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Commitment or control?

Human resource management practices in female and male-led businesses


Ingrid Verheul
Centre for Advanced Small Business Economics Erasmus University Rotterdam / Faculty of Economics P.O. Box 1738 3000 DR Rotterdam The Netherlands Tel. +31 10 4081398 verheul@few.eur.nl and EIM Business and Policy Research P.O. Box 7001 2701 AA Zoetermeer The Netherlands Tel. +31 79 3413634 ive@eim.nl

Version: January 2003 Keywords: gender, entrepreneurship, human resource management, commitment, control Acknowledgement: The author would like to thank Paul Boselie, Jan de Kok, Gavin Reid, Heleen Stigter, Roy Thurik, Lorraine Uhlaner and Claartje Vinkenburg for their helpful comments. Ingrid Verheul acknowledges financial support by the Fund Schiedam Vlaardingen e.o. and the Trust Fund Rotterdam. Abstract: This paper investigates the extent to which HRM differs between female- and male-led businesses. A Control-Commitment Continuum consisting of several HRM dimensions is proposed. To test to what extent HRM systems and specific practices in female- and male-led businesses differ with respect to commitment-orientation, use is made of a panel of approximately 2,000 Dutch entrepreneurs. Contrary to what is generally believed, we find that HRM in female-led firms is more control-oriented than in male-led firms.

Introduction

Research in the field of human resource management (HRM) has demonstrated that the shaping of HRM practices depends upon factors, such as the sector in which activities are undertaken (Mowday, 1998; Ram, 1999; Curran et al., 1993), business strategy (Schuler and Jackson, 1987; Lengnick-Hall and Legnick-Hall, 1988; Youndt et al., 1996) and firm size (De Kok and Uhlaner, 2001; Ram, 1999). Small firms usually face impediments to structuring HRM practices because they lack the time, money and employees to formalize these issues (Hornsby and Kuratko, 1990; Deshpande and Golhar, 1994; Marlow and Patton, 1993; Jackson et al., 1989; De Kok and Uhlaner, 2001). In many small businesses functional areas, such as finance, marketing and production, seem to have precedence over HRM (McEvoy, 1984). There is also variation within the small business sector. As Nooteboom (1993, p. 287) argues: It is always a delicate matter to make general statements about SME, because its diversity may be its most important characteristic. This diversity counts especially when comparing the organization of the businesses of female and male entrepreneurs. Because women and men have a different profile, e.g., they differ regarding educational and experiential background, risk attitude and time invested in the business (Verheul and Thurik, 2001), they may be expected to differ regarding the management of their business, and human resource management in particular. Although researchers in the field of entrepreneurship have shown that female entrepreneurs differ from their male counterparts in areas, such as motivation for start-up (Buttner and Moore, 1997), performance (Kalleberg and Leicht, 1991; Gundry and Welsch, 2001) and finance (Carter and Rosa, 1998; Verheul and Thurik, 2001) and their number has increased in the last decades few studies have focused upon gender differences in small business management (Brush, 1992; Carter, 1993). Even fewer studies have attempted to shed light on

gender differences in HRM (Verheul et al., 2002). A study by Verheul et al. (2002), using data of 28 real estate agents, shows that gender differences in HRM indeed exist. Several types of studies can be distinguished when comparing management styles of women and men. The management literature generally provides inconclusive evidence regarding the question whether women and men are different managers or leaders. In the scientific management literature (Gilligan, 1982; Ely, 1994; Grant, 1988) as well as in the popular management literature (Helgesen, 1990; Rosener, 1990, 1995; Loden, 1985) it is argued that women and men adopt different management styles. Others claim that, when controlling for the context within which women and men run their business, the ways in which they behave are fairly similar (Dobbins and Platz, 1986). A different, but related, discussion surrounds the question whether a distinction can be made between masculine and feminine management styles, where both women and men can adopt masculine or feminine styles (Van Engen, 2001). Most research investigating gendered management styles focuses on large businesses. The present study explores gender effects in HRM in small businesses. We argue that gender can have both a direct and an indirect effect on HRM (Figure 1). In addition to gender, other factors can influence the shaping of HRM practices, including firm size, sector, goals and strategy and firm age. In Figure 1 these factors are referred to as the business profile. We take these factors into account in the present study, i.e., the business profile is controlled for, because gender can be expected to influence the factors making up the business profile (Verheul and Thurik, 2001). Figure 1: Gender and HRM

Business profile Gender HRM


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Several perspectives have been used to compare HRM practices, including the extent to which they contribute to increased firm performance (Guest, 1997; Huselid, 1995; Huselid et al., 1997; Ichniowski et al., 1997; Koch and McGrath, 1996; Paauwe, 1998) and level of sophistication (Arthur and Hendry, 1990; Deshpande and Golhar, 1994; Duberley and Walley, 1995; Hornsby and Kuratko, 1990; Koch and McGrath, 1996; Marlow and Patton, 1993). As noted by Boselie (2002, p. 40) there are also different approaches to studying commitment and control, including the focus on structure (Mintzberg, 1979; Verburg, 1998; Paauwe, 1989), culture (Legge, 1995), strategy (Walton, 1985) and HRM (Arthur, 1994). Following Boselie (2002), and making use of the work of Beer et al. (1984), Walton (1985) and Arthur (1992; 1994), in the present study a distinction is made between those HRM practices that focus upon enhancing employee commitment and those practices that increase control of the owner-manager over employees and the production process. These two aspects of HRM practices are considered the extremes on a continuum, where HRM practices tend to be either more commitment- or more controloriented. The research question in this study is whether HRM practices in female and male-led businesses differ on the Control-Commitment Continuum. Hypotheses are formulated on the influence of gender on both the HRM system and a range of HRM dimensions. These hypotheses are tested using SME Policy Panel data of EIM Business and Policy Research in Zoetermeer in the Netherlands. Every four months approximately 2,000 Dutch entrepreneurs participate in this SME Policy Panel which is used for both cross-sectional and longitudinal research. The set-up of the present paper is as follows. Section 2 focuses upon the Control-Commitment Continuum as first proposed by Walton (1985) and put in the context of HRM in studies by Arthur
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(1994), Godard (1998) and Boselie (2002). Several HRM dimensions on the Control-Commitment Continuum are specified, which are operationalized in the empirical study. In Section 3 attention is paid to the influence of gender and other factors on HRM. Hypotheses are formulated on the influence of gender and the business profile on both the HRM system and a range of HRM dimensions. In Section 4 data and methodological issues are discussed. Making use of factor analysis HRM variables are constructed that are used for further analyses. In Section 5 correlations between dependent and independent variables in the study are investigated. The hypotheses are tested, making use of regression analysis techniques, and the results are discussed. Section 6 concludes, summarizing and discussing the most important findings and giving suggestions for further research. In addition, the limitations of the study are discussed.

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2.1

The Commitment-Control Continuum


Commitment versus Control HRM Systems

The distinction between commitment and control can be traced back to McGregors (1960) Theory X and Y, referring to the tension between the instrumental rationality of bureaucratic systems and the affective needs of employees or the need to achieve both control and consent of employees to maintain or improve performance (Legge, 1995)1. Other classifications that show some resemblance to the control and commitment dichotomy are autocratic versus democratic decision-making (Lewin and Lippitt, 1938), task-oriented versus interpersonal oriented styles (Bales, 1950; Blake and Mouton, 1964), transactional versus transformational leadership (Bass et al., 1996), direct control versus responsible autonomy (Friedman, 1977), Tannenbaum and Smiths (1958) continuum (tell-sell-consultjoin) and the categories of employer control (fraternalism-paternalism-benevolent autocracy-sweat shop) proposed by Goss (1991). These management modes either emphasize maintenance of tasks

through direct forms of control or nurturing of interpersonal relationships through indirect or selfcontrol of employees (Van Engen, 2001). Walton (1985) explicitly proposes the distinction between commitment and control strategies and this distinction is further elaborated in the context of HRM by other authors (Guest, 1987; Arthur, 1992, 1994; Legge, 1995; Godard, 1998). Commitment and control are two distinct ways in which employee behaviors and attitudes can be influenced (Arthur, 1994). Given the assumption that HRM consists of a series of internally consistent HRM practices, which combine into a specific HRM system, it can be argued that HRM systems are either control- or commitment-oriented. Control HRM systems are characterized by a division of work into small, fixed jobs for which individuals can be held accountable, and direct control with managers supervising rather than facilitating employees (Walton, 1985). This type of HRM system aims at reducing direct labor costs, or improve efficiency, by enforcing employee compliance with specified rules and procedures (Walton, 1985; Eisenhardt, 1985). In contrast, commitment HRM systems are characterized by managers who facilitate rather than supervise., i.e., there is indirect control. This type of HRM system aims at establishing (psychological) links between organizational and personal goals. Commitment here is seen as an individuals bond with an organization, i.e., attitudinal (affective) commitment. Establishing a link between employee commitment and firm performance, through behavioral commitment, is not within the scope of the present paper. Boselie (2002, p. 40) argues that in most cases the issue of control versus commitment is dominated by ethical considerations, the authors treating commitment as deirable and control as unwanted. In addition, according to Boselie (2002), commitment fits in with the values of a modern

