Abstract
The aim of this paper is to analize the influence of professionalization over firm’s performance and the effect of two mediating variables, risk-taking and technological innovation. A total of 310 Spanish SMEs were surveyed, and the study was conducted using partial least squares path modelling (PLS-SEM) technique. The findings showed that firm’s performance is influenced by professionalization, risk-taking and technological innovation. These effects are not only direct and positive, but there are also important indirect effects that reinforce the positive effects of professionalization on firm’s performance. This research contributes to the literature on professionalization considering mediating effects of risk-taking and technological innovation in the relationship between professionalization and firm’s performance. The results provide interesting implications for theory and practice, indicating how companies can orient their strategies with the aim of gaining competitive advantage in order to increase their performance.
Highlights
In the current economic and social climate, companies, especially Small and Medium-sized Enterprises (SMEs), have to maximise their growth opportunities, so they have to direct their strategies towards seeking competitive advantages that will allow them to differentiate themselves from their competitors
The findings in this paper have demonstrated the effect of professionalization on firm performance and the mediating effect of risk-taking and technological innovation on this relationship
Several studies have examined the impact of professionalization on firm performance, and in general, the results show that professionalization improves financial performance. [7,8,9]
Summary
In the current economic and social climate, companies, especially Small and Medium-sized Enterprises (SMEs), have to maximise their growth opportunities, so they have to direct their strategies towards seeking competitive advantages that will allow them to differentiate themselves from their competitors. This search for competitive advantages requires an adequate professionalization of the companies. As Dieguez-Soto et al [1] have already argued, professionalization increases profitability and achieves competitive advantages for firms. Professionalization is recognized as a need for firms to be successful [2] and achieve improved financial and non-financial performance.
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