Strategic flexibility and SME performance in an emerging economy

2014 ◽  
Vol 27 (2) ◽  
pp. 273-298 ◽  
Author(s):  
Hai Guo ◽  
Zhi Cao
Keyword(s):  
Firm Performance ◽  
Emerging Economies ◽  
Dynamic Capabilities ◽  
Small And Medium Enterprises ◽  
Strategic Flexibility ◽  
Content Type ◽  
Managerial Ties ◽  
Contingency View ◽  
Medium Enterprises ◽  
Dynamic Capabilities Perspective

Purpose – This study aims to address the following question: when strategic flexibility can be most beneficial to small and medium enterprises (SMEs) in the context of emerging economies. Design/methodology/approach – Drawing on dynamic capabilities perspective, this study builds a contingency model and examines it with survey data collected from 166 SMEs in China. Findings – This study finds that the relationship between strategic flexibility and firm performance is extensively moderated by external (competitive intensity and environmental munificence), internal (resource combination activities), as well as bridging factors (managerial ties). Originality/value – The findings contribute to the contingency view of strategic flexibility and firm performance research by incorporating insights from the dynamic capabilities perspective and by expanding the scope of existing research to emerging economies.

Implementing strategic responses in the COVID-19 market crisis: a study of small and medium enterprises (SMEs) in India

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Guydeuk Yeon ◽  
Paul C. Hong ◽  
Elangovan N. ◽  
Divakar G. M.
Keyword(s):  
Emerging Economies ◽  
Management Practices ◽  
Small And Medium Enterprises ◽  
Performance Outcomes ◽  
Future Research ◽  
Strategic Responses ◽  
Content Type ◽  
Study Results ◽  
Medium Enterprises

Purpose The COVID-19 pandemic presents unprecedented challenges for small and medium enterprises (SMEs) in emerging economies. This paper aims to examine how India's SMEs implement their strategic responses in this crisis. Design/methodology/approach The study uses dynamic capability theory to explore the strategic responses of SMEs. Strategy implementation theory helps to explain how they implement innovative practices for outcomes. A research model defines the COVID-19 challenges, strategic responses and performance outcomes. The study reports the findings of an initial pilot study of 75 firms and follow-up case study results in the context of COVID-19. Findings Firms choose their approaches according to their perceived market risks. Case studies illustrate that firms display diverse attitudes depending on their strategic direction, leadership vision and organizational culture. They achieve different outcomes by implementing specific styles of risk management practices (e.g. risk-averting, risk-taking and risk-thriving). Research limitations/implications Although the study context is Indian SMEs, the findings suggest meaningful lessons for other emerging economies in similar crisis events. The propositions may be extended to future research in broad contexts. Practical implications Even in the extraordinary COVID-19 market crisis, SMEs with limited resources display their strategic potential by recognizing their unique capabilities, translating them into effective actions and achieving desirable outcomes. Social implications In the COVID-19 pandemic, top leaders' mental attitude, strategic perspective and routine practices are contagious. Positive leadership motivates both internal and external stakeholders with an enormous level of collaboration. Originality/value This rare study of Indian SMEs provides a theoretical framework for designing a pilot survey and conducting a case study of multiple firms. Based on these findings, testable propositions are articulated for future research in diverse organizational and national contexts.

scholarly journals Innovative solutions to tap “Micro, Small and Medium Enterprises” (MSME) market

2019 ◽  
Vol 27 (1) ◽  
pp. 38-52
Author(s):  
Muhammad Mohsin Hakeem
Keyword(s):  
Financial Institutions ◽  
Emerging Economies ◽  
Risk Sharing ◽  
Small And Medium Enterprises ◽  
Profit Sharing ◽  
Islamic Banks ◽  
Collaborative Model ◽  
Content Type ◽  
Net Worth ◽  
Medium Enterprises

Purpose The purpose of this paper is to indicate an innovative solution to address the financing issues faced by “Micro-, Small and Medium Enterprises” (MSME) in emerging economies. Design/methodology/approach Islamic Financial Institutions (IFIs) especially Islamic banks are competing for high net worth individuals, whereas the MSME sector is largely untapped. A collaborative model for IFIs is suggested, to explore the MSME sector. Islamic Non-Banking Financial Institutions (NBFIs) are operating in these markets through their extensive gross route networks. The multistep collaborative model proposes “Special Purpose Entity (SPE)” partially owned by a single Islamic Bank or consortium and NBFI/s. SPEs can be incorporated with a defined scope, focus areas, risk profile, budget and shareholding patterns. Findings Risk and profit sharing instruments also known as Musharakah and Mudarabah have less than 6 percent share within total financing offered by Islamic banks globally. Risk sharing products offered by Islamic banks are not targeting this sector due to the underdevelopment of instruments, lack of knowledge and resources. Proposed SPEs can operate regionally with a concentration on specific business sectors. Originality/value The SPE model would enable Islamic banks to enter the huge MSME market while mitigating risk. On the contrary, it would enable the large segments of emerging economies (bottom 40 percent population of developing nations) to get involved and actively play their role to attain long-term development goals.