For a detailed discussion of the origin of the distinction between control and commitment we refer to Boselie (2002). 6

(Western) society2. Using a normative approach, Guest (1987, p. 513) argues that: committed employees will be more satisfied, more productive and more adaptable. In this study we take a descriptive approach rather than a normative approach as we attempt to catagorize HRM practices and do not pass judgement on which approach has precedence over the other. 2.2 Dimensions of the Commitment-Control Continuum

In the present paper a distinction is made between HRM practices that can be labeled approximately as control- or commitment-oriented. As the basis for this study we use the dimensions of the traditional versus high-commitment work system as proposed in Beer et al. (1984). Following Walton (1985), Arthur (1994) and Boselie (2002) these two work systems are labeled control and commitment HRM systems, respectively. According to Arthur (1994) control HRM systems focus on cost reduction, or improvement of efficiency, whereas commitment HRM systems emphasize employee development and trust. The HRM systems are bundles of coherent HRM practices, characterizing the strategic HRM approach (Boselie, 2002). Because HRM practices usually do not add up to a coherent system (Duberley and Walley, 1995; Legge, 1995; De Kok et al., 2002), in the present study we distinguish between a range of dimensions of the HRM system. Table 1 presents the distinction between control and commitment HRM systems we use as the basis for our study. It is a continuum where the HRM dimensions (e.g., job scope, task assignment, etc.) differ with respect to their commitment-orientation. The selection of HRM dimensions presented in Table 1 is a combination of the dimensions as presented in Beer et al. (1984) and Arthur (1992; 1994). We also include the distinction between formal and informal HRM systems, representing the degree to which
The Western world is also changing. Audretsch and Thurik (2000; 2001) refer to a change from a managed to an entrepreneurial economy. Such a shift is likely to bring about a change in the nature of the employment relationship (Klein, 2001). The modern economy is characterized by an increasing importance of small firms. Commitment may play a different role here than in large firms. Moreover, Meyer et al. (1998) argue that commitment is not viewed the same way it was when
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procedures and regulations are formalized. The higher the degree of formalization, the higher the degree of (direct) control over employees and the production process. Most dimensions in Table 1 can clearly be divided into a control and commitment side. For instance, indirect supervision is a commitment feature, whereas direct supervision is a control feature. However, explicitly paying attention to the learning process of employees can enhance both commitment employees are involved and willing to make efforts for the organization and control learning is a tool for successfully pursuing cost reduction (Boselie, 2002).

Table 1: Commitment-Control Continuum HRM Dimension Job scope Task assignment Supervision Organizational structure Learning Training Employee role Information sharing Status Employee participation Decentralization Social activities Basis of payment Commitment Broadly defined jobs Task differentiation Indirect Informal Structured learning (explicit) General Team member Global (firm) information Not important High High Important Skills mastered Control Narrowly defined jobs Fixed tasks Direct Formal Learning-by-doing (implicit) Specific Individual Local (task) information Important Low Low Unimportant Job content

Source: adapted from Beer et al. (1984) with input from Arthur (1992; 1994) and Boselie (2002).

employees could spend their entire career with a single company. Some argue that commitment is losing its importance in the modern economy (Baruch, 1998), others suggest that commitment is more important than ever (Mowday, 1998). 8

Determinants of the Commitment-Orientation of HRM

Management styles tend to be contextual. They vary with environmental characteristics, e.g., stability versus uncertainty, as well as organizational features, such as firm size, industry or sector, business strategy and firm age or stage of development (i.e., the business profile). The present study assumes an interaction of gender, the business profile and HRM (see Figure 1). In the empirical analysis we will control for the business profile characteristics to single out the direct gender effect3. The influence of gender and each of the business profile characteristics on the extent to which HRM systems are commitment- or control-oriented is discussed and hypothesized below. HRM systems are comprised of several HRM dimensions (see Table 1). Because these HRM dimensions are close to the practice of HRM, in the present paper we will use the terms practices and dimensions interchangeably. According to the strategic HRM perspective, the HRM practices within a system should have a similar focus. However, in most organizations HRM practices do not add up to a coherent package deriving from a long-term coherent management strategy (Duberley and Walley, 1995, p. 905). Hence, in addition to testing for a gender effect on the general focus of the HRM system, we test for gender effects on eight of the 13 HRM dimensions as outlined in Table 1. These eight dimensions are chosen because they are covered by the data set at our disposal (see Section 4). For the remaining dimensions no data are available. Accordingly, nine hypotheses are formulated on the influence of gender on the commitment-orientation of HRM, one referring to the commitmentorientation of the HRM system and eight referring to the commitment-orientation of the separate HRM practices within the system. Although the main focus is to investigate the influence of gender on HRM, hypotheses are also formulated on the influence of each of the controls (i.e., business profile

The direct gender effect equals the effect of gender on HRM when controlled for the business profile. For a more detailed discussion of direct and indirect gender effects we refer to Verheul and Thurik (2001). 9

characteristics) on the commitment-orientation of the HRM system as this benefits the discussion of the results. 3.1 Gender Differences in HRM

Gender and the HRM system Many authors refer to more instrumental (transactional), task-oriented, autocratic styles, explicitly as masculine leadership styles, and to interpersonally oriented, charismatic (transformational) and democratic styles as feminine leadership styles. Whereas the masculine style often refers to a leadership style that emphasizes maintenance of tasks, the feminine style is based on nurturing of interpersonal relationships (Van Engen, 2001)4. A management style is referred to as participative or democratic if employees are consulted and are able to participate in decision-making. If elements of consultation and delegation of decisions are not present, a management style is referred to as autocratic (Lewin and Lippitt, 1938). A management style is transactional when job performance is viewed as a series of transactions with employees where they are motivated by rewards and punishments, and where the leader derives his/her power by charisma. Instead, a transformational leadership style focuses upon getting subordinates to transform their selfinterest into the interest of the group through concern for a broader goal, i.e., motivation by inclusion, and leader power is based on position (Bass, 1985). An interpersonally oriented leadership style includes behavior such as supporting employees, being available, explaining procedures and looking out for their welfare, whereas a task-oriented leadership style consists of behavior such as having employees follow rules and procedures, maintaining high performance standards and explicitly formulating work roles and tasks (Bales, 1950; Blake and Mouton, 1964). Rosener (1990) argues that

It should be born in mind that this is stereotyping and that the dichotomies of leadership styles do not necessarily coincide with biological sex. 10

the female leadership style goes beyond the transformational and participative style, to being an interactive style, with women positively interacting with their employees, encouraging participation and sharing power and information. In addition to these leadership dichotomies, sometimes another style, laissez-faire, is added indicating an absence of leadership (White and Lippitt, 1960). Although the bulk of the management and entrepreneurship literature indicates that women tend to engage in the more feminine leadership styles (Rozier and Hersh-Cochran, 1996; Rosener, 1990; Chaganti, 1986; Eagly and Johnson, 1990; Kabacoff, 1998; Yammarino et al., 1997; Bass et al., 1996), contradicting evidence was presented by Sadler and Hofstede (1976) arguing that both men and women prefer a consult style and Mukthar (2002) who finds that female owner-managers are more autocratic. This latter finding may be explained by the fact that because women tend to combine work and household responsibilties, their ambitions are different from those of men. They are less likely to grow beyond a certain treshold size, beyond which they can no longer control their activities and combine responsibilities5. Based on the bulk of the literature arguing that women are likely to practice feminine leadership styles, and because these participative, transformational or people-based styles bear a close resemblance to the commitment-oriented HRM system, we expect that HRM systems in female-led businesses are commitment-oriented rather than control-oriented. Despite some counterintuitive findings the following hypothesis is formulated: H1: HRM systems in female-led businesses are more commitment-oriented [COMMITM] than those in male-led businesses Gender and HRM dimensions In addition to the general focus of the HRM system in female-led businesses (as hypothesized in H1), the influence of gender on the commitment-orientation of the separate HRM dimensions will be

