Small firms account for a substantial proportion of employment in advanced economies; yet understanding of the quality of jobs in them remains poor. Studies using national-level data find that indicators such as autonomy are high but find it hard to say why. Analyses within small firms stress the structuring of jobs and not size as such. Data from 384 employees in small firms from three contrasting sectors are used to test three hypotheses. 1) There is a pure size effect; such an effect was found in such areas as good relations with managers, and explained in terms of the informality of small firms. 2) Size is in fact a proxy for other influences; there was little evidence of this. 3) Factors not associated with size are more important; features such as autonomy and work pressure reflected sectoral differences and not size. Overall, qualified size effects were found, suggesting the continuation of traditional small-firm relationships.

Small firms operating in competitive conditions are often assumed to follow the dictates of the market. Existing institutionalist research shows that they are in fact embedded in networks and thus shaped by social institutions. It does not, however, show how different types of firm are embedded in different ways. A formal framework is thus developed, setting out the external context and internal resources that shape small firms’ behaviour. The framework is illustrated with empirical examples, and a research programme is outlined.

Strategic networking is widely seen to be important for small firms, but most attention has been given to the operation of networks rather than the nature of links with firms’ strategies and resources. The article addresses these links through a study of 89 firms in three sectors.Variations in their involvement in external relationships are the focus. Previous theory suggests that product market conditions and firms’ internal structures, such as reliance on family labour, will explain the level of involvement. The evidence supports some of these ideas but also shows that the context of the sector is central. For firms, the lesson is to develop distinct kinds of external relationship, depending on the firm’s context and strategic position. The policy implication is that business support agencies need to be sensitive to these highly specific contextual factors.

Low‐wage work is of growing significance in the UK. This article tests the model of the low‐skills equilibrium (LSE) through a study of 27 small firms in a sector, food manufacturing, widely identified as being in an LSE. Three hypotheses are tested. (1) There will be a single, fixed equilibrium. We find more variety, reflecting the specific circumstances of firms. (2) An equilibrium is sustained by weak support institutions and a product market dominated by low value‐added goods. The expectation about institutions is supported, but the product market permitted some, albeit weak, opportunities to escape the LSE. (3) Skills will be low, and workplace regimes will be characterised by work intensification. Some firms were developing employee skills. Work intensification was rare, reflecting the absence of Taylorisation and the importance of face‐to‐face relationships. Overall, some firms had the will to escape the LSE, but weak institutional support and a ready supply of labour substantially reduced the incentives to do so.

This paper presents a study examining the relationship between high performance work systems (HPWS) and organizational performance in Taiwan's semiconductor design industry. The hypotheses are tested by matching and analysing data collected from field interviews with 21 HR managers and surveys of 21 senior operations managers and 1,129 employees. The results of the statistical analysis demonstrate that the effective use of employee empowerment practices is positively related to organizational performance.