Literature Review
2.1 Introduction
The aim of this study is to investigate the human resource management (HRM) practices of small and medium-sized enterprises (SMEs) in China. This chapter intends to provide the reader with a theoretical basis of the study through reviewing the concepts, theories and past studies focusing on this research area. This chapter consists of four main sections. The first section is to review the definitions and concepts relating to SMEs and theories that explain SMEs. The second section is to review concepts, theories and practices about human resource management. The third section is to review the reference怎么写？
literature focusing on human resource management practices of SMEs. And the last section is to review the past studies focusing on human resource management practices of SMEs in China.
2.2 Definition of the Concepts of SMEs
2.2.1 Definition of the Concepts of SMEs in General
The definition of small and medium-sized enterprises (SMEs) varies in the different countries, because there are different criteria to defined SMEs in the different countries according to the different political, economic, social, cultural and market environments in these countries.
There are special criteria to differentiate SMEs from other companies in the European Union. In the European Union, a medium sized enterprise is a company with fewer than 250 employees while a small sized enterprise is one with less than employees, and the annual turnover of the enterprises should be less than €50 million (EU Commission, 2003).
In the United States, there is no distinctive way to identify SME, and typically it depends on the industry in which it competes (Phukan and Dhillon, 2000). Relative to the enterprises that dominate the industry, other companies are generally looked as SMEs in the Untied States.
As a developing country with the special political, economic and market environment, SMEs are also defined differently in China. According to the Law of Chinese Small and Medium Sized Enterprises published in 2002, the criteria of the number of employees, sales revenues and total assets are used to define SMEs based on the different industries in China. Although the criteria to define SMEs are different in the different industries, SMEs in China can be generally defined as the enterprises with less than 2000 employees, less than RMB 30 million annual sales revenues and less than RMB 150 million total assets (Law of Chinese Small and Medium Sized Enterprises, 2002 ).
2.2.2 Theories that Explain SMEs
As a phenomenon, small and medium sized enterprises (SMEs) receive more attention with the increasingly important role of them in economic development. Generally SME refers to a business that maintains revenues or a number of employees below a certain standard (Fernandez and Nieto, 2005). The amount of revenues and the number of employees are two general criteria used to measure SMEs from large companies. According to Martin (1999), the SME sector is segmented and categorized according to measurable variables such as size and industrial classification. The variables of size and industrial classification are important because the size or scale of the enterprises is restricted to the development of the industry (Martin, 1999). According to the different industrial classification, some enterprises are SMEs in some industries but the enterprises with the same sizes may be the large enterprises in other industries. | 
