoutside equity interest and nonowner managers would lead to pursuit of short-term prot and growth goals (Daily andDollinger 1993). These goals are neces-

sary to enable access to resources outsidethe family, to meet the expectations of external owners and for the personal

al. 1997). Greater internal control proce-dures and accountability are called for

with the agency relationship that evolves.Daily and Dollinger (1993) explained thatthese procedures are aimed at reducingopportunism or self-interest actions of nonowner managers. Increased internalcontrols require formal managementpractices and skilled managers. Emphasison short-term prots and growth wouldthus require attention to employee per-formance and training. Further, employ-ees need to be trained for the new positions in growing rms. This situationdiffers from that for the family rm wheregrowth is restricted and managementpractices remain relatively informal (evenat larger rm sizes). Employee training isalso limited because competent employ-ees are perceived as a threat to the family proprietor’s desire to retain control of therm (Harris, Reid, and McAdam 2004).Employee training and development istherefore likely to receive more attentionin larger nonfamily than in similar-sizedfamily rms. It can be implied from theearlier representation that employeetraining will increase as outside owner-ship interest in the rm expands.

Kotey and Slade (2005) have demon-strated that an initial rapid increase inthe adoption of formal HRM practices isfollowed by a slower rise with further increases in rm size. This suggests thatany increase in the use of formal train-ing programs among nonfamily rms

should slow down at the larger end of the size scale, allowing family rms tocatch up with their nonfamily counter-parts. Following from the review of theliterature, these hypotheses have beendeveloped for testing:

(1) Employee training and rm size H1: On-the-job training is the predomi-

nant training method for SMEs of all

sizes. H2: The adoption of structured and development oriented training



H3: The increased adoption of formal training in SMEs occurs rapidly ini-tially but slows down after a certain

size.

(2) Employee training and family/non-family rms

H4: There are no differences in employee training between small family and nonfamily rms.

H5: Medium-sized nonfamily rms place greater emphasis on structured and development-oriented employee train-ing than similar family rms.

H6: At the larger end of the scale,differences between family and non-

family rms in the adoption of formal and development-oriented training decrease.

H7: Medium-sized nonfamily rms use more outsiders in employee training than similar family rms.

H8: At the larger end of the scale, the gapnarrows between family and non-

family rms in the use of specialist and outside trainers.

H9: Employee training increases as own-ership interest of the proprietors and their families decreases.

Research MethodsData

Data were obtained from the BusinessLongitudinal Survey, a national survey conducted by the Australian Bureau of Statistics and presented as a Conden-

tialised Unit Record File. Each record inthe le contains the main nancial andoperating characteristics of an individualrm in each of the scal years 1994–1995and 1997–1998.

Sample The research was based on data for

incorporated but independently ownedsmall and medium-sized manufacturing

rms, continuing operations in the 1997–1998 scal years. For a closer examinationof the impact of rm size on employee

medium-sized rms were divided intothree groups based on employeenumbers—that is, 20–49 employees(group two); 50–99 employees (groupthree); and 100–199 employees (groupfour). These categories are similar to thoseadopted in existing research on employeetraining in SMEs (see for example Loan-Clarke et al. 1999).There were 356 rms ingroup one (5–19 employees); 304 rms ingroup two; 180 rms in group three; and78 rms in group four.

The machinery and equipment manu-facturing sector (Australian and New Zealand Standard Industry Classication[ANZSIC] code 228) represented 23percent of rms in the sample, the highestpercentage of rms from any one industry sector. Wood and paper product (ANZSICcode 223) and nonmetallic mineralproduct manufacturing (ANZSIC code226) had the least proportion of rms inthe sample—4.6 percent and 4.9 percent,respectively. There were no signicantdifferences in industry sector concentra-tion between family and nonfamily rmsin the various size groups. Further, thelevel of technological intensity, measuredas the ratio of research and developmentexpenditure to sales (Dhanaraj andBearmish 2003; Erramilli, Samjeev, andSeong-Sok 1997)) was similar for bothfamily and nonfamily rms and across the

various size groups. Technological inten-sity was examined because of its possibleinuence on size of manufacturing rms

(Buckley and Casson 1991; Anderson and Tushman 1990) and thus on employeetraining.

The sample was limited to incor-porated independent rms to eliminatethe possible effect of legal form anddependence on a parent company onemployee training in family and non-family rms.

Measurement of VariablesFamily and nonfamily rms wereidentied by a question which required



they considered their rm a family rm. To validate their responses they wereasked to indicate (with a “yes” or “no”response to four conditions) why they considered their rm as family or non-family. The four conditions were—family members were—(1) working directors inthe rm; (2) employed in the rm; (3)not working but contributed to deci-sions; and (4) the rm was acquired fromparents. All respondents (100 percent)

who considered their rms as nonfamily provided “no” answers to all four ques-tions. In comparison, 96 percent of those

who operated family rms answered“yes” to family members as workingdirectors in the rm; 58 percent to family members as employees in the rm; 11percent to family members not working

but contributing to decisions; and 14.5percent indicated that the rm had beenpassed on from parents. It appears thatrespondents who identied their rms as

family rms based their selection onmore than one criterion, the mostcommon being family members as

working directors in the rm. The chi-square statistics, examining differencesin responses between family and non-family rms to the four questions, weresignicant ( p ≤ .001). In addition, a mul-tivariate comparison of family and pro-prietors’ equity interests and number of nonowner managers in the rm indicatedthat family members and proprietorshad more equity in rms classied asfamily than those identied as nonfamily rms (Table 1). Finally, the number of managers outside the family was fewer for family rms than for nonfamily rms.

