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Human Resource Management and Market Orientation Strategies in Family and Non-family Firms in Ghana: How Do They Relate to Competitive Strategy and Firm Performance?

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Family Businesses in Sub-Saharan Africa

Abstract

This chapter examined the effects of human resource management (HRM) and market orientation strategies on competitive strategy and firm performance in family and non-family firms. It also examined how these effects varied across family and non-family firms in Ghana. Data for the study came from two different respondents within each of the 122 manufacturing firms sampled in Ghana. The results indicated that the market orientation strategy was positively related to both cost leadership and differentiation in both family and non-family firms. However, the impact of market orientation strategy on competitive strategy was not different between family and non-family firms. While HRM participation was significantly related to both cost leadership and differentiation strategies only for family firms, the impact was stronger in terms of the differentiation strategy only for family firms. Market orientation strategy was not directly related to performance for both family and non-family firms. However, the HRM strategy of human resource (HR) participation was directly related to profitability only in family firms, and the impact was stronger for family firms than for non-family firms.

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Authors and Affiliations

  1. University of North Carolina at Greensboro, Greensboro, NC, USA

    Moses Acquaah & Kwasi Amoako-Gyampah

  2. University of South Carolina, Columbia, SC, USA

    Jayanth Jayaram

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  1. Moses Acquaah
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  2. Kwasi Amoako-Gyampah
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  1. University of North Carolina, Greensboro, Greensboro, North Carolina, USA

    Moses Acquaah

Appendix: Items Used for Market Orientation and Human Resource Management Strategies

Appendix: Items Used for Market Orientation and Human Resource Management Strategies

A. Market Orientation (α = 0.86)

Instructions: Please indicate the extent to which your company engages in the following business practices using the following scale: 1 = “Not at all” to 7 = “To a great extent.”

1. Our salespeople regularly share information with other people in our company concerning competitors’ strategies.

2. Our company’s objectives are driven by customer satisfaction.

3. We rapidly respond to competitive actions that threaten us.

4. We constantly monitor our level of commitment and orientation to serving customer needs.

5. Our top managers from every function regularly visit our current and prospective customers.

6. We freely communicate information about all our successful competitors’ experience across all parts of our company.

7. Our strategy for competitive advantage is based on our understanding of customers’ needs.

8. All of our company activities (e.g., marketing/sales, manufacturing, and finance/accounting) are integrated to serve the needs of our market.

9. Our company’s strategies are driven by our beliefs about how we can create greater value for customers.

10. We measure customer satisfaction systematically and frequently.

11. We give close attention to after-sales service.

12. Our managers regularly discuss competitors’ strengths and strategies.

13. All of our managers understand how everyone in our business can contribute to creating customer value.

14. We target customers where we have an opportunity for competitive advantage.

15. We share resources with other departments in our company.

B. Human Resource Management Strategy

Instructions: Below are statements that deal with employee practices. Please indicate the extent to which you agree or disagree with each statement as it pertains to your company using the following scale: 1 = “Strongly agree” to 7 = “Strongly disagree.” All items were reverse-coded.

B1. Recruitment and Selection (α = 0.69)

1. In our hiring process, we focus on applicants with long-term potential to our company.

2. We are rigorous in our recruiting and selection of new employees.

3. Before we hire from outside the company, we give our employees the chance to fill vacant positions.

4. Applicants for positions in our company undergo structured interviews (i.e., same questions are asked of all applicants).

B2. Participation and Involvement (α = 0.82)

1. Employees participate in a wide range of issues facing the company.

2. Employees receive formal communication from company about company goals and performance.

3. We conduct formal (written) appraisal of employees’ performance regularly (at least once a year).

4. Employees share information and work together.

5. Employees are given a lot of discretion in doing their work.

6. Employees have a reasonable process for making their concerns known.

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Acquaah, M., Amoako-Gyampah, K., Jayaram, J. (2016). Human Resource Management and Market Orientation Strategies in Family and Non-family Firms in Ghana: How Do They Relate to Competitive Strategy and Firm Performance?. In: Acquaah, M. (eds) Family Businesses in Sub-Saharan Africa. Palgrave Macmillan, New York. https://doi.org/10.1057/978-1-137-36143-1_5

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