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discussed to create a better insight into the composition and coherency of HRM systems in female- and male-led businesses. Hypotheses are formulated using a selection of the dimensions of the Commitment-Control Continuum as represented in Table 16. Hypotheses are based on the literature and, where no theoretical evidence is available, we assume that HRM practices will be in line with the general commitment-orientation of HRM systems in female-led businesses, as hypothesized in H1. Several studies find that female managers are more likely to let employees participate in decisionmaking (Cromie and Birley, 1991; Neider, 1987; Stanford et al., 1995; Jago and Vroom, 1982). Verheul et al. (2002) argue that although both men and women let employees participate in decisionmaking, the degree to which employees are able to contribute is dependent upon the gender of the entrepreneur. Although male entrepreneurs let employees participate in decision-making, they usually make the final decisions themselves. Female entrepreneurs are assumed to be more likely to involve employees throughout the decision-making process. According to Jago and Vroom (1982, p. 781): Women managers may be more likely to recognize the need for commitment to decisions by others and this may cause them to take appropriate measures to obtain that commitment in the decisionmaking process. Because the existing literature indicates that employee participation is higher in female-led businesses we expect to find the following: H1.1: In female-led businesses there will be a higher degree of employee participation [PARTICIP] than in male-led businesses Brush (1992) describes the role of women as coordinating relationships rather than ordering people around. Women leaders tend to focus on relationships instead of hierarchy (Buttner, 2001; Brush,
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These counterintuitive findings may be explained by the fact that most of the studies on gender differences in management in the field of entrepreneurship are qualitative and make use of samples that consist only of females. 6 We make a selection of the Commitment-Control Continuum dimensions as we do not have information on all dimensions in the data set. We make use of the study by Verheul et al. (2002) investigating gender differences in HRM in Dutch real estate brokerage as the basis for formulating the hypotheses as, to our knowledge this is the only study focusing upon gender differences in HRM in small businesses. 12

1992; Belenky et al., 1986; Fischer and Gleijm, 1992; Stanford et al., 1995). Accordingly, Rosener (1990) assumes a high degree of decentralization and delegation of decision-making power in businesses headed by women. Stanford et al. (1995) view women entrepreneurs as more open to criticism and accessible for employees. They foster relationships with employees based on mutual trust and respect. Because it is suggested that women tend to structure their business in a non-hierarchical manner, the following hypothesis is formulated: H1.2: In female-led businesses there will be a higher degree of decentralization [DECENTR] than in male-led businesses Because female-led businesses are said to focus upon relationships instead of hierarchy, it is likely that control mechanisms are structured accordingly. Indeed, Verheul et al. (2002) suggest that whilst male entrepreneurs directly control the production process where failures or clumsiness are corrected within the process, female entrepreneurs are more likely to make use of indirect ways of controlling employees motivating them by encouraging commitment to the companys goals and scheduled meetings. Such evidence leads us to believe that control mechanisms in female-led businesses tend to be more indirect than in male-led businesses. Accordingly, the following hypothesis is formulated: H1.3: In female-led businesses supervision is relatively indirectly structured [INDIRECT] as compared to male-led businesses Several studies suggest that businesses of women use more informal practices (Brush, 1992; Cuba et al., 1983; Hisrich and Brush, 1987; Chaganti and Parasuraman, 1996; Rosener, 1990). The assumed non-hierarchical structure of women-led businesses seems to give way to an emphasis on informal, non-systematic structuring. Mukthar (2002) argues that given that female owner-managers are more informal, and thus more flexible using little or no documented procedures, they rely on intuition for decision making within the business. Because of this evidence and the recent argument of Mukthar
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(2002) we expect that female-led businesses are structured more informally than male-led businesses, leading to the following hypothesis: H1.4: Female-led businesses have a relatively informal structure [INFORMAL] as compared to maleled businesses The alleged non-hierarchical and informal environment of female-led businesses is likely to have consequences for the way in which jobs and tasks are structured, e.g., enhancing employee motivation, and in turn commitment. In accordance with the assumption that HRM systems in female-led businesses are more commitment-oriented (see Hypothesis H1), we expect jobs to be more broadly defined and with a high degree of task differentiation, leading to the following hypotheses on the scope and contents of jobs/tasks in female- and male-led businesses: H1.5: In female-led businesses jobs are more broadly defined [BROADJOB] than in male-led businesses H1.6: In female-led businesses tasks are more differentiated [TASKDIFF] than in male-led businesses Regarding gender differences in the degree to which attention is paid to training and development of employees, the evidence there is (Verheul et al., 2002), suggests that in both female- and male-led businesses attention is paid to the learning process of employees. However, in Verheul et al. (2002) it is also suggested that female entrepreneurs are more likely to oblige their personnel to engage in training and development than male entrepreneurs, which may be an indication of their educational demands. Moreover, the focus of the training may differ in female- and male-led businesses. For instance, female entrepreneurs may be more likely to pay attention to management training as the bulk of women in management positions do not have the advantage of experience in management positions and they tend to rely more on their employees (Cromie and Birley, 1991) or they may be expected to pay more

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attention to social development of employees as they are thought to value collective action (Jago and Vroom, 1982; Gibson, 1995) for which social skills are important. Because these forms of training have a more general character, it may be that women focus more on general training. Although it is difficult to a priori formulate hypotheses on the degree and focus of training and development in female- and male-led businesses, the following hypotheses are proposed, based on scant evidence, logical reasoning and intuition: H1.7: In female-led businesses more explicit attention is paid to the learning process of employees [LEARN ] than in male-led businesses H1.8: In female-led businesses there is a higher degree of general training [TRAINGEN] than in maleled businesses 3.2 Business Profile and HRM

Firm size Several studies show that firm size influences the shaping of HRM practices (Hornsby and Kuratko, 1990; Deshpande and Golhar, 1994; Marlow and Patton, 1993; Jackson et al., 1989; De Kok and Uhlaner, 2001). The bulk of these studies argues that small businesses often spend less time on developing and formalizing HRM practices. In addition, small-scale activities enable a more flexible, informal and personal style with direct communication between employees and the owner-manager. This may facilitate delegation and a high autonomy of employees in decision-making (Ram, 1999)7. Hence, firm size is likely to have implications for the degree of control or commitment in HRM systems. Golhar and Deshpande (1997) and Deshpande and Golhar (1994) find that both large and small (manufacturing) firms rank open communication, training of new employees, and employee
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However, as tasks in a small business are often less specialized this may also limit the extent to which delegation is necessary (Mukthar, 2002). 15