The formal training programs exam-ined were (1) structured training courses;(2) seminars and workshops; (3) man-agement training; (4) professional train-ing; (5) computer training; and (6)

Table 1Firm Characteristics—Incorporated Family

and Nonfamily Firms

Variable Nonfamily Family F -value p -value

Means and Standard Error

Working Proprietors 1.40 (0.06) 2.00 (0.06) 44.43 0.000Nonfamily Managers 4.40 (0.23) 2.60 (0.23) 28.43 0.000Proprietors from the 0.00 (0.00) 0.63 (0.24) 31.27 0.000

Same Family Total Employees 47.00 (1.76) 33.00 (1.81) 28.34 0.000 Total Full-Time Employees 44.40 (1.71) 30.80 (1.75) 30.63 0.000 Age 7.76 (0.21) 9.67 (0.21) 40.29 0.000Percent of Equity from 44.00 (1.99) 71.00 (2.04) 91.68 0.000

Working ProprietorsPercent of Equity from 4.80 (0.96) 9.40 (0.98) 11.24 0.001

Nonworking Family Percent of Equity from 48.40 (1.97) 80.20 (2.02) 128.06 0.000

Proprietors and Family Percent of Equity from All 52.50 (2.08) 19.80 (2.13) 120.63 0.000

Other Sources





rms. The results also show that there were signicantly more proprietors fromthe same family for family than for non-family rms. Further analysis indicatedthat 70 percent of family rms had morethan one working proprietor compared

with 42 percent for nonfamily rms.Equity interests of working proprietorsand nonworking family members weregreater for family rms than for non-family rms (Table 1). In contrast, thepercentage of equity supplied fromsources other than the family and

working proprietors was smaller for family rms than for nonfamily rms.

Results of HypothesesTests The multivariate results showed sig-

nicant differences between family andnonfamily rms and among the differentsize groups (main effects) in percentageof employees who participated in the

various training programs in the1997–1998 scal year (Table 2). Differ-ences in employee training betweenfamily and nonfamily rms of differentsizes (interaction effect) were also sig-nicant. The F -values were signicant at

p < .05 for the three comparisons.

Main Effects—Size The mean values in Table 3 conrmed

that on-the-job training was the predom-

inant method for rms of all sizes (H1).For small rms (group one) job rotation,other training methods, seminars, struc-tured training, and health and safety training followed on-the-job training inorder of percentage employee participa-tion. Firms in group two had structuredtraining, job rotation, health and safety,other training, and seminars in order of employee participation, after on-the-jobtraining. Health and safety, structuredtraining, seminars, job rotation, and other training methods followed on-the-jobtraining for rms in group three. Thispattern was similar for group four exceptthat other training methods preceded jobrotation in terms of percentage employeeparticipation (Table 3). For all four groups, apprenticeships and trainee-ships, computer, management, and pro-fessional training were at the bottom of the list in terms of employee participa-tion. Univariate F -tests produced signi-cant F -values for all the trainingprograms, indicating that there were sig-nicant differences between one or moregroups for each training method exam-ined (Table 3).

The percentages of employees in the various training programs were signi-cantly less for group one compared withthe other groups (Table 4). Firms ingroup two had fewer employees in train-ing programs such as health and safety,seminars, management, professional, and

Table 2Multivariate Tests a—Values for Wilks’s Lambda

Effect Value F Hypothesis df Error df Signicance

Intercept 0.240 285.169 b 10.000 901.000 0.000Size 0.735 9.729 30.000 2645.289 0.000Family/Nonfamily 0.962 3.545 a 10.000 901.000 0.000Size and Family 0.952 1.487 30.000 2645.289 0.043

aDesign intercept + size + family business + size × family business



computer training when compared withthose in groups three and four. Employeeparticipation in on-the-job training,apprenticeships, and job rotation wassimilar for rms in groups two, three,and four (Table 4). More employees ingroup four compared with group two

were in structured and “other training”

programs. With the exception of “other training,” employee participation in thevarious programs was similar for groups

the adoption of structured and develop-ment-oriented training increases withrm size (H2) and that the increasedadoption of formal training programstapers at the larger end of the size scale(H3).

Main Effects—Family/Nonfamily

SMEsFrom the mean values, on-the-jobtraining was the predominant method

Table 3Descriptive Statistics and Univariate F Results for Training

Programs in the Four Size Groups

Small Medium FirmsFirms

Means and Standard Error

Variable/Groups Group 1 Group 2 Group 3 Group 4 F -Value p -Valuen = 356 n = 304 n = 180 n = 78

Structured Training 0.13 0.24 0.28 0.31 36.087 0.000(0.01) (0.011) (0.014) (0.025)

Seminars and 0.13 0.21 0.27 0.29 36.926 0.000

Workshops (0.009) (0.01) (0.013) (0.023)Professional 0.04 0.1 0.16 0.18 38.212 0.000 Training (0.007) (0.008) (0.01) (0.02)

Management 0.07 0.12 0.19 0.2 31.613 0.000 Training (0.008) (0.009) (0.011) (0.02)

Computer Training 0.07 0.13 0.18 0.2 21.922 0.000(0.009) (0.009) (0.012) (0.022)

Health and Safety 0.12 0.22 0.30 0.33 52.792 0.000(0.009) (0.01) (0.013) (0.024)

On-the-Job Training 0.36 0.43 0.43 0.44 6.829 0.000

(0.011) (0.012) (0.016) (0.028) Job Rotation 0.17 0.23 0.26 0.25 9.081 0.000(0.011) (0.012) (0.016) (0.029)

Apprenticeship and 0.09 0.14 0.16 0.17 11.708 0.000 Traineeship (0.009) (0.009) (0.012) (0.022)

Other Training 0.14 0.22 0.23 0.28 18.866 0.000Programs (0.01) (0.01) (0.014) (0.024)



(Table 5). For nonfamily rms structuredtraining, health and safety training, and

seminars and workshops followed on-the-job training in percentage of employee participation. “Other training”methods and job rotation were next inline, whereas computer, management,professional training, and apprentice-ships were at the bottom of the list astraining programs employed in nonfam-ily SMEs (Table 5).

