Adaptive practices in SMEs: leveraging dynamic capabilities for strategic adaptation

PurposeA global pandemic, broken supply chains, workforce constraints, technological advancements in artificial intelligence, etc. illustrate the continual threats that SMEs face. Extending the dynamic capability concepts of sensing, seizing and transforming, this research investigates practices by which SMEs successfully adapt over time.Design/methodology/approachA comparative case study method was employed using a purposive sample of SMEs, consisting of three American firms and one Canadian firm.FindingsThree sets of organizational practices, termed adaptive practices, that underlie dynamic capabilities for successful adaptation were identified: (1) continuous learning and process improvement, (2) leveraging reciprocal relationships and (3) communicating effectively.Research limitations/implicationsThe selected cases are from two countries in North America. Using a qualitative, inductive process, the authors are able to identify patterns of actions within various organizations; however, they are not able to establish causality.Practical implicationsThis study provides practical guidance for leaders to take action to improve their SME's dynamic capabilities for adaptation through creating coherent bundles of specified adaptive practices.Social implicationsBetter understanding of how SMEs successfully adapt to high uncertainty and business viability threats can result in multidimensional (e.g. financial, emotional) and multi-level (individual, family, community), positive outcomes for societal stakeholders.Originality/valueThe findings of this study build on the literature of dynamic capabilities and organizational practices and provide a practical foundation for effective adaptation, labeled as adaptive practices.

What do we know about capabilities and early internationalization? A review and synthesis

Purpose The purpose of this study is to organize and assess knowledge on the capabilities pertinent to the early internationalization of born globals (BGs) and international new ventures (INVs). Design/methodology/approach A systematic approach is used to search, code, organize and synthesize 155 peer-reviewed journal articles on capabilities and early internationalization. Findings The study delimits eight operational and five dynamic capabilities. The synthesis links capabilities to three antecedents (i.e. firm specific factors, managerial socio cognitive attributes and market factors) and three outcomes (i.e. precocity, survival and performance). While 7 of the 12 linkages identified are well-established, relationships involving market factors, survival and dynamic capabilities are sparsely researched. Research limitations/implications The authors know more about the effects of firm specific factors and managerial socio cognitive attributes on operational and dynamic capabilities than we do the influence of market factors on either group of capabilities. Likewise, the authors know more about the influence of operational and dynamic capabilities on performance than we do their impact on precocity or survival. Practical implications As the pandemic has shown, businesses with adaptable capabilities (e.g. shifting from a brick and mortar to an online/omnichannel approach or micro-breweries competent to switch from manufacturing beer to hand sanitizer) have increased their chance of survival while helping society cope. Originality/value This to the authors’ knowledge is the first study to provide a comprehensive review of literature on the nebulous concept of capabilities, in the context of the burgeoning research stream on early internationalization.

Small and Medium Enterprises in Mexico and the Craft Beer Sector in Baja California: Dynamic Capabilities, Culture, and Innovation

This article studies how Small and Medium Enterprises (SMEs) operating in emerging economies implement adaptative strategies to respond to constant changes in demand and global uncertainties, such as those stemming from the current SARS-COV2 pandemic. In this study the knowledge management capabilities used by SMEs in the craft beer sector in a region of northern Mexico are the focus of analysis. The objective is to present the competitive capabilities that craft beer sector has demonstrated in Baja California region and how small companies compete with the national industrial brewery and survive. Sources are data from a sample of companies and interviews with brewery owners, with which the analysis approaches, also, the Baja California business environment. The article highlights the routes of creativity, innovation, and symbolic capital of the companies in the region, and uses ideas from dynamic capabilities and knowledge management theoretical frameworks, to understand the craft brewery milieu. The conclusions in this article include the confirmation about the usefulness of these analytical frameworks based in the capabilities approach and the territorial knowledge. Also, the description of the existence of a complex Baja Californian milieu, where a multimodal scheme of craft beer characterized by different places of distribution and types of beer container, food-districts, at Mexicali, Tijuana, and Ensenada and a second generation of entrepreneur groups leading local business, is identified.

Responsible I(m)ovation in Asia Pacific regions

Over the past 20 years, a debate has developed on the differences between innovation and imitation strategies as mechanisms by which businesses operating in the Asia Pacific region may gain a competitive advantage. The current research contributes to this debate from a different perspective by exploring some of the challenges and opportunities associated with the combination of both strategies into what has been defined as imovation. Imovators and imovations do not stand alone in business ecosystems. Rather, they should be embraced in the context of sustainability-related virtues and emerging capabilities, such as ethical behaviour, co-responsibility and positive social impact. Taking dynamic capabilities as a theoretical lens, this paper conducts an empirical investigation of responsible imovation in a sample of 180 enterprises operating in the Asia Pacific market. In particular, this research evaluates the relationship between dynamic capabilities and imovation capabilities using a logistic regression analysis whereby we correlate the three main features of imovation strategies: strategic alliances, strategic decision-making and product innovations. To the best of our knowledge, ours is the first study to focus on responsible imovation in the Asia Pacific market from an empirical perspective. The research highlights the key organisational and individual actions with the potential both to preserve existing capabilities and to create and integrate new ones. Our findings highlight the importance of technology adoption for responsible imovation to become more effective and accessible to imovators in the Asia Pacific business ecosystem. We conclude that responsible imovations combined with product-level innovations and core dynamic capabilities pave the way towards more rapid growth and a more sustainable competitive advantage.

Open innovation, dynamic organizational capacities and innovation performance in SMEs: Empirical evidence in the Tunisian manufacturing industry

In this paper, the main objective is to examine inbound open innovation adoption by exploring its antecedents in terms of dynamic organizational capabilities, its implications on innovation performance, but also its mediating role between these capabilities and Small and Medium Enterprise (SME) innovation performance. Therefore, a conceptual model was proposed and empirically tested on the basis of data extracted from a survey involving a sample of 228 Tunisian manufacturing SMEs and analyzed through the Structural Equation Modeling method. In doing so, this paper adds to the existing literature on open innovation in SMEs and fills a neglected theoretical gap by proposing a link between dynamic capabilities theory and the open innovation paradigm, two literatures that have little overlap, to improve current understanding of innovation performance in SMEs. Ultimately, by empirically confirming the significant relationship between dynamic organizational capacities and innovation performance through the mediating role of open innovation, our results are mainly relevant for entrepreneurs and innovation managers in SMEs who can find valuable guidance on how to strengthen innovation performance under the nexus between the dynamic capabilities perspective and open innovation by focusing on the development of three capabilities that are dynamic capabilities, absorptive capability, and appropriation capabilities.