Chronic Underfit of the Small Firm’s HRM Function: When Low Functional Elaboration Interacts with Contingencies

Abstract

We address qualitative functional elaboration of human resource management (HRM) in small firms where HRM is typically simple and informal. After describing qualitative functional elaboration in terms of structuration, managerial process, and effects on HRM, we discuss relevant contingencies that can render small-firm HRM’s degree of elaboration insufficient relative to firm needs and goals. We then discuss implications of chronic underfit of HRM in small firms, drawing on theory of asymmetric effects of misfit. Finally, we discuss implications for future research, practice, and entrepreneurship education.