THE IMPORTANCE OF HUMAN RESOURCE MANAGEMENT IN THE DEVELOPMENT OF SMALL BUSINESSES

Abstract

This study examines the critical role of organizational structures in effectively managing human resources (HR) within entrepreneurial organizations, with a focus on small business development. The research addresses the problem of inefficient HR management practices often found in startups and small enterprises due to a lack of structured frameworks. The aim of the study is to explore how well-designed organizational structures can optimize HR functions, enhance employee performance, and drive business growth.

Using a mixed-method approach, including qualitative case studies and quantitative surveys, the study investigates various organizational models in small entrepreneurial firms. Key findings suggest that businesses with clear HR roles, hierarchical clarity, and decentralized decision-making processes outperform those with informal or unclear structures in terms of employee engagement and retention. The research highlights the need for small businesses to adopt flexible yet well-defined HR structures to foster innovation and sustainable growth.

The implications of this study emphasize the importance of HR management as a strategic tool for entrepreneurial success, providing actionable insights for small business owners, HR professionals, and policymakers seeking to improve business outcomes through enhanced organizational design.