The Dialectic Process of Firm Growth: An Empirical Study of Growth of HR service SMEs in Guangzhou City, the People’s Republic of China

Hanmin Huang

Research output: ThesisDoctoral Thesis

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How to best understand and facilitate growth of SMEs has been an important and
long-standing subject for academics and management practitioners in China and
abroad. This dissertation joins this effort, reporting an empirical study on the growth of HR service firms (SMEs) in Guangzhou City, China, which have been playing an increasingly important role in fast economic development of the country. The study aims to gain a better understanding on how and why these service firms were able to grow so as to identify ways to facilitate their growth.

To achieve the objectives, this study first reviewed the theories of the growth of the firm, in particular, theory of Penrose (1959), from which research gaps were identified and research questions were raised. Next, using multiple-case (embedded) design, the researcher of the study carried out two phases of empirical research on growth of the HR service SMEs in Guangzhou City. Findings from the research were then thoroughly discussed in view of extant literature on firm growth and conclusions were drawn on the research questions as to how and why these firms in the city were able to grow.

Based on the findings, it is concluded in this dissertation that HR service SMEs studied were in dialectical relation with their market (mainly their customers and competitors), with market constantly challenging these SMEs which in turn, continuously taking up and quite often overcoming these market challenges; it is this dialectical process of continuous forming and resolving conflicts between firm capabilities and market demands that led to spiral growth of these SMEs; thus, it could be said that causes of growth were the increase in market demands and the development of firm capabilities; both forces interacted constantly in a dialectical manner to produce forces driving firm growth.
Original languageEnglish
Awarding Institution
  • Royal Holloway, University of London
  • Smith, Chris, Supervisor
  • Tsai, Chin-Ju, Advisor
Award date1 May 2012
Publication statusUnpublished - 2012


  • Firm growth
  • Dialectic Process
  • Conflict
  • Professional Service Firms
  • HR service Firms
  • China

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