Network capability and strategic performance in SMEs: the role of strategic flexibility and organizational ambidexterity

Abstract

In this study, we examine the association among network capability (NC), strategic flexibility (SF), organizational ambidexterity (OA), and strategic performance (SP). Furthermore, the interaction effect of NC and OA on SP is also tested. Data was collected from CEOs and owners/managers of SMEs in Pakistan. Correlation, regression and bootstrap analysis were conducted for the purpose of data analysis. Findings revealed a direct effect of NC on SF and SP. The results also confirm a mediating role of SF in the relationship between NC and SP. Moreover; the moderating role of OA in strengthening the relationship between NC and SP is also confirmed. Although the empirical evidence is well established that NC have substantial contributions in improving organizational performance; however, the existing body of knowledge especially in the context of SMEs is lacking to produce and present a strong evidence on the link between NC, organizational strategies and SP. Therefore, the results of this study suggest that SMEs should pay more attention towards network development and adopting flexible strategies. Therefore, it is concluded that NP are pertinent to make flexible strategies and to improve SP.