The Role of Human Resources in the Success of New Businesses

Abstract

Factors associated with business success have been pervasive topics in the entrepreneurship literature for decades and have addressed all functional areas of business, such as marketing, finance, and production (Bruno, Leidecker, & Harder, 1987; Terpstra & Olson, 1993). Business Resources are usually categorized in three groups: physical, organizational, and human (Koch & Kok 1999). The human resource has long been identified as critical, and in particular the experience of management, by affecting the other resources and functions to achieve success (Penrose, 1959, p. 5). Therefore, this paper considers specific factors in one functional area-human resources (HR) - and examines relationships to several key organizational attributes. This paper is based on a survey of firms involved in technology environments because new businesses in this sector are often seen as the engines in the so-called new economy and their distinctive human capital needs and composition may help determine their growth or failure.

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