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The Interrelationship between HR, Strategy and Profitability in Service SMEs: Empirical Evidence from the UK Tourism Hospitality and Leisure Sector

Andreas Georgiadis and Christos Pitelis

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: We investigate the strategies, HR attributes and their synergies that are associated with superior performance in service SMEs using data from the UK Tourism Hospitality and Leisure (THL) sector. A major advantage of our analysis is that our sample includes information also on very small firms which makes results representative of the industry but also sheds light on a very little investigated area related to the nature of HRM and its link with performance of micro businesses. Our results suggest that high-performing SMEs in the THL sector are managed by more experienced entrepreneurs. Moreover, they employ a combination of technological and know-how firm differentiation strategies together with a highly skilled workforce, and/or a combination of (product) differentiation strategies based on quality of service and personal attention to customers, and a generous compensation package and attention to employees development.

Keywords: Value capture strategies; Human capital; Organisation Commitment to Employees; Profitability (search for similar items in EconPapers)
JEL-codes: J2 (search for similar items in EconPapers)
Date: 2010-03
New Economics Papers: this item is included in nep-cse, nep-hrm and nep-tur
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Working Paper: The interrelationship between HR, strategy and profitability in service SMEs: empirical evidence from the UK tourism hospitality and leisure sector (2010) Downloads
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