Managers in fast growing SMEs face the developmental challenge of how to control increasing numbers of employees. We examine this by focusing on how the growth rate of small-medium sized enterprises (SMEs) influences employee empowerment within the context of China. We argue that faster growing Chinese SMEs are reluctant to empower their staff compared to slower growing ones. Drawing on the communication literature, we also hypothesize the indirect impact of different types of communication channels (face-to-face vs. computer-mediated) on the relationship between rate of employee growth and employee empowerment. The empirical findings are based on a survey of 114 SMEs in China and confirm a negative impact of growth rate on employee empowerment. The results also provide partial support for technology-mediated communication channels and strong support for face-to-face communication channels as providing boundary conditions to this relationship. The study contributes to the literatures on employee empowerment in changing organizational contexts by highlighting the role of communication channels as change takes place. Practical implications for how we understand organizational challenges faced by SME managers as their ventures grow are discussed.
