What is a small business? What is a large business? There are differing definitions for small versus large businesses, depending on the context of the discussion. As an example, the United States Small Business Administration has established a size standard for most industries of the economy (United States Small Business Administration, 2002). Under these standards, for instance, in the manufacturing and mining industries, a business is small if it has fewer than 500 employees, while fewer than 100 employees makes businesses in the wholesale trade industry small. For the discussion in this paper, we use the term “small business” to imply organizations with fewer than 100 employees. Therefore, a “large business” implies 100 or more employees.
Employment, placement, and HR planning are part of HRM, particularly the staffing process required by all types of organizations. In many instances, the owner of a small business handles the HRM function himself or herself because the firm only employs a few individuals (Hornsby and Kuratko, 1990). It is easier for the small business owner to make decisions and hire employees due to the owner’s single authority. In contrast, in a larger organization, this task is often handled by the HRM department, which employs fulltime personnel to recruit, hire, and fulfill the other HRM functions. Such a process may involve lengthy hiring procedures due to the number of individuals and departments who may be involved in the final hiring decision.