The adoption of cloud computing in small and medium enterprises: a developing country perspective

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Abul Khayer ◽  
Nusrat Jahan ◽  
Md. Nahin Hossain ◽  
Md. Yahin Hossain
Keyword(s):  
Cloud Computing ◽  
Firm Performance ◽  
Small And Medium Enterprises ◽  
Security And Privacy ◽  
Content Type ◽  
Cloud Computing Adoption ◽  
Effort Expectancy ◽  
Toe Framework ◽  
Medium Enterprises ◽  
Organisational Agility

Purpose The purpose of this paper is to examine the determinants of cloud computing adoption in small and medium enterprises (SMEs), further, to measure the effect of cloud computing adoption on cloud-supported firm performance through enhancing organisational agility. Design/methodology/approach The research model is developed by combining two popular theoretical models, namely, the unified theory of acceptance and use of technology (UTAUT) and the technology–organisation–environment (TOE) framework. Data are collected from 372 SMEs to test the model. The strengths of widely used structural equation modelling (SEM) are applied to analyse the data. Findings This study reveals that the significant predictors of cloud computing adoption are performance expectancy; effort expectancy; absorptive capacity; data security and privacy; and perceived trust. Also, cloud computing adoption positively influences firm performance directly and through organisational agility. The results of importance–performance map analysis indicate that effort expectancy falls in the critical zone, which needs to be improved. Originality/value This research is one of few that blends the strengths of UTAUT and TOE framework. The research outcomes yield noteworthy suggestions to cloud providers, managers and government policymakers on ways of motivating the spread of cloud computing in developing countries.

Corporate governance: a conscious approach for Asia and emerging economies

2016 ◽  
Vol 58 (3) ◽  
pp. 317-336 ◽  
Author(s):  
Mahmoud Rajablu
Keyword(s):  
Corporate Governance ◽  
Emerging Economies ◽  
Economic Transition ◽  
Small And Medium Enterprises ◽  
Content Type ◽  
Governance Models ◽  
Anglo American ◽  
Asian Economy ◽  
Corporate Governance Practice ◽  
Medium Enterprises

Purpose Asian economy in transition is facing great deal of challenges, so its corporate governance. This paper investigates the dominant corporate governance models practiced under the liberal market capitalism, cooperative capitalism, collective capitalism and the state capitalism across the continents and proposes conscious governance approach for Asia and emerging economies. Design/methodology/approach The paper explores and compares Anglo-American and Continental European corporate governance models. The report further investigates the development of corporate governance across Asian publicly listed companies, state-owned enterprises, small and medium enterprises and other privately held large enterprises, and raises questions and concerns and derives conclusion. Findings The Asian experience of imposing Western corporate governance models is more of a simplification of tasks based on political, cultural and globalization needs rather than the regions’ economic, financial and social development reality. Practical implications The unique proposition of conscious corporate governance aligns corporate governance practice with Asian socio-economic transition vision and helps with further development and reforms. Originality/value The paper adds to the existing efforts and triggers a fresh view to the Asian and emerging economies corporate governance research and strategy.

scholarly journals Dynamic capability of the firm: analysis of the impact of internationalisation on SME performance in an emerging economy

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mahfuzur Rahman ◽  
Dieu Hack-Polay ◽  
Sujana Shafique ◽  
Paul Agu Igwe
Keyword(s):  
Firm Performance ◽  
Emerging Economies ◽  
Dynamic Capabilities ◽  
Emerging Economy ◽  
Two Dimensions ◽  
Dynamic Capability ◽  
Content Type ◽  
Market Expansion ◽  
The Impact ◽  
The Relationship

PurposeInternationalisation is considered as a key strategy for the growth of Small and Medium Enterprises (SMEs). The purpose of this paper is to examine the relationship between dynamic capability, SMEs internationalisation and firm performance in the context of emerging economies and to evaluate the impact of financial, asset and market expansion on internationalisation of SMEs.Design/methodology/approachUsing primary data from 212 SMEs from Bangladesh, structural equation modelling and mathematical (hierarchical reflective) model, the analysis enabled the measurement of the casual relationship on the impacts of internationalisation.FindingsThe results revealed that internationalisation of SMEs has significant impact on both financial and non-financial performance of SMEs in an emerging economy- Bangladesh. The paper found internationalisation impacts on two dimensions (financial and non-financial) with eight defined indicators – higher sales, higher profit, assets maximisation, market expansion, competitive advantage, better reputation, better customer service and added knowledge.Originality/valueDespite several studies that examine the relationship between SME internationalisation and firm performance, limited research exists on emerging economies. This is contrary to the fact that SMEs are one of the main vehicles for growth in those economies such as Bangladesh. In this research, the authors use the theories of dynamic capabilities to conceptualise how internationalisation becomes a core SME capability for SMEs in an emerging economy.

