HRM Practices in Internationalised SMEs and Their Sales Growth under Different Environmental Conditions

Objective: This paper explores the patterns of human resource management (HRM) adopted by internationalised small and medium-sized enterprises (SMEs) and their business outcomes with respect to changing external contingencies. More specifically, it examines the link between HRM and sales growth under two different conditions: the relatively stable pre-pandemic period and the highly uncertain first year of the COVID-19 pandemic. Research Design & Methods: Data stems from structured interviews with key decision-makers representing 200 Polish-based SMEs operating internationally. Methods of data analysis include k-means clustering, one-way and two-way mixed ANOVAs. Findings: Cluster analysis revealed four distinctive patterns of HRM adopted by internationalised SMEs. The significant interaction effect suggests that with changing environmental conditions specific patterns of HRM adopted in these firms contributed to sales growth in different ways. Implications / Recommendations: The study revealed that environmental shock can both dampen and enhance the contribution of HRM practices to sales growth in internationalised SMEs, depending on their initial mix and intensity of use. Contribution: The study contributes to the development of a configurational perspective in HRM research within internationalised SMEs. It demonstrates that multiple pathways can lead to positive outcomes, although not all are equally effective, especially when exogenous factors change dramatically. Thus, it highlights the importance of the external environment in moderating the link between HRM and business performance in these firms.