Human resource management practices by SME owners in Ghana : factors constraining success and how they could be addressed

  • Vida Osei

    Student thesis: Professional Doctorate


    Private sector development has, of late, become one of the major factors that have assumed a central position in the economic development program of several African countries, with Ghana not an exception. Ghana’s private sector business is dominated by small- and medium-sized enterprises (SMEs),making the development of SMEs very crucial to the nation’s economic growth. Evidence is seen in countries like Malaysia and Korea which through the development of their respective SME sectors are currently among the fast growing economies in the world (AGI,2008:37). The Government of Ghana, donor communities, and other institutional bodies have put in various supports to develop the sector to enhance economic growth. However, such supports have yielded a result below expectation. Within this sphere, the importance of human resource management (HRM) to the success and growth of SMEs in Ghana cannot be overlooked since most issues serving as barrier to economic development are human-based. Human beings are the mechanisms which make enterprises run to enhance economic development, an issue that makes HRM very essential to enterprise survival and growth (see, for example McEvoy,1984; Chandler & McEvoy,2000; Rauch & Frese,2000; Cardon & Stevens,2004; Hargis & Bradley,2011; Noe et al.,2011). However, HRM practices serve as tools through which HRM functions to enhance the development, success, and growth of enterprises, leading to economic success (see, for example,Huselid,1995; MacDuffie,1995; Delery & Doty,1996; Koch & McGrath,1996; Guest,1997; Huselid et al.,1997; Noe et al.,2011). This study suggests that effective HRM practices within the SME sector of Ghana may contribute to accelerating the growth of the sector and the economy of Ghana at large. Studies on SMEs in Ghana have focused on the sector as an income generating activity area for the people, and survival mechanism for the economy (see, for instance,Arthur,2007). However, such studies frequently mentioned availability of raw materials, low cost of production inputs, and financial adequacy as the way to accelerate development, success and growth of the SME sector. The studies paid less attention to the role human resource (HR) could play to deliver success to the sector. This thesis was tasked to contribute to the existing body of research on HRM practices by SMEs in developing countries with its focus on Ghana. It argued that if there could be any significant economic growth in Ghana, effective HRM practices could be one of the key contributors. A search into the available literature on HRM practices by SMEs in Ghana gave very scanty information. However, this did not mean that the sector under consideration in this study had nothing in place for HRM practices. The main aim of this thesis was to explore the HRM practices employed by the SME sector of Ghana to know the type of HRM practices the sector employed, how and why such choices were employed, and highlight on constraints faced in the execution of such choices of HRM activities. After conducting a review of literature on related studies and compiling other secondary data, the study employed qualitative strategy, using face-to-face semi-structured interview to explore HRM practices by a sample of SME owners in Ghana. The interview was conducted on 30 SME owners in Ghana, who fell under the definition of SMEs in the context of Ghana. A theoretical framework was developed from existing HRM models to guide the study. The derived theoretical framework helped in the selection of themes, setting of interview questions, analysis of the data gathered, as well as the discussion of the findings of this thesis. The analysis of the data revealed that the SME owners in Ghana, who participated in this study, had HRM practices in place. However, they employed informal methods in the deployment of their choices of HRM practices, which cropped up a number of problems, contributing to their ineffectiveness to grow and enhance the economy. Findings also seemed to suggest that the gender imbalances in most workplaces in Ghana, causing enterprise owners to prefer a particular gender sex, could not be wholly attributed to the traditional gender stereotyping that existed within the recruitment / selection, placement, and promotion methods by enterprise owners. It brought to light that the unwillingness of a particular sex to accept certain categories of job offers also cropped up gender stereotyping. The result further indicated that the HRM practices by participants were influenced by the socio-cultural practices in Ghana, as well as the size and profitability of the enterprise. The result of the study was in conformity with findings from similar studies on HRM practices by SMEs in other countries such as Zakaria (2011),El-Kot & Leat (2007),Okpara & Pamela (2008) and Al-Jabari (2011). However, the findings were less supportive to the theoretical framework guiding the study. This was because, whereas the model guided towards the use of effective and efficient HRM practices to achieve the set objectives of the enterprise to enhance economic growth, the findings revealed that participants mostly delighted in the use of informal HRM practices. This often cropped up lot of problems, which coupled with the challenges they were faced within the external business environment, affected the growth of their respective enterprises negatively. It is left to say that the findings and discussion of the study were based on the information given by the 30 participants of this study. The study has contributed to the existing knowledge on HRM practices by bringing to light the type of HRM practices engaged in by the SME owners in Ghana who participated in this study, how and why such choices were made, and the constraints encountered in the deployment of such practices. It has brought to light how such practices affected the growth and success of the SME sector in Ghana. It has also added to the existing HRM models a theoretical framework that can be improved upon and used in future research. Recommendations were given to help the practicing of effective HRM within the enterprises which participated in this study, and the SME sector in Ghana as a whole, which may promote enterprise success to enhance economic growth.
    Date of Award2017
    Original languageEnglish
    SupervisorAnni Dugdale (Supervisor), Wahyu Sutiyono (Supervisor), Doug Davies (Supervisor) & Yongqing Fang (Supervisor)

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