The relationship among distinctive capabilities, business strategy, environment and performance: a proposed model of manufacturing SMEs in Palestine

Abstract

This paper discusses a study to explore the relationship among distinctive capabilities, business strategy, environment and performance of manufacturing small and medium enterprises (SMEs) in Palestine. More specifically the study attempts to determine whether the performance of manufacturing SMEs in Palestine is associated with their choice of business strategy they adopt, their distinctive capabilities, dimensions such as administrative capabilities, production/operation capabilities, marketing capabilities, human resources capabilities, environment uncertainty and performance. The model of the study illustrates that the relationship between independent variables which are distinctive capabilities and business strategy, moderating variable which is business environment while the dependent variable is the performance. The result of this study would provide a great benefit for owner-managers, government policy makers, scholars, and educators on the concepts of distinctive capabilities, business strategy, environment and their relationship with performance in the context of manufacturing SMEs in Palestine.