TRANSFORMING ORGANISATIONS INTO ENTREPRENEURIAL COMMUNITIES: HOW CAN UNDERSTANDING THE CONSTRUCTIONS OF ORGANISATIONAL AGENTS AND THEIR EXPERIENCES OF HUMAN RESOURCE MANAGEMENT ENABLE SMES TO SUSTAIN STRATEGIC ENTREPRENEURSHIP?

Abstract

It has been recognised that where entrepreneurship is adopted at a strategic level it can lead to continuous improvements in organisational performance. The United Kingdom (UK) is currently leaving the European Union, which it is anticipated will result in economic decline. Small to Medium-sized Enterprises (SMEs) comprise 99.9% of private sector organisations within the UK and so have significant potential to mitigate or reverse any such decline. However, in recent years varying proportions of such organisations have reported that they lack people management skills. Yet organisations’ Human Resources (HR) provide the main source of entrepreneurship within existing organisations. Growing bodies of research have developed that seek to explain what entrepreneurship is and the relationships between Human Resource Management (HRM) architecture and levels of entrepreneurial activity. However, various criticisms have been levied against these.

Against this background, the aim of this study is to examine how strategic entrepreneurship within SMEs is influenced by the perceptions and behaviours of organisational agents, specifically in relation to their construction of the meaning of entrepreneurship and reactions to the HRM architecture. An ethnographically influenced multiple embedded case study methodology was adopted. Data was collected from owner-managers, line managers and non-managerial employees within five UK-based SMEs through semi-structured interviews and observations, supplemented with secondary documents.

A thematic analysis of the data revealed several notable findings. Firstly, the points of reference used to construct the meaning of entrepreneurship limit the extent to which the shared vision necessary for strategic entrepreneurship can be achieved. Secondly, entrepreneurship was represented by individuals displaying certain characteristics and a cyclical, system of events driven by emotional states influenced at key points by the HRM architecture. Thirdly, it was not just the characteristics of the HRM architecture but the association of those characteristics with specific elements of the architecture that affected levels of entrepreneurship. Some combinations could universally enable or inhibit entrepreneurship, whilst the effects of others were contingent on contextual factors.

These findings have implications for both theory and practice. Five new conceptual frameworks or event-state networks derived directly from empirical data are presented that more precisely demonstrate how the external and internal environments of organisations, individual characteristics, emotion and/or HRM interventions influence the development of strategic entrepreneurship within SMEs. These may assist government decision-makers and those involved in the management of SMEs to make more informed judgements with regards to how they stimulate or control entrepreneurial activity.