For family rms job rotation, health

and safety, structured training, other training, and seminars and workshopsfollowed on the job training in order of

and computer, management, and profes-sional training were the least used train-

ing programs. The comparisons between family andnonfamily rms revealed that a greater percentage of employees participated instructured training, seminars and work-shops, professional, computer, and man-agement training, health and safety, andother training programs in nonfamily than in family SMEs (Table 5). The per-centages of employees in job rotation

and on-the-job programs were similar for the two types of rms. Apprenticeshipsand traineeships were more popular in

Table 4Multiple Comparisons among Firms in the Four Groups a

Training t -Values and Signicant Level Variable/Groups

1–2 1–3 1–4 2–3 2–4 3–4Compared

Structured Training − 0.105 − 0.151 − 0.203 − 0.046 − 0.098 − 0.052(0.000) (0.000) (0.000) (0.053) (0.000) (0.204)

Seminars and − 0.08 − 0.15 − 0.19 − 0.07 − 0.107 − 0.037 Workshops (0.000) (0.000) (0.000) (0.000) (0.000) (0.313)

Professional Training − 0.054 − 0.127 − 0.15 − 0.073 − 0.096 − 0.023(0.000) (0.000) (0.000) (0.000) (0.000) (0.848)

Management Training − 0.054 − 0.125 − 0.144 − 0.071 − 0.09 − 0.018(0.000) (0.000) (0.000 (0.000) (0.000) (0.953)

Computer Training − 0.052 − 0.11 − 0.141 − 0.073 − 0.096 − 0.031(0.000) (0.000) (0.000) (0.002) (0.001) (0.755)

Health and Safety − 0.106 − 0.185 − 0.216 − 0.079 − 0.11 − 0.032(0.000) (0.000) (0.000) (0.000) (0.000) (0.663)

On-the-Job Training − 0.0656 − 0.0694 − 0.0802 − 0.0037 − 0.0146 − 0.108(0.001) (0.001) (0.011) (1.00) (0.99) (1.00)

Job Rotation − 0.06 − 0.094 − 0.08 − 0.034 − 0.02 0.013(0.003) (0.000) (0.016) (0.353) (0.965) (0.997)

Apprenticeship and − 0.055 − 0.072 − 0.076 − 0.017 − 0.0214 − 0.004 Traineeship (0.000) (0.000) (0.001) (0.86) (0.87) (1.000)

Other Training − 0.079 − 0.097 − 0.156 − 0.018 − 0.077 − 0.059Programs (0.000) (0.000) (0.000) (0.868) (0.002) (0.037)

aPost hoc tests—Dunnett T3.



the difference was signicant at only p = .10.

Interaction Effect—Family/ Nonfamily Business and Size

Following the results from the mainmodel—(size + family + family × size),

separate MANOVAs were carried out for family and nonfamily rms to examinethe size effect on training for each own-ership type. The multivariate tests weresignicant for both types of rms—the

values for Wilks’s Lambda were—(Wilks’sLambda = 0.77; F = 3.99; df = 30; 1,277and p = .000) for family rms; and(Wilks’s Lambda = 0.62; F = 7.98; df = 30;1,342 and p = .000) for nonfamily rms.

The multivariate results indicate that for both family and nonfamily rms, therewere differences between two or more

who participated in one or more trainingprogram(s). This was supported by theunivariate results presented in Tables 6and 7.

For family rms, the post hoc com-parisons showed signicant increases

between groups one and two in the per-

centages of employees involved in all thetraining programs at ( p < .01) except jobrotation which was signicant at p = .028and professional training at p = .017. Theincreases between group one and three

were signicant at p < .01 for all pro-grams except on-the-job training (for

which p = .075) and other programs(which was not signicant). Group four differed from group one on health and

safety ( p = .002); professional training( p = .047); and seminars and computer training ( p = 07) The post hoc compar

Table 5Descriptive Statistics and F -Values for Family and

Nonfamily Firms Compared

Variable Means and Standard Comparison F - p -Errors 1–2 value value

Variable Nonfamily Family Comparison F - p -(1) (2) 1–2 value value

Structured Training 0.27 (0.009) 0.21 (0.013) 0.058 13.65 0.000Seminars and 0.25 (0.008) 0.19 (0.012) 0.055 14.19 0.000

WorkshopsProfessional Training 0.14 (0.007) 0.1 (0.01) 0.037 9.33 0.002Management Training 0.16 (0.007) 0.13 (0.011) 0.035 7.16 0.008Computer Training 0.16 (0.008) 0.13 (0.011) 0.037 7.08 0.008Health and Safety 0.26 (0.009) 0.22 (0.013) 0.032 4.34 0.038On-the-Job Training 0.43 (0.011) 0.4 (0.015) 0.024 1.74 0.188

Job Rotation 0.23 (0.011) 0.23 (0.015) 0.002 0.018 0.89 Apprenticeship and 0.13 (0.008) 0.15 (0.011) − 0.023 2.71 0.10

TraineeshipOther Training 0.24 (0.009) 0.2 (0.013) 0.036 5.11 0.024

Programs

Based on estimated marginal means adjustment for multiple comparisons: Bonferroni.



between rms in the other size groups. The ndings imply that the initialupsurge in employee training at the crit-ical growth phase was not continuedafter this phase.

A different story emerged from thepost hoc pairwise comparisons in

employee training between nonfamily rms in the various size groups. Theresults showed signicant increases ( p <

between groups three and four) for employee participation in programs suchas structured training, seminars and

workshops, management and profes-sional training, and health and safety programs. Employee participation in on-the-job training was similar for all size

groups, participation in job rotationincreased between groups one and threeonly at p = 009 and the percentages


Programs in the Four Size Groups of Family Firms a


Training Group 1 Group 2 Group 3 Group 4 F -Value p -Value Variable/Groups n = 195 n = 157 n = 78 n = 18

Means and Standard Errors


Seminars and 0.13 0.19 0.22 0.23 8.078 0.000






(0.016) (0.017) (0.025) (0.051) Job Rotation 0.16 0.23 0.26 0.26 5.269 0.001(0.015) (0.017) (0.024) (0.051)



aSignicant post hoc comparisons between the groups are reported in the text but

not in the table.



