Impact of network capability on small business performance

Abstract

Purpose– The purpose of this paper is to measure the impact of network capability (NC) on small enterprise performance via knowledge creation, and two dimensions of entrepreneurial orientation (EO): competitive aggressiveness and innovativeness.Design/methodology/approach– The authors propose a theoretical model that was tested using a survey instrument administered to owners and managers of small-sized enterprises within the United Arab Emirates. Theory development was assisted by semi-structured interviews with an independent sample of owners and managers of small enterprises.Findings– The results show that NC is positively related to knowledge creation and that competitive aggressiveness and innovativeness are key mediators between knowledge creation and firm performance.Research limitations/implications– The study contributes to theoretical development by integrating the domains of NC and knowledge creation to EO and small business performance. The authors show that the conversion from NC to small business performance is mediated by knowledge creation and the two dimensions of EO: innovativeness and competitive aggressiveness.Practical implications– The study findings present interesting practical implications for small business owners seeking to shift their firm’s orientation toward being more entrepreneurial.Originality/value– The study highlights the crucial role innovativeness and competitive aggressiveness play as mediators when the relation between knowledge creation and small business performance is examined.