Identifying the focal role of top management paradoxical cognition in ambidextrous firms

2018 ◽  
Vol 56 (1) ◽  
pp. 47-63 ◽  
Author(s):  
Aparna Venugopal ◽  
Krishnan T.N. ◽  
Manish Kumar
Keyword(s):  
Emerging Economies ◽  
Small Firms ◽  
Small And Medium Enterprises ◽  
Hierarchical Regression ◽  
Top Management ◽  
Organizational Ambidexterity ◽  
Upper Echelons ◽  
Content Type ◽  
Behavioral Integration ◽  
Medium Enterprises

Purpose Past studies have associated top management’s paradoxical cognition and actions with the ambidextrous performance of firms. Compared to large firms, the top management members of small firms play a focal role in resolving the paradoxical tensions of explorative and exploitative innovation strategies. Anchored in the upper echelons perspective, the purpose of this paper is to explore the influences of two top management team (TMT) processes on organizational ambidexterity: TMT behavioral integration and TMT involvement in small and medium enterprises (SMEs). Design/methodology/approach The research is set in the context of 78 hi-tech SMEs across IT, biotech, and electronics industry. Multiple responses were collected from each firm. The authors used hierarchical regression analysis to test the hypotheses. Findings The findings from this paper demonstrate that the process of TMT behavioral integration enhances organizational ambidexterity. However, the results show that neither the top management’s involvement, nor the interaction of the top management’s involvement with the behavioral integration of a TMT, enhances organizational ambidexterity. Research limitations/implications The limited examination of two TMT processes has restricted the scope of this paper. The study has also been unable to measure paradoxical cognition in the TMT objectively and without proxy measures. Originality/value The results from this study add to the existing literature on paradoxical cognition, ambidexterity, and behavioral integration. The results from this study also lend support to the upper echelons perspective. Further, the findings from this paper present significant practical implications by throwing light on the senior team processes necessary for small ambidextrous firms in emerging economies. The volatile and rather unpredictable nature of emerging economies underscore the relevance of examining the facilitating conditions of small ambidextrous firms in these countries.

Examining the determinants of small firms' performance in India

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Abhishek Kumar Sinha ◽  
Aswini Kumar Mishra ◽  
Manogna RL ◽  
Rohit Prabhudesai
Keyword(s):  
Firm Performance ◽  
Research And Development ◽  
Random Effects ◽  
Fixed Effects ◽  
Small And Medium Enterprises ◽  
Capital Intensity ◽  
Small Scale ◽  
Content Type ◽  
Medium Enterprises ◽  
The Impact

PurposeThe objective of the study is to analyse the impact of research and development investment on the firm performance of “small” scale firms vis-a-vis “medium”-scale firms.Design/methodology/approachThe dataset comprised of a balanced panel of 486 research and development conducting Indian manufacturing small and medium enterprises, constructed for the period of 2006–2017. Fixed Effects, Random Effects Model and Hausmann test were used to analyse the determinants of firm performance in manufacturing small and medium enterprises in India.FindingsIt was found that from firms’ research and development (R&D) investments in terms of performance could be attained if simultaneously internationalisation and higher capital intensity could be achieved.Practical implicationsManagers could pay specific attention to the antecedents of firm performance and calibrate their R&D investment, internationalisation efforts and capital intensity simultaneously to achieve higher growth and productivity. For policymakers, the results provide an insight into how the firms in both categories could be differently incentivised, such that resources are better utilised.Originality/valueThe study analysed the determinants of firm performance in small and medium-sized firms at a disaggregate level as well as at a sectoral level using fixed effects, random effects and lagged effects to arrive at novel results, which have important implications for their competitiveness.

