HRM in small firms: owner-managers as line managers

This chapter considers how the concept of line managers and human resource management (HRM) plays out in small firms. It argues that strategic human resource management theory that posits an internal human resource (HR) specialist designing practices that are devolved to line managers for implementation does not hold good in this context. This results from lack of an internal HR department and an absence of a professional line management structure. Instead, small firms are run by owner managers, who often lack any HR knowledge or experience. Here we demonstrate why this matters and how owner managers may differ to larger firm line managers in their approaches to HRM. We then proceed to discuss what mechanisms are available to support implementation of HR practice in small firms, arguing that external support services can fulfil the role of an internal HR department. Finally, we consider why, or why not, small firms might engage with these services and some possible outcomes. We conclude with avenues for future research and implications for policy, theory and practice.