Breaking away or holding on to the past? Exploring HRM systems of export-oriented SME in a highly uncertain context: insights from a transition economy in the periphery

Abstract

This article advances understanding of the interplay between high levels of environmental uncertainty and HRM challenges and practices of exporting SMEs in the garment industry of Kyrgyzstan. Uncertainty in this post-Socialist country emanates from the complex, conflict-ridden and ongoing process of transition from planned to market-based economy, resulting in a volatile institutional environment with under-developed formal institutions at its core. Drawing on qualitative data and framed by a novel theoretical framework consisting of HRM systems theory, North’s institutional approach and the concept of path-dependency, the article advances knowledge of the distinctive set of HRM challenges faced by SMEs and the contrasting HRM systems adopted by them. The article draws particular attention to how the embeddedness of socialist-era norms and the diffusion of new market-oriented institutional features influence the utilisation of HRM systems in SMEs, whilst also revealing their evolutionary nature in a transition economy context. The article contributes by extending the scope of HRM research to the little-explored transitional periphery of Central Asia and adds to the nascent body of knowledge on HRM in SMEs by offering a more nuanced understanding of HRM systems in exporting SMEs in a highly uncertain context.