The Role of Dynamic Capability in Mediating The Effects of Environmental Dynamism and Managerial Capabilities on Firm Performance: a Preliminary Study

2020 ◽  
Vol 1 (2) ◽  
pp. 70
Author(s):  
Adrian Permana ◽  
Lena Ellitan
Keyword(s):  
Firm Performance ◽  
Significant Influence ◽  
Dynamic Capabilities ◽  
Small And Medium Enterprises ◽  
Sem Analysis ◽  
Product Knowledge ◽  
Environmental Dynamism ◽  
Technology Advancement ◽  
Medium Enterprises ◽  
Managerial Capabilities

Small and Medium Enterprises (SMEs) face many challenges from the coming rapid changes such as technology advancement, competitions, limitations and supports from government regulations, and limitations in terms of capital supply, product knowledge, and company management. Building and maintaining the firm performance of SMEs can be achieved through external factors (environmental dynamism) and internal factors (managerial capabilities). By using the dynamic capabilities as an intervening variable, it is expected to have an impact on firm performance by measuring the perceptive from owners or managers of SMEs. By using PLS-SEM analysis, the selected samples in this study consisted of 30 owners or managers of SMEs from Surabaya, Indonesia. The results indicated that the environmental dynamism and managerial capabilities have a significant influence on firm performance with dynamic capabilities as the intervening variables. Environmental dynamism also has a significant influence on firm performance. Meanwhile, managerial capabilities do not have a significant influence on firm performance.

Environmental management in small and medium enterprises: the role of customer orientation and firm performance

2019 ◽  
Vol 34 (8) ◽  
pp. 1779-1790
Author(s):  
Euehun Lee ◽  
Sang Hyun Jo ◽  
Haeyoung Jeong
Keyword(s):  
Environmental Management ◽  
Firm Performance ◽  
Structural Equation ◽  
Customer Orientation ◽  
Small And Medium Enterprises ◽  
Equation Modeling ◽  
Related Factors ◽  
Content Type ◽  
Show Evidence ◽  
Medium Enterprises

Purpose The purpose of this study is to explore the antecedents and effects of environmental management (EM) and its related factors on firm performance from the perspective of small and medium-sized enterprises (SMEs). Most previous studies have focused on determining the effects of environmental efforts on environmental performance. This study aims to illustrate that effective EM – along with other factors such as customer emphasis, recognition and capabilities – generates positive firm performance for SMEs. Additionally, the stdy aims to show evidence that EM is worth proactively pursuing rather than being viewed as a burden and being subject to reactive task by SMEs. Design/methodology/approach The authors collected data via a questionnaire from 300 SMEs through a professional research company. They then used the data to assess a model and determine the relationships between the different constructs using structural equation modeling. Findings The results testify to the optimal structure between the study’s constructs: customer emphasis on EM, recognition and implementation of EM, capabilities and the performance of SMEs that have implemented EM. The main finding is that EM has a positive relationship to firm performance. Originality/value This study’s findings could likely persuade SMEs and policymakers to more proactively engage in EM. It also contributes to offer evidence that customer orientation plays an important role in SMEs’ implementation of EM and its impact on firm performance.

Does supply chain finance improve SMEs performance? The moderating role of trade digitization

2018 ◽  
Vol 26 (1) ◽  
pp. 150-167 ◽  
Author(s):  
Zulqurnain Ali ◽  
Bi Gongbing ◽  
Aqsa Mehreen
Keyword(s):  
Supply Chain ◽  
Firm Performance ◽  
Small And Medium Enterprises ◽  
Risk Mitigation ◽  
Content Type ◽  
Supply Chain Finance ◽  
Using Data ◽  
Medium Enterprises ◽  
The Relationship

Purpose A growing need for financing in small and medium enterprises (SMEs) has become a significant obstacle to the development of firms. To remove this barrier, the purpose of this paper is to examine how supply chain finance (SCF) assists the firms to improve their performance by utilizing the resource-based view (RBV). Furthermore, the present study also pursues to test the effect of trade digitization as a moderating variable in the relationship between SC finance and the firm performance. Design/methodology/approach Using data from the textile sector, the authors run confirmatory factor analysis in AMOS 24 and hierarchical linear regression model in SPSS 23 to measure the proposed model and hypotheses, respectively. Findings The study suggests that SCF significantly improves the SMEs performance. Moreover, trade digitization strengthens the relationship between SCF and SMEs performance. Thus, the current study significantly describes the firm RBV through SCF and trade digitization to predict the SMEs performance. Practical implications SMEs entrepreneurs or executives can optimize the working capital through SCF and enhance the visibility of transactions through digitization for improving SMEs performance. Moreover, SCF protects the SMEs due to its nature of risk mitigation strategy. Originality/value This study covered the unexplored gap in the previous literature of supply chain management by establishing the relationship between SCF and the firm performance empirically while identifying the role of trade digitization as moderating variable in the context of textile SMEs by employing RBV theory.

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