apprenticeships increased betweengroups one and three at p = .043 andgroups one and four at ( p = .04). Partic-ipation in computer training increasedfor all pairwise comparisons at ( p < .01)except between groups one and two andgroups three and four where the

increases were not signicant. Similarly,the increased use of “other training” pro-grams was sig nicant for all pairwise

tion of groups three and four for whichthe changes were not signicant andgroups two and three where the increase

was signicant at p = .056. When family and nonfamily rms in

the various size categories were com-pared, nonfamily rms in group one had

a greater percentage of employees inhealth and safety and on-the-job trainingthan family rms in the same group


Programs in the Four Size Groups of Nonfamily Firms a


Training Group 1 Group 2 Group 3 Group 4 F -value p -value Variable/Groups n = 161 n = 147 n = 102 n = 60



Seminars and 0.13 0.22 0.32 0.34 40.432 0.000






(0.016) (0.017) (0.02) (0.027) Job Rotation 0.18 0.23 0.27 0.25 4.067 0.007(0.017) (0.018) (0.021) (0.028)



aSignicant post hoc comparisons between the groups are reported in the text but

not in the table.



employee training between small family and nonfamily rms—H4 was refuted.

There were more employees in appren-ticeships and traineeships for family than

nonfamily rms in group two. Family rms in group three had lower percent-ages of employees in the formal pro-grams examined compared withnonfamily rms in the same group (Table8). Thus medium-sized nonfamily rmsplaced greater emphasis on formalemployee training and development thansimilar family rms, providing supportfor H5. The disparities in formal

employee training between family andnonfamily rms decreased in group four to structured training and seminars

nonfamily SMEs in the adoption of formal employee training declined at thelarger end of the size scale, conrmingH6. However, this nding needs to be

interpreted with caution as it may reectlack of statistical power from the smallsample sizes, especially for family rms.

Consistent with the observed differ-ences for employee participation in train-ing programs (Table 8), family rms wereless likely than nonfamily rms to useoutside professional trainers, structuretheir in-house programs, or enrolemployees in university courses (Table

9), particularly for rms in group three. The gradual increase and subsequentdecrease in the differences between

Table 8Descriptive Statistics and Comparisons between Family

and Nonfamily rms in the Four Size Groups

Variable Nonfamily Family 1–2 F - p -(1) (2) value value


Group 1 (5–19)Health and Safety 0.138 (0.014) 0.096 (0.013) 0.042 4.74 0.03On-the-Job 0.384 (0.019) 0.34 (0.018) 0.044 2.85 0.09

Group 2 (20–49) Traineeships and 0.121 (0.013) 0.159 (0.013) − 0.038 4.07 0.045 Apprenticeships

Group 3 (50–99)Structured Training 0.33 (0.017) 0.22 (0.02) 0.114 18.70 0.000Seminars and Workshops 0.32 (0.015) 0.22 (0.017) 0.091 16.94 0.000Management Training 0.22 (0.016) 0.16 (0.018) 0.054 4.91 0.028Professional Training 0.2 (0.016) 0.13 (0.018) 0.069 8.37 0.004Computer Training 0.21 (0.017) 0.15 (0.02) 0.068 6.70 0.01Health and Safety 0.33 (0.016) 0.26 (0.018) 0.067 7.79 0.006Other Training 0.28 (0.016) 0.19 (0.018) 0.09 13.93 0.000

Group 4 (100–199)Structured Training 0.36 (0.023) 0.25 (0.042) 0.11 5.37 0.023

Seminars and Workshops 0.34 (0.018) 0.23 (0.032) 0.102 7.66 0.007

Adjustment for multiple comparisons: Bonferroni.



cation of formal training programs wasrepeated when training providers werecompared. The ndings indicate thatmedium-sized nonfamily rms use moreoutsiders in employee training thansimilar family rms (H7) and that the gap

between family and nonfamily rms inthe use of specialist and outside trainersnarrows at the larger end of the size scale(H8), although this latter nding may be

associated with the small sample size for family rms in group four.The path analyses demonstrated sig

training and ownership interest of working proprietors and their familiesfor the sample as a whole (standardizedregression weight = − 0.316, p = .000) andfor nonfamily rms (standardized regres-sion weight = − 0.394, p = .000), but notfor family rms (standardized regression

weight = − 0.102, p = .053). The signi-cant negative regression weights conrmthat employee training in SMEs, and in

particular nonfamily SMEs, increases asownership interest of working propri-etors and their families decrease con

Table 9Chi-Square Statistics and Percentages for Training

Providers in Family and Nonfamily Firms

Variables Nonfamily Family Firms Total Chi- p -ValueFirms (Percent) (Percent) Square

(Percent)

Group 1—5–19Employees or Owners 24 16 19 3.35 0.08

StructuredGroup 2—20–49

Universities 15 6.4 10.5 5.96 0.016Group 3—50–99

Professional 58.8 42.3 51.7 4.83 0.035 Associations

Private Training 44.1 29.5 37.8 4.025 0.062Consultants

Universities 28.4 15.4 22.6 4.28 0.048Group 4—100–199

Private Training 55 27.8 48.7 4.11 0.06Consultants

All FirmsEmployees or 36.4 27.0 31.8 9.29 0.002

Owners—Structured

Professional 37.9 26.8 32.5 12.86 0.000 Associations

Private Training 29.4 22.3 25.9 5.92 0.016Consultants

Universities 16.8 7.4 12.2 19.09 0.000



DiscussionsEmployee Training and Firm Size

The ndings conrmed that on-the-jobtraining is the predominant trainingmethod in SMEs and that the adoption of formal training increases with rm size,rapidly in the initial stages but slower thereafter. These ndings are consistent

with the literature (Kotey and Slade 2005;Loan-Clarke et al. 1999; MacMahon andMurphy 1999; Storey 1994; Marlow andPatton 1993). The question that ensuesfrom the prevalence of on-the-job train-ing is whether it is appropriate for SMEs.Some researchers argue that informaltraining is consistent with the overallstrategic orientation of small rms—informal and exible (Hill and Stewart2000; Westhead and Storey 1996; Mar-shall et al. 1995). Others contend that by concentrating on informal training, SMEsmiss out on gains in sustained competi-tive advantage from a well-trained work-force (Stewart and McGoldrick 1996;Garavan, Costine, and Heraty 1995). Thereasons why SMEs prefer informal train-ing (see section titled “Background”)appear to give credence to the rst posi-tion—that informal training ts well withSME strategic orientation—particularly for smaller rms. Returns from formaltraining programs are realizable in thelong-term, but small rms are concerned

with short-term survival (Hill and Stewart2000; Westhead and Storey 1996). It is not

economically sound to spend on long-term value creation when the rm isstruggling with raising adequate capitalto keep aoat in the short-term. Given thehigh level of vulnerability and uncer-tainty among small rms and their short-term orientation, training programs thatare specic to the job, low cost, short-term oriented and aimed at developinga multiskilled workforce may be more

relevant to building competitive advan-tage (providing adequate exibility torespond to the rapid changes) at this

