This research explores how small and medium-sized enterprises (SMEs) implement talent management while navigating the pressures of state, union, and market institutional logics. Rather than being passive participants, these organizations exercise agency through specific tactics, such as using informal practices to bypass rigid regulations or framing selective development as universal programs. These strategic responses frequently trigger internal tensions, forcing managers to balance operational flexibility against employee security and strategic effectiveness against social legitimacy. The study highlights how geographic location and resource constraints further complicate these efforts, often leading SMEs to imitate larger firms to gain credibility. To overcome these obstacles, the research suggests that SMEs should move toward collective advocacy and ecosystem partnerships to build sustainable, authentic talent strategies. This analysis ultimately underscores that successful talent management in smaller firms requires a deep understanding of context-specific belief systems rather than simply adopting standard corporate models.

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