participation initiatives among the most important HRM practices. Goffee and Scase (1995) argue that adaptiveness and job variety are distinctive characteristics of small firms. They indicate that work in small businesses is broadly defined and employees have a high degree of discretion and responsibility. In addition, there may be little need for direct management control as work is continuously adapted to customer preferences. Commitment seems particularly important in small businesses as employees are often allrounders who are difficult to replace as they possess firm-specific (tacit) knowledge. Also, it is relatively costly for small businesses to find new employees in the market because of the absence of economies of scale (Nooteboom, 1993). Moreover, small firms usually have no specialized staff for different functional areas, such as finance, marketing and personnel, and jobs are broadly defined, comprising of different tasks. Being involved in a broad range of activities may increase the involvement of employees with the organization. Although there are many arguments favoring a commitment-oriented strategy in small businesses, it has to be noted that owner-managers of small businesses often are reluctant to give up control over their business. They want to be entrepreneur instead of manager. As Goffee and Scase (1995, p. 41/2) note: To shift . to a management style that requires the ability to trust staff in a hands-off manner so that systems of delegation can be established requires a fundamental change in proprietal attitude and competence. Moreover, owner-managers of small businesses do not have to give up control over the business as the firm is sufficiently small to participate in day-to-day operations and directly control production. However, in general, we would expect HRM systems in small businesses to be more commitment-oriented than those in large businesses. This leads to the following hypothesis: H2: HRM systems in smaller businesses are more commitment-oriented than those in larger businesses [control = firmsize]
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Sector: service versus non-service firms Businesses in different sectors may be characterized by different employment cultures (Curran et al., 1993). Moreover, Curran et al. (1993) show that also within different types of service firms there is variation in employment culture. Accordingly, employee commitment may be more important in certain business environments than in others. Commitment is more likely to be a goal of HRM in the service sector than in other sectors because commited employees are important for customer loyalty and satisfaction (Heskett et al., 1997; Hall, 1993; Maister, 1997). In service firms the relationship between customers and employees is the key to the production process (Heskett et al., 1997, p. 98). Mowday (1998, p. 398) shows that employee commitment to the organization may result in greater positive returns in the service sector than in manufacturing. In the same fashion Ram (1999, p. 15/6) argues that The loyalty and commitment of key workers in professional service firms is secured by developing a person-centred culture characterised by high-trust work relations . Hence, it may be argued that HRM systems are more commitment-oriented in service than in non-service firms. The following hypothesis is formulated: H3: HRM systems in service businesses are more commitment-oriented than those in non-service businesses [control = service] Business strategy It has been argued that business strategy influences the type of leadership or, in general the shaping of HRM practices (Schuler and Jackson, 1987; Lengnick-Hall and Lengnick-Hall, 1988; Youndt et al., 1996). Boselie (2002) argues that Waltons (1985) distinction between control and commitment strategies appears to be inspired by Porters (1980, 1985) distinction between the strategies cost reduction, focus and differentiation. According to Guthrie et al. (2002) firms adopting a differentiation strategy also aim for high involvement work practices.
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Youndt et al. (1996) make a distinction between three strategies, including cost, quality and flexibility. Each of these strategies will have important implications for the shaping of HRM systems (Youndt et al., 1996). The most efficient approach to HRM for firms minimizing costs is to adopt a command-andcontrol style where emphasis is placed on efficiently managing low-skilled, manual workforce. For firms pursuing a quality strategy the determinant of organizational competitiveness may be the intellectual capital of the firm. In these firms there is a transition from manual labor, where responsibilities are limited to the physical execution of work, to knowledge work with broader responsibilities. In these firms the aim is to develop human-capital enhancing HRM systems with a focus on training and development of employees. In the same fashion, firms pursuing flexibility strategies require human-capital-enhancing HRM systems focusing on skill acquisition and development in an effort to facilitate adaptability and responsiveness. This leads to the following hypotheses regarding the influence of low-cost or low-price, quality and focus8 strategies on the commitment-orientation of HRM systems. H4: HRM systems in firms focusing on minimizing costs, aiming at low prices, are less commitment-oriented than those in firms that do not pursue this type of strategy [control = lowprice] H5: HRM systems in firms pursuing a quality strategy are more commitment-oriented than those in firms that do not pursue this type of strategy [control = quality] H6: HRM systems in firms pursuing a focus strategy are more commitment-oriented than those in firms that do not pursue this type of strategy [control = focus]

We hypothesize the influence of a focus strategy (instead of a flexibility strategy) on the shaping of HRM as we argue that these two tend to go hand in hand. Firms that produce tailor-made (i.e., individualized) products and services and, accordingly, are said to pursue a focus strategy, need flexibility in their organizational structure, enabling them to instantly react to whimsical consumer needs. Focus here refers to differentiation focus where special needs of buyers in certain segments are served (Porter, 1985). 18

In addition to the focus of business strategy, the extent to which a firm pursues growth may influence the shaping of HRM practices. It is argued that the pursuit of a growth strategy is related to more formal and professionally developed HRM practices (Thakur, 1999; Matthews and Scott, 1995). As a formal structure is expected to be characteristic of a control-oriented HRM system (see Table 1), the following hypothesis is formulated: H7: HRM systems in firms pursuing a growth strategy are less commitment-oriented than those in firms that do not pursue such a strategy [control = growth] Firm age or stage of development Several scholars have argued that as firms move through various stages of development, differing problems must be addressed, resulting in the need for different management skills, priorities, and structural configurations (Greiner, 1972; Churchill and Lewis, 1983; Kazanjian, 1988; Kimberly and Miles, 1980; Smith, Mitchell and Summer, 1985). Accordingly, firm age may be of influence on the shaping of HRM systems. Commitment in HRM systems may be more important in the first stages of business development when the business is still small and struggles to stay alive. When the business grows, more employees need to be recruited and management control becomes more important. Since younger firms tend to be in an earlier stage of development than older firms, firm age may be of influence on the shaping of HRM systems. The following hypothesis is formulated to capture the effect of firm age on the commitment-orientation of the HRM system: H8: HRM systems in younger firms are more commitment-oriented than those in older firms [control = firmage] Time invested in the business

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Although there is no literature to support the relationship between time invested in the business and the employment relationship, it may be argued that whether someone works full-time or part-time in the business influences the shaping of HRM practices. Commitment may be more important in businesses where the entrepreneur, or owner-manager, is not always present to control the production process. Time invested in the business may be related to the degree to which employees work independently on their jobs. In addition, and related to the previous arguments, the degree to which team building is important may be dependent upon the course of the work week of the entrepreneur. H9: HRM systems in firms where the entrepreneur invests many hours are less commitmentoriented than those in firms where the entrepreneur invests few hours [control = hours]

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4.1

Methodology
Data Collection and Sample Characteristics

To test the hypotheses, use is made of a panel of EIM Business and Policy Research in Zoetermeer. Every four months approximately 2,000 Dutch entrepreneurs participate in this so-called SME Policy Panel. The SME Policy Panel is used for both cross-sectional and longitudinal research and registers two types of data. The first type concerns basic information about both the business and its owner, i.e., the entrepreneur. These data are renewed every year because of their short-term character. This basic information is collected using a questionnaire consisting of a fixed set of questions. The second type of information relates to more specific information regarding performance, attitudes and behaviors of the Dutch SMEs. This information is collected through telephone interviews. Three times a year panel members are approached to participate in the interviews where two or three specific (often policyrelated) topics are discussed.

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For the present study use is made of a selection of questions from the SME Policy Panel concerning both human resource management issues and other information concerning the business and the entrepreneur. Independent variables include gender of the entrepreneur (i.e., the owner-director or director of the business), (logarithm of) firm size, firm age, hours invested in the business, whether a business is a service business and business strategy (low-price, quality, focus and growth). See Table 2 for a description of the independent variables used in this study. The independent variables (i.e., gender and business profile) are selected from earlier panel rounds than the dependent variable(s) (i.e., human resource management) to ensure an adequate direction of the relationship between human resource management and the explanatory variables in the empirical analysis. Table 2: Description of Independent Variables
Variable Gender Firmsize Firmage Hours Service Lowprice Quality Focus Growth Description Is the entrepreneur female or male? Logaritm of number of people employed in the firm Number of years the firm has been in existence Number of hours per week invested in the business Is the firm located in the service sector? To what extent adopts the business a low-price strategy? To what extent adopts the business a high-quality strategy? To what extent adopts the business a (differentiation) focus strategy? To what extent adopts the business a growth strategy? Measurement Dummy variable: female = 1 and male = 0. Min. value = 0 and max. value = 7.87. Response categories: 1=0-2 years, 2=3-5 years, 3=6-10 years, 4= more than 10 years. Response categories: 1=1-20 hours, 2=21-40 hours, 3=41-60 hours, 4= more than 60 hours. Dummy variable: services = 1 and non-services = 0. Response categories: 1=none, 2= limited extent, 3=some extent, 4=large extent, 5=very large extent. Response categories: 1=none, 2=limited extent, 3=some extent, 4=large extent, 5=very large extent. Response categories: 1=none, 2=limited extent, 3=some extent, 4=large extent, 5=very large extent. Response categories: 1=none, 2=limited extent, 3=some extent, 4=large extent, 5=very large extent. N 3431 2359 2404 1491 2063 2135 2256 2151 2368 Mean 0.12 2.65 3.45 3.11 0.44 2.63 4.30 3.67 2.26 Std. dev. 0.33 1.47 0.87 0.64 0.50 1.15 0.83 1.17 0.70