The second school of thought—staff with accredited experience and knowl-edge adds to a rm’s competitive posi-tion—may be more relevant to rms thatsurvive the initial growth phase andencounter different competitive dynamics.

At this stage of their growth, rms develophierarchical structures with middle man-agers responsible for the day-to-day oper-ations. Division of labor increases andemployees begin to specialize in specicareas of activity.The ability of middle man-agers to implement effectively decisions of the chief executive ofcers (CEOs) and theavailability of competent personnel for internal transfers within the rm areimportant to individual employee andrm performance (Westhead and Storey 1996). At this stage, rms face more stablemarkets for their products and havestronger internal employment markets.

The risks associated with returns fromtraining would have decreased and rmsare able to adopt a longer-term horizon(Holtman and Idson 1991). The ndingssupport the position that formal anddevelopment-oriented employee trainingis more relevant to rms that survive theinitial growth phase. A rise in formal train-ing was observed as rm size increased.In contrast, growth in in-house trainingprograms (such as on-the-job training,apprenticeships and traineeships, and jobrotation) stabilized after an initial increaseup to 49 employees. The ndings imply greater concern for both employee train-

ing and development with increase in rmsize to enhance employees’ ability to con-tribute to organizational success (Kamanet al. 2001). The smaller proportion of employees in managerial compared withoperational positions in the small andmedium-sized manufacturing rms exam-ined may explain the lower percentages of employees in management and profes-sional training.

As part of their strategic assessment,SMEs rst need to evaluate their rm’sprimary goals and deciencies or



(Faireld-Sonn 1987). The result may bethat they do not have a current need thatcan be fullled by training or that exist-ing training programs are not designedin a way that is effective for them (Reid1987). Important factors that requireconsideration are length of training(Banks, Bures, and Champion 1987), thecost of training, and the returns that

would be achieved. The initial rapid increase in formal

training programs and subsequent stabi-lization in the application of these pro-grams (for rms with 50–199 employees)concurs with the pattern observed by Loan-Clarke et al. (1999) for investmentin management training and develop-ment. It is also consistent with the nd-ings of Kotey and Slade (2005) for HRMpractices in SMEs. Further increases inthe level of formal employee trainingmay lead to diminishing returns for rms

with more than 99 employees dueperhaps to too many specialists, inade-quate promotion avenues, and/or toomany employees off-the-job.

Employee Training and Family Firms

The pattern observed for SMEs ingeneral—prevalence of on-the-job train-ing and an initial rapid increase and sub-sequent stabilization in the adoption of formal training as rm size expanded—

was evident for nonfamily rms but notfor family rms. For family rms, signi-

cant increases in formal training occurredonly during the critical growth stages between 20 and 49 employees with only modest incremental changes in the nextgrowth phases. Family rms, like nonfam-ily rms, are pushed toward more formalpractices with rm growth (Reid and

Adams 2001; Leon-Guerrero, McCann,and Haley 1998), as conicts occur

between the requirements for effective

management of growth and the preferredinformal, personal, and direct style of family proprietors (Mintzberg and Waters

this stage, the limits of informality becomes overstretched (Roberts, Saw- bridge, and Bamber 1992) and the bene-ts of formal training begin to outweighthe time and costs involved.

The gap between medium family andnonfamily rms (with 50–99 employees)in formal programs appears to conrm arelative preference for informal trainingamong family rms (Harris, Reid, andMcAdam 2004; Loan-Clarke et al. 1999).However, for rms with 20–49 and100–199 employees, similarities betweenfamily and nonfamily rms in the use of management, professional, and computer training programs indicate that the patri-archal management style, sophisticatedpaternalism (Wrag 1996), the desire of family directors to retain power andcontrol of the rm, and to avoid employ-ees who are more competent than them(Loan-Clarke et al. 1999) are not evidentin all family rms. The results may also

be indicative of the smaller size of man-agerial staff (for whom such training may

be provided) for both types of rms at20–49 employees and a lack of statisticalpower in the analysis for rms in groupfour (100–199 employees).

Greater attention to employee trainingand development among nonfamily rms(particularly those with 50–99 employ-ees) is in consonance with their protand growth goals, necessary to attractresources from outside the family and tomeet the requirements of external owners.

Further, employees need to be trained toll the new positions that open withrm growth. Pursuit of external fundingobliges nonfamily SMEs to develop sus-tainable competitive positions throughtheir acquisition, development, and use of resources, including human resources.

This is consistent with the relatively high but negative regression weight for therelationship between employee training

and the percentage of equity owned by working proprietors and their families. Italsooverlapswith thendingsforSMEsin



where concentration of ownership inter-est is relatively higher, limited capitaland emphasis on operational efciency (McConaughy 2000) restricts investmentin human capital development. However,expenditure on training (human capitaldevelopment) increases as more funds

become available from external sourcesand ownership is dispersed.At this growthstage the business enters another compet-itive arena that calls for developing itshuman capital to maintain and enhance itscompetitive position and to prepareemployees for new positions in the rm.

Family SMEs are able to continue in business for longer periods than non-family rms (Littunen and Hyrsky 2000)as indicated by the differences in ages

between family and nonfamily rms.Family rms have also been shown toperform as well as nonfamily rms(Anderson and Reeb 2003; Kotey 2005).

