The Alignment Between Hrm Practices And Strategic Capabilities Of Smes

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The main objective of this article is to use Gestalts perspective to analyze the alignment between HRM practices and strategic capabilities of SMEs. According to Meyer et al, they explained that management systems and organization structure are best understood in terms of overall. Patterns rather than in terms of analyses, and it narrowly drawn sets of organizational properties. The article looks in to internationalization of market, market pressure, rise of modern technology in 1990s affect the success of an organization and this bring about a change in business strategy. All business organization tried join with another firm to come up with new design and new product in order to meet the competition in the market. This change led to complexity of human resource management and it requires all the companies to implement HRM practices to mobilize attract and keep employees competence.

However, the author tried to make emphasis on the practice of HRM in an organization, HRM practice help to increase productivity, improve profitability and employee retention. There had being many research done on HRM practice or the determinate of the practice of HRM but there has not being many done on HRM focusing on SMEs, so this article tried to research on HRM focusing on SMEs using Gestalts approach. This Gestalts approach has rarely been use in HRM, this Gestalts approach that was used in this article aim to answer some question about HRM practice of SMEs. A gestalt is understood to be a frequently observed combination of various attribute of an organization (Miller, 1981, 1996; authors look in to conceptual framework and analysis it in this research.

Article summary

The authors have conducted this research in Canada manufacturing companies using Gestalts perspective to analyze the alignment between the HRM practices and strategic capabilities of SMEs. SMEs manufacturing in Canada have adopted different approaches of HRM to identify the strategic variable. Never the less, companies must be flexible in managing internal changes that are related to their resources (human, technological, financial) and their organization. Authors done the evaluation through the data surveyed of 176 Canadian manufacturing SMEs, whose size is from20 to 249 employees was made to answer these questions and found that degree of these firms’ HRM practices were analyzed in conjunction with their strategic capabilities in area of products, markets and networks of collaboration, from a Gestalts perspective. Authors recommended that, to reach the successful stage, the company need to keep more efforts on maintaining the HRM process at all level for the company to keep improving in the area of product, good employees and so on.

The article illustrated that organization are created by resolving three management problem; administrative problem, entrepreneurial problem, and engineering problem, so the search for the solution to these three management problem give birth to adaptive cycle. The solution to engineering problem is argued by selecting the appropriate technology to produce product and services, while the solution to administrative problem is rationalizing the organization’s structure and processes to reduce uncertainty and lastly is entrepreneurial problem and the solution is by making choices relating to product or services. The empirical studies of SMEs confirm the existence of relationships between HRM practices and level of strategic development, such as product and market development, and this involve in collaboration of networks.

The data on HRM practice on strategic development product and the market development on the SMEs performances were obtain from the database of PDG which was set up by university research center; this database contains 300 Canada manufacturing companies, more than 850 general and financial variables, obtained from a survey questionnaire to which the respondents sign their companies financial statement for the last five years. The companies contacted directly to provide this information to exchange comparative diagnosis of their overall situation in terms of vulnerability and companies’ performance. Gestalts perspective is chosen among set of theoretical attribute, these attribute consist of four strategic business capacities that is, product development, market development, network development, and HRM development. Gestalts perspective is trying to find frequently recurring of attribute or Gestalts instead of seeking linear relationship.


This article is very useful for all companies and organization. The article tried to introduce another way of analyze the alignment between the HRM practices and strategic capabilities of SMEs. These authors were able to find five components in this research and they use alpha reliability coefficient to analysis the five component of HRM, because of the exploratory nature of the factor analysis, and this work well in identifying organizational Gestalts in the matter of HRM. The article group the organization into cluster and each is highly homogenous and attribute, the use of group rather than individual practice reduce the number of clustering variables and it increase the potential for the homogeneity among the clusters , it provide more to charity in the interpretation of the clusters. The cluster used in the methodology help to distinguish itself by greatest emphasis on the motivating component of HRM. This show emphasis on informing and training component of HRM and the result demonstrate that HRM practice vary in relation to other element in strategic context. The practices are very in relation to the strategies of product, market and network development adopted by manufacturing SMEs. The emphasized product and network development, world-class SMEs invest more in information and training practices. However, increased application of HRM

Practices related to motivation performance appraisal, incentive compensation according to the findings provide more support to the market development or internationalization strategy that was implemented by international SMEs. Gestalts must be looked at as overall patterns of relationships between different parts of a whole, one can say that the local, international, and world class groups of SMEs use three different paths for competing in their respective environment.


An article contributes the new way of thinking and to look at a problem. As per mentioned, the top management at selected company (for research) has declared to give huge supports for HRM practice. In the actual sense, HRM process played the important role in Canada manufacturing system. Understanding the concept and process of Gestalts from all level of HRM and SMEs is very necessary to make the entire manufacturing companies in to consideration.

In the conclusion page an article also mentioned that the main finding show that evidence is given to support the principle that SMEs integrate HRM considerations with company-wide strategic development and the principle change into action through HRM policies and practices. It is known that SMEs are highly adaptable and flexible to change. However in businesses there must be improvement in competency and the companies must increase their HRM capacity without stop so an organization will always need the researcher to look into problem or find more about the things to improve their development.


Overall overview, the theories in this article is applied to any organization or companies. Nowadays, many of industries were interested in the improvement of their HRM capacity so this research show another way which has not being done before to analysis the alignment between HRM practices and strategic capabilities of SMEs. This is to create competitive advantages through continuous improvement activities.

Gestalts perspective is another research work that will help the businesses in checking their HRM competency and development; this is why Gestalts approach is always applicable. Ideas that authors mentioned in this article was never changed even something was accidently change.

Critique; As noted that the authors have used Gestalts perspective to analysis the alignment between HRM practices and strategic capabilities of SMEs may look effective in its capacity to describe the role of the HRM function. But the firms surveyed are not adequately representing Canadian Manufacturing SMEs, it is important for them to understand the different types of manufacturing SMEs that are dealing these issues, be it local or world class, in order to support them appropriately. The research has implication on the researchers because they Gestalts must constitute a valid theoretical foundation to investigate human resources management problem for manufacturing SMSs. Nevertheless, this research has allowed for a better understanding of the multiple HR systems adjustments that must be made by manufacturing SMEs under the new constraints imposed by globalization.