The average firm size in the sample, as measured by the number of people employed, is 34.739. The number of people employed includes the owner(s), manager(s), working family members, fulltime and part-time employees as well as helpers or assistants. More than 60 percent of the firms in the analysis has less than 25 employees, 35 percent has between 26 and 100 employees, and 4 percent has more

21

than 100 employees. Since we expect that the effect of increasing size on human resource management diminishes, we represent firm size by the logarithm of the number of employees, rather than taking into account the absolute number of employees (see Table 2). Six firms have no employees; these firms are excluded from the analysis. 4.2 Measurement of HRM

Of the 15 dimensions of the Control-Commitment Continuum presented in Table 1, eight dimensions, covered by the available data, are selected in the empirical study10. Commitment dimensions are constructed using multiple items from the SME Policy Panel questionnaire. Factor analysis is used to determine which items belong to which dimension. The results of the factor analysis are presented in Table 3. The first factor appears to consist of items pertaining to the dimensions of informal structure and learning. For the purpose of the present study, both dimensions are included separately in the analysis. Factor two clearly shows the decentralization dimension. Because the fourth item employees control their own work does not contribute to any of the other factors and it can be viewed as a form of decentralization, it is included in the decentralization dimension. Factors three and four clearly show the general training and broadly defined jobs dimensions, respectively. Factor five is made up of employee participation items. Because the third item employees are involved in decision-making does not contribute to any of the other factors it is included in the employee participation dimension. Factors six and seven show the indirect supervision and task differentiation dimension. Eigenvalues range from 2.72 of the first factor to 1.30 for the seventh (last) factor. The factors in Table 3 correspond with the dimensions in Table 1 surprisingly well. Hence, it can be argued that the dimensions as identified by
9

10

The standard deviation is 77.02. Initially, nine commitment dimensions were selected. However, in the factor analysis the dimension of the importance of collective, i.e., team-based, action, dropped out. That is why we decided to proceed with eight variables. 22

Beer et al. (1984), Arthur (1992; 1994) and Boselie (2002), are relevant and valuable for studying HRM issues. In addition to the factor analysis, Cronbachs Alpha is computed to verify whether, given a certain dimension, the selected items form a coherent group. Cronbachs Alpha amounted to 0.53 for the participation items, 0.66 for the decentralization items, 0.67 for the indirect supervision items, 0.69 for the informal structure items, 0.45 for the broadly defined job items, 0.31 for the task differentiation items, 0.58 for the learning items and 0.72 for the general training items. Hence, in three of the eight cases Cronbachs Alpha is relatively small ( < 0.6). In general, it seems that the coherence between the items is sufficient but limited. Including separate items, instead of constructed dimensions, in the analysis did not yield any additional information. Following the dimensions in Table 3, eight commitment variables are constructed as an unweighted average of the underlying items. These commitment variables are presented in Table 4 and include employee participation (PARTICIP), decentralization (DECENTR), indirect supervision (INDIRECT), informal structure (INFORMAL), broadly defined jobs (BROADJOB), task differentation (TASKDIFF), explicit attention paid to learning (LEARN) and general training (TRAINGEN). Also, a general commitment variable (COMMITM) is constructed as an unweighted average of the eight specific commitment variables.

23

Table 3: Factor Analysis Matrix (Principal Component Analysis, Varimax Rotated)


Factors 4

Dimensions and items 1 2 3 5 6 7 Participation 1: Employees involved in recruitment/selection 0.20 0.81 2: Employees involved in employee assessment 0.86 3: Employees are involved in decision-making 0.43 0.31 0.20 0.26 -0.16 Decentralization 1: Employees determine their own decisionsa 0.82 0.14 a 2: Employees make their own decisions 0.84 0.13 3: Employees determine their work pace 0.68 0.20 4: Employees control their own work -0.12 0.36 -0.37 -0.20 0.34 Indirect supervision 1. Employees work independently 0.18 0.82 0.29 0.77 2: Employees fulfill their tasks without direct supervision Informal structure 1: There are no written rules/procedures -0.58 -0.18 0.13 0.11 2: Consultation does not occur via fixed rules -0.57 -0.17 0.35 0.15 3: Jobs/tasks (contents) are not written down -0.71 0.26 0.15 Broadly defined jobs 1: Employees each do not have specific tasks 0.53 2: Order of tasks is not determined in advance 0.28 0.60 0.14 3: Outcomes are not specified in advance -0.34 0.56 0.22 4: Employees jobs are interchangeable 0.55 -0.15 Task differentiation 1: Work is diverse 0.12 0.14 0.59 2: Employees have multiple tasks 0.76 Learning 1: Employees are provided with feedback 0.52 0.19 -0.11 0.32 2: Explicit attention for employee learning 0.59 0.13 0.17 3: Number of employees with training 0.64 0.17 0.28 General training 1: Management training 0.30 0.64 0.19 2: Social and individual development training 0.18 0.85 3. Team building training 0.83 -0.11 Eigenvalue (factor) 2.72 2.33 1.96 1.67 1.65 1.52 1.30 N=833 Note 1: all underlying items are questions with three response categories: 1 = to a limited extent, 2 = to some extent, 3 = to a large extent. Note 2: only factor loadings 0.1 are presented. Factor loadings 0.5 are highlighted in bold. Items with factor loadings in bold are included in the construction of the commitment variables. a The distinction between these two items is not entire clear. The first item may refer to decision-making at a higher hierarchical level where employees do not only make their own decisions, but also determine what kind of decisions they can make themselves. The inclusion of both items in the analysis is justified by their similar factor loadings.

24

Table 4: Description of Commitment Variables


Variable PARTICIP Description Degree to which employees can influence strategic decision-making, surpassing their immediate tasks Degree to which employees are able to fulfill their tasks autonomously Degree to which supervision is indirectly structured Degree to which the business is informally structured Degree to which jobs are broadly defined Degree to which tasks are differentiated Degree to which explicit attention is paid to the learning of employees Measurementa Unweighted average of three items, three response categories. N 1483 Mean 1.74 Std. dev. 0.48

1064 2.28 0.53 Unweighted average of four items, three response categories. INDIRECT 2097 2.60 0.58 Unweighted average of two items, three response categories. INFORMAL 1.79 0.63 Unweighted average of three items, 1087 three response categories. BROADJOB 1472 1.82 0.46 Unweighted average of four items, three response categories. TASKDIFF 1479 2.48 0.46 Unweighted average of two items, three response categories. LEARN Unweighted average of three items, 943 2.50 0.48 three response categories. 1475 2.02 0.59 TRAINGEN Degree to which training is gerenal Unweighted average of four items, three response categories. COMMITM 833 2.16 0.21 Degree to which HRM systems are Unweighted average of the eight commitment-oriented specific commitment HRM variables. a Response categories are the following: 1 = to a limited extent, 2 = to some extent, 3 = to a large extent. See Table 3 for details on construction of the commitment variables.

DECENTR

In an additional test, two types of commitment are included: type A commitment (COMMITA) i.e., employee involvement and competence development constructed as an unweighted average of the commitment variables: employee participation (PARTICIP), decentralization (DECENTR), attention paid to learning (LEARN) and general training (TRAINGEN), and type B commitment (COMMITB) i.e., formalization of procedures and work structure constructed as an unweigthed average of the commitment variables: indirect supervision (INDIRECT), informal structure (INFORMAL), broadly defined jobs (BROADJOB) and task differentiation (TASKDIFF). The rationale for distinguishing between these two commitment types is dealt with in the results section.