Thus, family rms indeed may have theadditional resource of family skills andinvolvement, enabling them to achievesimilar levels of effectiveness with lessformalized training. Perhaps these addi-tional resources allow them to gradually increase training as they expand, rather than the more substantial increase andlevelling off of training seen in the non-family rms. The approach to employeetraining in family SMEs is in consonance

with their slower growth rates, informalmanagement styles, limited nancialresources, and greater emphasis on ef-

ciency compared with nonfamily SMEs(Kotey 2005). Kotey suggested that theinformal system, including informalemployee training, and dependence oninternal resources to fund growth could

be detrimental to the larger family rmin its endeavor to carve a competitiveposition when competition intensies.

Management and Policy ImplicationsThe issue for both family and nonfam

balance between the positive attributes of informal training and the market demandfor quality resources (including humanresources). Informal training may beappropriate for small family rms as they attend to the employment needs of family members amid the uncertainty and fre-quent changes that characterize rms atthis stage. Although over time formaltraining programs that reect markettrends will be necessary to sustain growth,skills and knowledge transmitted throughthe informal process will continue to berelevant for building unique competitivepositions. Sirmon and Hitt (2003) pro-posed a number of strategies that family rms can use to achieve this balance inhuman capital. These include increasingheterogeneity in top management teamthrough (1) hiring nonfamily managers;(2) encouraging family members to workfor other rms; (3) using outside boards;and (4) alliances with other rms.

Managers and advisers would benetfrom recognizing the impact of rmsize on employee training in family andnonfamily rms and that the two typesof rms adopt different approaches toobtaining the level of human resourcesnecessary to remain and compete effec-tively in the market. The ndings shouldenable development of appropriatestrategies to deal with each uniquesituation.

Government intervention in training of employees for SMEs should be more effec-

tive at the small level where rms areunable to afford the resources needed totrain their staff. Such programs shouldseek to minimize employee absence from

work and should be tailored to the specicneeds of the industry sector. In addition,such an intervention would capture theproblem of limited employee training

where concentration of ownership inter-est is high. Because nonfamily rms with

higher concentration of ownership inter-est tend to be in the smaller category, their training needs will be reasonably catered



At the larger sizes (for both family andnonfamily rms) where employee train-ing becomes a competitive tool, exten-sive government intervention in trainingof managerial and operational employeesmay interfere with market forces andencourage the less efcient rms topersist.

Contrary to the initial contention thatsmall family and nonfamily rms aresimilar, the results showed that differ-ences in employee training were evidentfrom the onset. This means family rmsare different from nonfamily rms evenat the small level and emphasizes theimportance of the family dimension inmanagement and SME research. A longi-tudinal study of employee training prac-tices of family and nonfamily rms asthey progress through various sizesshould complement the ndings of thisresearch. Further, an investigation intothe association between training and per-formance for family and nonfamily rmsshould shed more light on the relativeeffectiveness of the different approachesto employee training.

Family rms were examined as oneentity although the literature indicatesthat there are different types of family rms (Basu 2004; Chua, Chrisman, andChang 2004; Birley 2001; Dunn 1995).

Thus, the samples of family and nonfam-ily rms may not be absolutely homoge-nous sets. These factors should beconsidered in interpreting the ndings.

Another limitation is the age of the dataset. However, it is likely that the two typesof rms have continued the same prac-tices since the data were collected, andthe research is important both in inform-ing managers as well as contributing tothe literature on employee training infamily and nonfamily SMEs.

References Anderson, P., and M. L. Tushman (1990).“Technological Discontinuities and

Dominant Designs: A Cyclical Model

tratively Science Quarterly 35(4),604–633.

Anderson, R. C., and D. M. Reeb (2003).“Founding-Family Ownership andFirm Performance: Evidence from theS&P 500,” The Journal of Finance 63(3), 1301–1328.

Astrachan, J. H., and T. A. Kolenko(1994). “A Neglected Factor Explain-ing Family Business Success: HumanResource Practices,” Family Business

Review 7(3), 251–262.Banks, M. C., A. L. Bures, and D. L. Cham-

pion (1987). “Decision-Making Factorsin Small Business: Training and Devel-opment,” Journal of Small Business

Management 25, 19–26.Barrett, R. (1999). “Industrial Relations

in Small Firms: The Case of the Australian Information Industry,” Employee Relations 21(3), 311–324.

Basu, A. (2004). “Entrepreneurial Aspira-tions among Family BusinessOwners,” International Journal of

Entrepreneurial Behaviour and Research 10(1/2), 12–33.

Birley, S. (2001). “Owner–Manager Atti-tudes to Family and Business Issues:

A 16 Country Study,” Entrepreneur- ship Theory and Practice 26(2), 63–76.

Blau, P. M. (1970). “A Formal Theory of Differentiation in Organisations,”

American Sociological Review 35(2),201–218.

Buckley, P. J., and M. Casson (1991). The

Future of Multinational Enterprise .London: MacMillan.Byrne, B. M. (2001). Structural Equation

Modelling with AMOS, Basic Concepts Applications and Programming . NJ:Lawrence Erlbaum Associates, USA.

Chandler, G. N., and G. M. McEvoy (2000). “Human Resource Manage-ment, TQM, and Firm Performance inSmall and Medium-Sized Enterprises,”

Entrepreneurship Theory and Practice 25(1), 45–58.Chua J H J J Chrisman and P Sharma



by Behavior,” EntrepreneurshipTheory and Practice 23(4), 19–39.

Chua, J. H., J. J. Chrisman, and E. Chang(2004). “Are Family Firms Born or Made? An Exploratory Investigation,”

Family Business Review 17(1), 37–55.Cosh, A., J. Duncan, and A. Hughes

(1998). Investment in Training and Small Firm Growth and Survival: An

Empirical Analysis for the UK 1987–1995 . Research Report No. 36,DfEE Publications. London: DfEE/HMSO.

