Chapter 1: Why Human Resource Management Differs in Entrepreneurial and Established Firms: Theoretical Foundations

Although there has been recognition that human resource management practices in entrepreneurial firms are fundamentally different from those in established firms, there is limited understanding as to why human resource management practices differ in entrepreneurial and established firms. More specifically, the chapter suggests that unlike established firms, entrepreneurial firms operate under conditions of uncertainty. The implications of these uncertain conditions are discussed. The objective of the chapter is to stimulate research and discussion regarding why human resource management differs in entrepreneurial and established firms. To provide a starting point for such discussion, the chapter draws on the entrepreneurship and economics literatures to begin to articulate a theoretical basis for potential differences in human resource management.