25

Results

In this section the relationship between the different independent and dependent variables is investigated using Pearson Product-Moment correlation coefficients. Subsequently, the relationships between the business profile characteristics, gender and the commitment variables (in Table 4) are investigated through a series of regression analyses on the specific commitment variables and the general commitment variable. 5.1 Correlation Analysis

Table 5 presents the Pearson correlations between all variables in the sample. Reviewing the correlations between the independent variables, it is striking to see that gender correlates with all except one of the other independent variables. From a bilateral perspective, women seem to have smaller and younger businesses, invest less time in the business, have a service rather than a nonservice business and are less likely to pursue low price, focus and growth strategies (although these correlations are relatively small). Most of these gender differences are in line with the literature. The finding that gender is correlated with the other independent variables indicates the likelihood of gender (indirectly) influencing the extent to which HRM practices are commitment-oriented through the business profile (see Figure 1). The high correlation of firm size with firm age (r=0.35, p<0.01) can easily be explained, as younger firms tend to be small. In addition, the high correlation between pursuing focus and quality strategies (r=0.36, p<0.01) comes as no surprise as these strategies often go hand-in-hand.

26

Table 5: Pearson Correlation between All Variables in the Sample


1 1
-0.26*** -0.12*** -0.16*** 0.14*** -0.05** -0.07*** -0.02 -0.08*** -0.09*** -0.06* -0.01 0.01 0.04 -0.01 -0.03 -0.09*** -0.09***

2 1
0.35*** -0.05 -0.17*** 0.11*** 0.10*** 0.06*** 0.19*** 0.42*** -0.02 -0.10*** -0.43*** -0.18*** -0.13*** 0.45*** 0.26*** 0.02

10

11

12

13

14

15

16

17

18

1. gender 2. firmsize 3. firmage 4. hours 5. service 6. lowprice 7. focus 8. quality 9. growth 10. PARTICIP 11. DECENTR 12. INDIRECT 13. INFORMAL 14. BROADJOB 15. TASKDIFF 16. LEARN 17. TRAINGEN 18. COMMITM

1
-0.08*** -0.07*** -0.15 0.02 0.02 -0.10*** 0.10*** -0.02 -0.01 -0.06** -0.07** -0.09*** 0.04 0.03 -0.05

1
-0.07** -0.001 0.04 0.03 0.04 -0.14*** -0.09*** -0.02 0.02 0.02 0.04 -0.15*** 0.02 -0.09***

1
-0.05** 0.003 -0.02 -0.01 0.04 0.13*** 0.09*** 0.02 0.004 0.08** 0.14*** 0.06** 0.15***

1
0.08*** 0.10*** 0.11*** 0.01 -0.05 -0.04 -0.05 -0.05 -0.02 0.02 0.06** -0.04

1
0.36*** 0.13*** 0.07** 0.13*** 0.06*** -0.07** -0.02 0.06 0.08** 0.03 0.11***

1
0.10*** 0.03 0.05 0.04** -0.08** -0.07** 0.03 0.01 0.01 0.01

1
0.11*** 0.04 -0.003 -0.14*** -0.04 0.02 0.14*** 0.16*** 0.09***

1
0.12*** -0.04 -0.23*** -0.09*** -0.03 0.42*** 0.17*** 0.35***

1
0.32*** -0.01 0.03 0.12*** 0.16*** 0.04 0.58*** 1 0.05 0.11*** 0.10*** 0.02 -0.02 0.53*** 1 0.33*** 0.08** -0.43*** -0.31*** 0.22*** 1 0.11*** -0.17*** -0.12*** 0.39*** 1 0.04 0.06 0.45***

1
0.31*** 0.36*** 1 0.36*** 1

* Coefficient is significant at the 0.10-level (2-tailed); ** Coefficient is significant at the 0.05-level (2-tailed); *** Coefficient is significant at the 0.01-level (2-tailed).

27

Investigating the correlations between the commitment variables in Table 5, we see that, in general, there is a moderate degree of correlation between the specific commitment variables. Most strongly associated commitment variables include the relationships between informal structure (INFORMAL) and attention paid to learning (LEARN) (r=-0.43, p<0.01) and between employee participation (PARTICIP) and attention paid to learning (LEARN) (r=0.42, p<0.01). Hence, from a bilateral perspective, a learning environment is likely to be formally structured, with room for employee participation. Although we would expect that all commitment variables are positively correlated, this is not the case. This could be an indication of a lack of coherency within the HRM system for the firms in the sample. For the correlations between dependent and independent variables, the high correlations of firm size with attention paid to learning (LEARN) (r=0.45, p<0.01), informal structure (INFORMAL) (r=-0.43, p<0.01) and employee participation (PARTICIP) (r=0.42, p<0.01) stand out. Hence, from a bilateral perspective, large businesses are likely to be characterized by explicit attention paid to learning, a formal structure and a high degree of employee participation. From the last row in Table 5 we see that the degree to which an HRM system is commitment-oriented is related to gender (r=0.09, p<0.01), hours invested (r=-0.09, p<0.01), service sector (r=0.15, p<0.01), focus strategy (r=0.11, p<0.01) and growth strategy (r=0.09, p<0.01). 5.2 Regression Analysis

To further investigate the influence of gender and the other (business profile) factors on HRM, regression analyses are performed. A distinction is made between explaining specific commitment variables (PARTICIP, DECENTR, etc.), the general commitment variable, i.e., HRM system (COMMITM), and two types of HRM commitment (COMMITA and COMMITB). The results of these regression analyses are presented in Table 6.

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Table 6: Regression Explaining Dimensions on the Control-Commitment Continuum (-values are represented)
constant
COMMITMENT VARIABLES

gender -0.12** -0.24*** -0.19** -0.12 0.008 -0.03 0.03 -0.05 -0.08** -0.08* -0.09*

firmsize 0.16*** -0.0002 -0.08*** -0.26*** -0.07*** -0.04** 0.22*** 0.13*** 0.007 0.13*** -0.11***

firmage 0.01 -0.02 0.03 0.03 -0.02 -0.02 -0.04 -0.0007 -0.009 -0.02 0.004

hours -0.09*** -0.08** -0.02 0.02 -0.02 0.01 -0.07** 0.04 -0.03** -0.06*** 0.0006

service 0.06** 0.14*** 0.05 -0.01 -0.01 0.07** 0.16*** 0.11*** 0.06*** 0.10*** 0.02

lowprice -0.01 -0.04* -0.009 -0.009 -0.01 -0.003 -0.009 0.02 -0.008 -0.007 -0.01

quality 0.02 0.02 0.03 0.0004 -0.002 0.005 -0.02 -0.002 -0.0003 -0.02 0.02

focus 0.03** 0.04* 0.006 -0.01 0.01 0.03 0.04** 0.004 0.02** 0.03*** 0.004

growth 0.07*** 0.02 0.009 -0.08** -0.03 0.02 0.07*** 0.09*** 0.03** 0.07*** -0.02

R2
0.209 0.051 0.037 0.204 0.039 0.027 0.270 0.097 0.057 0.249 0.159

F-stat 27.98*** 3.69*** 3.99*** 17.60*** 2.77*** 1.946** 25.48*** 11.42*** 4.02*** 22.33*** 12.73***

N 964 624 955 627 626 631 628 964 606 614 617

PARTICIP DECENTR INDIRECT INFORMAL BROADJOB TASKDIFF LEARN TRAINGEN COMMITM COMMITA COMMITB

1.16*** 2.37*** 2.66*** 2.69*** 2.25*** 2.50*** 1.94*** 1.16*** 2.15*** 1.80*** 2.51***

*Coefficient is significant at the 0.10-level (2-tailed); ** Coefficient is significant at the 0.05-level (2-tailed); *** Coefficient is significant at the 0.01-level (2-tailed).