Cromie, S., B. Stephenson, and D. Mon-tieth (1995). “The Management of Family Firms: An Empirical Investiga-tion,” International Small Business

Journal 13, 11–34.Curran, J., R. Blackburn, J. Kitching, and

J. North (1997). “Small Firms and Workforce Training: Some Results Analysis and Policy Implications froma National Survey,” in Small Firms:

Enterprising Futures . Eds. M. Ram, D.Deakins, and D. Smallbone. London:Paul Chapman, 90–101.

Daily, C. M., and M. J. Dollinger (1993).“Alternative Methodologies for Identi-fying Family vs. Non-Family ManagedBusinesses,” Journal of Small Business

Management 31, 70–90.Department of Employment, Work Rela-

tions, and Small Business (DEWRSB)(1998). A Portrait of Australian Busi-ness, Results of the 1996 Business Lon-

gitudinal Survey . Small Business

Research Program. Canberra, Aus-tralia: ABS.Dhanaraj, C., and P. W. Bearmish (2003).

“A Resource-Based Approach to theStudy of Export Performance,”

Journal of Small Business Manage-ment 41(3), 242–261.

Donckels, R., and E. Frohlich (1991). “AreFamily Businesses Really Different?European Experiences from

STRATOS,” Family Business Review 7,149–160.Dunn B (1995) “SuccessThemes in Scot

and Practices on Perceptions of Organi-sational Performance,” Academy of

Management Journal 39(4), 949–969.

Dyer, W. G., Jr. (1986). Cultural Change in Family Firms: Anticipating and Man-aging Business and Family Transac-

tions . San Francisco: Jossey-Bass.——— (1988). “Culture and Continuity in

Family Firms,” Family Business Review 1(1), 143–162.

English, J. (2001). How to Organise and Operate a Small Business , 8th ed.Sydney: Allen & Unwin.

Erramilli, M. K., A. Samjeev, and K.Seong-Sok (1997). “Are Firm-Specic

Advantages Location Specic Too?” Journal of International Business Studies 28(4), 735–763.

Faireld-Sonn, F. W. (1987). “A StrategicProcess Model for Small Business

Training and Development,” Journal of Small Business Management 25,11–19.

Garavan, T. N., P. Costine, and N. Heraty (1995). “The Emergence of StrategicHuman Resource Management,”

Journal of European Industrial Train-ing 19(10), 4–10.

Gersick, K. E., J. A. Davis, H. McCollom,and I. Lansberg (1997). Generation toGeneration: Life Cycles of the Family

Business . Boston, MA: Harvard Busi-ness School Press.

Gibb, A. A. (1997). “Small Firms Trainingand Competitiveness: Building Upon

the Small Business as a LearningOrganisation,” International Small Business Journal 15(3), 13–29.

Harris, R. I. D., R. S. Reid, and R. McAdam(2004). “Employee Involvement inFamily and Non-Family Owned Busi-nesses in Great Britain,” International

Journal of Entrepreneurial Behaviour and Research 10(1/2), 49–58.

Heneman, R. L., J. W. Tansky, and S. M.

Camp (2000). “Human ResourceManagement Practices in Small andMedium Sized Enterprises: Unan



Research Perspectives,” Entrepreneur- ship Theory and Practice 25(1), 11–26.

Hill, R., and J. Stewart (2000). “HumanResource Development in SmallOrganisations,” Journal of Europeanand Industrial Training 24(2/3/4),105–117.

Holtman, A. G., and T. L. Idson (1991).“Employer-Size and On-the-Job Train-ing Decisions,” Southern Economic

Journal 58, 339–355.Hornsby, J. S., and D. K. Kuratko (1990).

“Human Resource Management inSmall Firms: Critical Issues for the1990,” Journal of Small Business Man-agement 28(July), 9–18.

Hoy, F. (2003). “Legitimizing Family Busi-ness Scholarship in OrganizationalResearch and Education,” Entrepre-neurship Theory and Practice 27(4),417–422.

Huang, T.-C. (2001). “The Relation of Training Practices and OrganizationalPerformance in Small and Medium-Size Enterprises,” Education and Training 43(8/9), 437–445.

Ibrahim, A. B., and W. Ellis (2003). Family Business Management, Con-cepts and Practices . Dubuque, IA:Kendall/Hunt.

Jennings, P., and G. Beaver (1995). “TheManagerial Dimension of Small Busi-ness Failure,” Journal of Strategic Change 4(5), 1–17.

——— (1997). “The Performance and

Competitive Advantage of SmallFirms: A Management Perspective,” International Small Business Journal 15(2), 63–75.

Kaman, V., A. M. McCarthy, R. D. Gulbro,and L. T. Tucker (2001). “Bureaucraticand High Commitment HumanResource Practices in Small ServiceFirms,” Human Resource Planning 24(1), 33–44.

Kets de Vries, M. E. R. (1993). “TheDynamics of Family Controlled Firms:The Good and Bad News ” Organiza

Kotey, B. (2005). “Are Performance Dif-ferences Between Family and Non-family SMEs Uniform Across All FirmSizes?” International Journal of Entre-

preneurial Behaviour and Research11(6), 394–421.

Kotey, B., and A. Sheridan (2004). “Chang-ing HRM Practices with Firm Size,”

Journal of Small Business and Enter- prise Development 11(4), 474–485.

Kotey, B., and P. Slade (2005). “FormalHRM Practices in Small GrowingFirms,” Journal of Small Business

Management 43(1), 16–40.Lane, P. J., and M. Lubatkin (1998). “Rel-

ative Absorptive Capacity and Inter-Organizational Learning,” Strategic

Management Journal 19, 461–477.Lattimore, R., A. Madge, B. Martin, and J.

Mills (1998). Design Principles for Small Business Programs and Regula-tions . Canberra: Productivity Commis-sion Staff Research Paper, AusInfo.

Leon-Guerrero, A., J. E. McCann, and J.D. Haley (1998). “A Study of PracticeUtilisation in Family Firms,” Family

Business Review 11(2), 107–120.Littunen, H., and K. Hyrsky (2000). “The

Early Entrepreneurial Stage in FinnishFamily and Nonfamily Firms,” Family

Business Review 13(1), 41–53.Litz, R. A. (1995). “The Family Business:

Towards Denitional Clarity,” Family Business Review 8(2), 71–81.

