“Ethnic” family business or just family business? Human resource practices in the ethnic family firm

The presence of family influence and family social capital may factor into a family firm's relatively slow process in formalizing human resource practices when compared to a non-family firm. Family social capital and family influence also play a strong role in the development of the ethnic entrepreneur and the growing ethnic family firm. This conceptual paper explores the development of formal HRM practices in ethnic versus non-ethnic family firms, contrasting a family influence/family social capital approach to formalization of HRM practices with the institutionalization of HRM practices that occurs in many small and growing firms. First, we summarize the literature on ethnic entrepreneurs and family firms with a specific focus on firms owned and operated by Hispanics in the United States. We then offer propositions for future research regarding formal high-performance HRM practices in ethnic family firms, advance a research design to test the proposed relationships and discuss how these relationships might compare in U.S. Hispanic and non-Hispanic family firms.

► HRM practices in Hispanic versus non-Hispanic firms are examined. ► Theory related to growth of HRM functions in small businesses is developed. ► Previous research into the ethnic family firm is summarized and discussed. ► This research is placed in the context of family social capital and family influence. ► Propositions are advanced related to establishment and evaluation of HRM practices.