29

Gender and HRM Regarding gender effects on the specific commitment variables, we see in Table 6 that six of the eight gender effects are negative, of which three are significantly negative. None are significantly positive. On the whole, the effect of gender on the commitment-orientation of the HRM system is negative. This can be seen also from the negative effect of gender on the general commitment variable (COMMITM). Hence, hypothesis H1 is rejected: contrary to what is generally believed we find that female entrepreneurs are less likely to make use of commitment in structuring their HRM systems. Of the hypotheses on the HRM dimensions, operationalized by the specific commitment variables, H1.1 through H1.3 are rejected. As compared to male-led businesses, in female-led businesses there is a lower degree of employee participation, a higher degree of centralization and more direct supervision of employees. In addition, no evidence is found for hypotheses H1.4 through H1.8. Female- and male-led businesses do not differ regarding formalization of the organizational structure, job scope, task assignment, the attention paid to learning and general training. Business profile and HRM In addition to gender, several of the business profile factors (see Figure 1) appear to influence the commitment-orientation of HRM practices, including firm size (firmsize), time invested in the business (hours), whether a business a service business (service), focus and growth strategies (focus and growth). Firm size (firmsize) has different effects on the commitment-orientation of HRM. Of the eight size effects on the specific commitment variables, four are significantly negative and three are significantly positive. As compared to larger firms, smaller businesses are characterized by a higher degree of direct supervision of employees, a lower degree of formalization, more broadly defined jobs and more task differentiation. These contrary effects produce an overall size effect on the

30

commitment-orientation of the HRM system (COMMITM) that is not significant. Hypothesis H2 is not supported. Service businesses (service) have a higher score on the commitment-orientation of the HRM system. Hypothesis H3 is supported. With respect to the specific commitment variables, we see that a service (rather than a non-service) business is characterized by higher degrees of employment participation, decentralization, task differentiation, and more attention for learning and general training. Adopting a focus strategy (focus) has a positive impact on the degree to which the HRM system is commitment-oriented. Hypothesis H6 is supported. Regarding the HRM dimensions, businesses pursuing a focus strategy have a higher degree of employee participation and decentralization as well as more explicit attention for learning. In addition, adopting a growth strategy (growth) also positively influences the commitment-orientation of the HRM system. This was not foreseen. Hypothesis H7 is rejected. Of the four significant growth effects on the specific commitment variables, three are positive and one is negative. Businesses that pursue growth are characterized by a high degree of employee participation, explicit attention for learning and general training and a relative formal organizational structure. In general, time invested in the business (hours) appears to negatively affect the commitmentorientation of the HRM system. More time invested in the business entails a HRM system that is less commitment-oriented. Hypothesis H9 is supported. Regarding the HRM dimensions, it can be said that the more time invested in the business leads to less employee participation, more decentralization and less attention paid to learning. The development stage of a firm (firmage) as well as the pursuit of a low-price (lowprice) or quality strategy (quality) do not influence the commitment-orientation of the HRM system in a systematic

31

fashion, although pursuing a low-price strategy appears to be accompanied by a higher degree of centralization. Hypotheses H4, H5 and H8 are not supported. To summarize, gender and time invested in the business negatively influence the commitmentorientation of the HRM system, whereas a business in the service sector and pursuing a focus or growth strategy positively influences the degree of commitment. When split up in effects on specific commitment variables, firm size does influence commitment in HRM. However, because of the contrary effects, the overall size-effect on the commitment-orientation of the HRM system (COMMITM) is cancelled out. Because gender is significantly correlated with time invested in the business, service business and pursuing a focus and growth strategy (see Table 5), and these factors in turn influence the degree of commitment of the HRM system, it would be expected that, in addition to the direct gender effect, gender influences the degree of commitment-orientation indirectly through the business profile (see Figure 1). However, Table A-1 in the Appendix11 shows that leaving out either gender or the controls does not produce any disturbing effects12. Hence, there is no evidence of an indirect gender effect. Only for indirect supervision (INDIRECT) and general training (TRAINGEN) the gender effect is not similar when comparing regression results including all variables and gender only. When controlled for the business profile factors in the first row, the gender effect appears for indirect supervision (INDIRECT) and dissapears for general training (TRAINGEN). Two types of commitment Observing the specific commitment variables in Table 6 a distinction can be made between two groups of commitment practices: those that focus upon employee involvement and competence
Table A-3 in the Appendix presents the results of regression analyses per commitment dimension, including all explanatory variables in the first row, gender only in the second row and the business profile factors only in the third row.
11

32

development (i.e., PARTICIP, DECENTR, LEARN, TRAINGEN) and those emphasizing work structure and procedures at different organizational levels (i.e., INDIRECT, INFORMAL, BROADJOB, TASKDIFF)13. Additional regression analyses are performed to test for gender effects on these two different groups of commitment practices, referred to as type A and B commitment practices (COMMITA and COMMITB), respectively. Type A commitment is comprised of the commitment dimensions: employee participation (PARTICIP), decentralization (DECENTR), attention paid to learning (LEARN) and general training (TRAINGEN). Type B commitment is made up of the commitment dimensions: indirect supervision (INDIRECT), informal structure (INFORMAL), broadly defined jobs (BROADJOB) and task differentiation (TASKDIFF)14. For both types of commitment, we find a similar negative gender effect (at a 10% significance level). This could be an indication of the control-orientation of women regarding human resource management practices in general. Firm size has a different influence on the two commitment types, positively influencing type A commitment and negatively influencing type B commitment. Larger businesses have higher employee involvement and pay more attention to competence development. Smaller firms have a broader job design and are relatively informally structured. The theoretical underpinnings of the two scale effects, found in this study, deserves further attention. This is outside the scope of the present paper. As opposed to type B commitment, type A commitment is also influenced by other factors than gender and firm size. The more hours invested in the business (hours), the lower commitment type A. Hence, businesses where the entrepreneur is full-time involved are less likely to be characterized by employee involvement and pay less attention to competence development. In addition, businesses in the service sector and with a focus or growth strategy are characterized by a higher commitment type A, i.e., more employee involvement and competence development.

12 Taking into account only those respondent cases for which all relevant data are available (i.e., where the N is equal for the three regressions on the different commitment items), does not produce different results. 13 These findings are data-driven.

33

Conclusion and Discussion

Making use of several HRM dimensions on the Commitment-Control Continuum (see Table 1), as first proposed by Beer et al. (1984), the present study finds that gender of the entrepreneur influences the degree to which HRM practices are commitment-oriented. Gender influences both the commitment-orientation of several of the HRM dimensions (i.e., employee participation, decentralization and supervision), as well as that of the aggregate HRM measures (i.e., HRM system and commitment types A and B: employee involvement and competence development, and work structure and procedures, respectively). The effect of gender on the commitment-orientation of the HRM system is a direct effect, rather than an indirect one, the latter working through business profile factors, such as firm size, sector, business strategy, firm development stage and time invested in the business (see Figure 1). This means that when the business profiles of female- and male-led businesses are similar, there still remains a gender difference regarding the commitment-orientation of the HRM system. Although women in the present study are more likely to have businesses in the service sector, invest less hours in their business, are less likely to pursue a focus and a growth strategy, and these factors in turn have a positive influence on the degree to which the HRM system are commitment-oriented, the overall effect of gender remains negative. Contrary to what is generally believed, the present study shows that HRM systems in businesses led by women are more control-oriented and less commitment-oriented than those in male-led businesses. Previous research has shown that women are more likely to let employees participate in decision-making (e.g., Cromie and Birley, 1991; Stanford et al., 1995; Neider, 1987), focus upon relationships instead of hierarchy (e.g., Buttner, 2001; Brush, 1992; Stanford et al., 1995) and have a more indirect way of managing employees (e.g., Verheul et al. 2002). In this study, female-led businesses are characterized by less employee participation, more centralization and direct instead
14

