The dual pressures of youth and expansion: Revisiting stage theories of growth in SMEs

Purpose: The authors consider stage theories of human resource management (HRM) to explore how new companies experiencing high levels of growth face the dual pressures of youth and expansion. Design/methodology/approach: The firms in this study are a sub-group of small and medium enterprises (SMEs) called “gazelles”. While this is a qualitative study, participants were chosen through a modified random sampling approach that ensures that the sample is representative of a regional population of gazelle firms. Findings: New companies experiencing high levels of growth face the challenge of expansion while structurally immature. While the selected companies were ill-equipped in formal knowledge of HR they reacted to rapidly changing conditions and were forced to organisational flexibility meaning that few absolute rules were adopted. Originality/value: Gazelle literature tends to focus on impediments to growth, rather than HR staples such as recruiting and retaining staff. But the studied cases showed an acute appreciation by gazelle managers of the value of motivated, skilled staff able to turn their hand to the fluctuating requirements of the fast-growing firm and a desire to establish formal HR mechanisms as part of the response to the stress of growth.