Litz, R. A., and A. C. Stewart (2000).“Trade-Name Franchise Membership

as a Human Resource ManagementStrategy: Does Buying Group TrainingDeliver ‘True Value’ for Small Retail-ers?” Entrepreneurship Theory and

Practice 25(1), 125–135.Loan-Clarke, J., G. Boocock, A. Smith,

and J. Whittaker (1999). “Investmentin Management Training and Devel-opment by Small Business,” Employee

Relations 21(3), 296–310.

Lyman, A. R. (1991). “Customer Service:Does Family Ownership Make a Dif-ference?” Family Business Review 4



Mabey, C., and A. Thomson (2001). “Man-agement Development in the SmallBusiness Sector: A Report at the Mil-lennium,” Training and Management

Development Methods 15(2), 417–425.MacMahon, J., and E. Murphy (1999).

“Managerial Effectiveness in SmallEnterprises: Implications for HRD,”

Journal of European Industrial Train-ing 23(1), 25–35.

MacRae, D. (1991). “Characteristics of High and Low Growth Small andMedium-Sized Businesses,” paper pre-sented at the 21st European SmallBusiness Seminar, Barcelona, Septem-

ber 18–20.Marlow, S., and D. Patton (1993). “Man-

aging the Employment Relationship inthe Smaller Firm: Possibilities for Human Resource Management,” Inter-national Small Business Journal 11(4),57–64.

Marshall, J. N., N. Alderman, C. Wong, and A. Thwaites (1995). “The Impact of Management Training and Develop-ment on Small and Medium-SizedEnterprises,” International Small Busi-ness Journal 13, 73–90.

Martin, G., and H. Staines (1994). “Man-agerial Competencies in Small rms,”

Journal of Management Development 13(7), 23–34.

Matlay, H. (2002). “Training and HRDStrategies in Family and Non-Family Owned Small Businesses: A Compara-tive Approach,” Education and Train-

ing 44(8/9), 357–370.McConaughy, D. L. (2000). “Family CEOs vs Non-Family CEOs in the Family Controlled Firm: An Examination of Level and Sensitivity of Pay to Perfor-mance,” Family Business Review 13(2),121–131.

Mintzberg, H., and T. Waters (1990). Employment Outlook . Paris: Organisa-tion for Economic Cooperation and

Development.Morris, M. H., R. O. Williams, J. A. Allen,and R A Avila (1997) “Correlates of

tions,” Journal of Business Venturing 12, 385–401.

Pascarella, P., and M. A. Frohman (1990).The Purpose-Driven Organization .San Francisco: Jossey-Bass.

Patton, D., S. Marlow, and P. Hannon(2000). “The Relationship between

Training and Small Firm Performance,Research Frameworks and LostQuests,” International Small Business

Journal 19(1), 11–28.Reid, S. (1987). “Designing Management

Education and Training Programs for Service Firm Entrepreneurs,” Journal of Small Business Management 25,51–61.

Reid, R. S., and J. S. Adams (2001).“Human Resource Management—A Survey of Practices within Family andNon-Family Firms,” Journal of Euro-

pean Industrial Training 25(6),310–320.

Reid, R. S., and R. I. D. Harris (2002).“The Determinants of Training inSMEs in Northern Ireland,” Educationand Training 44(8), 443–450.

Roberts, I., D. Sawbridge, and G. Bamber (1992). “Employee Relations in SmallFirms,” in Handbook of Industrial

Relations Practice . Ed. B. A. Towers.London: Kogan Page, 240–257.

Schulze, W. S., M. H. Lubatkin, R. N. Dino,and A. K. Buchhltz (2001). “Agency Relations in Family Firms: Theory andEvidence,” Organisational Science 12(2), 99–116.

Sharma, P. (2004). “An Overview of theField of Family Business Studies:Current Status and Directions for theFuture,” Family Business Review 17(1),1–37.

Sharma, P., J. J. Chrisman, and J. H. Chua(1997). “Strategic Management of theFamily Business: Past Research andFuture Challenges,” Family Business

Review 10, 1–35.

Sirmon, D. G., and M. A. Hitt (2003).“Managing Resources: Linking UniqueResources Management and Wealth



neurship Theory and Practice 27(4),339–358.

Smith, A. J., G. Boocock, J. Loan-Clarke,and J. Whittaker (2002). “IIP andSMEs: Awareness, Benets and Barri-ers,” Personnel Review 31(1/2), 62–86.

SPSS Inc. (1997). SPSS Advanced Statis-

tics: Statistical Package for the Social Sciences. Advanced Statistics 7.5.Chicago, IL: SPSS Inc.

Stewart, A. (2003). “Help One Another,Use One Another: Toward an Anthro-pology of the Family,” Entrepreneur-

ship Theory and Practice 27(4),383–396.

Stewart, J., and J. McGoldrick (1996). Human Resource Development: Per- spectives, Strategies and Practice .London: Pitman Publishing.

Storey, D. J. (1994). Understanding the Small Business Sector . London:Routledge.

Upton, N., E. J. Teal, and J. T. Felan(2001). “Strategic and Business Plan-ning Practices of Fast-Growth Family Firms,” Journal of Small Business

Management 39(1), 60–72. Westhead, P., and D. Storey (1996). “Man-

agement Training and Small Firm Per-formance: Why the Link is Weak,”

International Small Business Journal 14(4), 13–25.

——— (1997). Training Provision and the Development of Small and

Medium-Sized Enterprises. DfEE Pub-lications Research Report No. (26).London: DfEE/HMSO.

Wilkinson, A. (1999). “Employment Rela-tions in SMEs,” Employee Relations 21(3), 206–217.

Wrag, D. (1996). “Paternalism and itsDiscontents, A Case Study,” Work,

Employment and Society 10, 701–715.



Documents

Employee Training in SME