Type A and B commitment are computed as the mean of the four underlying commitment variables. 34

of indirect ways of controlling employees, as compared to male-led businesses. The counterintuitive finding that women are more control-oriented than men may be related to gender differences in risk taking propensity (e.g., Verheul and Thurik, 2001; Van Uxem and Bais, 1996). If women are less willing to take risk than men, this may to some extent explain why they are less willing to involve others in the decision-making process as relying upon others means giving up control. Practicing direct control over others reduces uncertainty. The finding that women are more control-oriented corresponds with the findings of Mukthar (2002, p. 305/6), arguing that female owner-managers are more autocratic, less consultative, less willing to allow employees make independent decisions and more reluctant to delegate authority to others. This is also identified in a study by Piercy et al. (2001), showing that female sales managers use higher levels of behavior control when they manage teams15. Nevertheless, the results of the present study should be interpreted with caution. For instance, there may be intermediating factors that are not controlled for in the present study and that are associated with gender. For example, women may be involved in specific types of businesses. Contingency control theory argues that organizational structuring and type of control within a firm is dependent upon factors, such as type of technology (e.g., routine versus non-routine) involved, firm size as well as environmental uncertainty16. Although the present study controls for firm size, it may be that the gender effect can be ascribed to the fact that women are often less likely to be involved in high-tech businesses, and with sectors with unstable environments, whereas these in turn may positively influence the commitment-orientation in the organizational structure. A business in an uncertain environment should maintain a flexible organizational structure to adequately adapt to changing market circumstances. This flexibility is more likely to be feasible when a business focuses on commitment in the structuring of HRM practices than when the focus is on control. To shed more light upon the
Sales management control strategy in this study has been defined, following Anderson and Oliver (1987), as the extent to which sales managers perform several monitoring, directing, evaluating and rewarding activities in carrying out their management responsibilities (see Piercy et al., 2001, p. 39/40). 16 See Daft (1998, p. 354), largely based on Woodwards (1965) technological complexity scale. 35
15

actual, i.e., effective, gender effect on the structuring of HRM practices within firms, further research should be conducted exploring these mediating effects of environmental and technological complexity. Further research should also focus on the influence of the other factors, such as firm size, on the commitment-orientation of HRM. Interestingly, we did not find a firm size effect on the degree to which the HRM system is commitment-oriented. The overall effect of firm size on the commitmentorientation of the HRM system is cancelled out by reverse effects on the HRM dimensions. When distinguishing between type A and type B commitment, we see that firm size positively effects type A commitment (i.e., employee involvement and competence development) and negatively effects type B commitment (i.e., formalization of procedures and work structure). Hence, the effect of firm size should be further investigated, making a distinction between different types of HRM practices. In the present study different HRM practices are added up to construct the aggregate measure of HRM system. However, as noted in the theoretical section, in most firms HRM practices do not form a coherent system. This is confirmed by the relatively low, and in some cases even negative, correlations among the specific HRM variables. Hence, researchers should be made aware that the use of aggregate measures of HRM practices may lead to misinterpretation of findings. The present study is based upon the views of Beer et al. (1984), Walton (1985) and Arthur (1992, 1994), implicitly assuming that control and commitment are two sides of a single dimension. However, it is important to investigate whether, indeed, commitment and control are two extremes on one continuum (Boselie, 2002, p. 41). The study by Piercy et al. (2001) concludes that, next to displaying a higher level of behavioral control, female sales managers also create more organizational commitment in their teams. This may be an indication that control and commitment can go hand in hand rather than be exclusive. Moreover, a distinction should be made between different types of control and/or commitment. In the present study a distinction is made between commitment types A and B, yielding different results. These commitment types are data driven and
36

could not logically be named or labeled, as both are comprised of fairly different components. Although several scholars have proposed different types of control (e.g., Merchant, 1985; Harzing, 1999; Snell, 1992; Burton, 2001), further research is needed to investigate commitment types. In addition, human resource managent systems may be classified according to different lines. Although the distinction between a focus on control and commitment is a comprehensible one, it is likely that in practice more diverse employment models can be identified. For instance, Burton (2001) distinguishes between five employment models based on the structuring of three human resource dimensions: attachment, coordination/control and selection. The present study uses a sample of Dutch female and male entrepreneurs. Because it can be expected that gender differences in leadership or management styles (Osland et al., 1998) or leadership styles in general (Gibson, 1995) differ internationally, the results may not be generally applicable. In addition, Hofstede (2001) finds that, as compared to other countries, the Netherlands are characterized by a relatively low degree of masculinity. The relative feminine culture in the Netherlands is likely to affect the extent to which women and men differ with respect to management of their employees. Because in a feminine culture male behavior is likely to be more similar to, than different from, female behavior, this may be an indication of the importance of the gender differences found in the present study.

37

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Appendix
Table A-1: Regression Explaining Dimensions on the Control-Commitment Continuum
PARTICIP DECENTR INDIRECT INFORMAL BROADJOB TASKDIFF LEARN TRAINGEN COMMITM COMMITA COMMITB constant 1.16*** 1.75*** 1.11*** 2.37*** 2.29*** 2.29*** 2.66*** 2.60*** 2.59*** 2.69*** 1.79*** 2.60*** 2.25*** 1.82*** 2.21*** 2.50*** 2.48*** 2.45*** 1.94*** 2.50*** 1.97*** 1.16*** 2.02*** 1.18*** 2.15*** 2.17*** 2.12*** 1.80*** 2.51*** gender -0.12** -0.17*** . -0.24*** -0.13* . -0.19** -0.03 . -0.12 0.03 . 0.008 0.08 . -0.03 -0.009. . 0.03 -0.05 . -0.05 -0.19*** . -0.08** -0.08*** . -0.08* -0.09* firmsize 0.16*** . 0.16*** -0.0002 . 0.009 -0.08*** . -0.08*** -0.26*** . -0.25*** -0.07*** . -0.08*** -0.04** . -0.04** 0.22*** . 0.21*** 0.13*** . 0.14*** 0.007 . 0.01 0.13*** -0.11*** firmage 0.01 . 0.01 -0.02 . -0.01 0.03 . 0.04 0.03 . 0.04 -0.02 . -0.01 -0.02 . -0.02 -0.04 . -0.05* -0.0007 . -0.009 -0.009 . -0.01 -0.02 0.004 hours -0.09*** . -0.07*** -0.08** . -0.08** -0.02 . -0.02 0.02 . 0.02 -0.02 . -0.02 0.01 . 0.02 -0.07** . -0.06** 0.04 . 0.04 -0.03** . -0.02* -0.06*** 0.0006 service 0.06** . 0.06** 0.14*** . 0.14*** 0.05 . 0.06* -0.01 . -0.003 -0.01 . -0.01 0.07** . 0.08** 0.16*** . 0.17*** 0.11*** . 0.11*** 0.06*** . 0.06*** 0.10*** 0.02 lowprice -0.01 . -0.01 -0.04* . -0.03* -0.009 . -0.004 -0.009 . -0.006 -0.01 . -0.01 -0.003 . -0.006 -0.009 . -0.01 0.02 . 0.02 -0.008 . -0.009 -0.007 -0.01 quality 0.02 . 0.02 0.02 . 0.02 0.03 . 0.03 0.0004 . -0.003 -0.002 . 0.001 0.005 . 0.004 -0.02 . -0.02 -0.002 . -0.006 -0.0003 . -0.002 -0.02 0.02 focus 0.03** . 0.03** 0.04* . 0.05** 0.006 . 0.008 -0.01 . -0.01 0.01 . 0.02 0.03 . 0.03* 0.04** . 0.05*** 0.004 . 0.004 0.02** . 0.02*** 0.03*** 0.004 growth 0.07*** . 0.06*** 0.02 . 0.02 0.009 . 0.01 -0.08** . -0.08** -0.03 . -0.02 0.02 . 0.02 0.07*** . 0.07*** 0.09*** . 0.09*** 0.03** . 0.03** 0.07*** -0.02 R2 0.209 0.009 0.199 0.051 0.004 0.042 0.037 0.000 0.030 0.204 0.000 0.191 0.039 0.002 0.040 0.027 0.000 0.031 0.270 0.001 0.270 0.097 0.007 0.098 0.057 0.009 0.053 0.249 0.159 F-stat 27.98*** 12.53*** 30.63*** 3.69*** 3.83* 3.50*** 3.99*** 0.38 3.84*** 17.60*** 18.91*** 2.77*** 2.64 3.30*** 1.95** 0.04 2.56*** 25.48*** 0.74 29.61*** 11.42*** 10.38*** 13.42*** 4.02*** 7.10*** 4.32*** 22.33*** 12.73*** N 964 1429 996 624 1024 645 955 1921 985 627 1046 648 626 1046 646 631 1426 652 628 907 649 964 1422 995 606 804 625 614 617

* Coefficient is significant at the 0.10-level (2-tailed); ** Coefficient is significant at the 0.05-level (2-tailed); *** Coefficient is significant at the 0.01-level (2-tailed) 42

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