Performance Of Small And Medium-sized Enterprises Research Articles

Digital platforms and SMEs’ performance: the moderating effect of intellectual capital and environmental dynamism

PurposeThis research aims to shed light on the linkage between digital platforms and small and medium-sized enterprises (SMEs) performance and consider the moderating effect of intellectual capital and environmental dynamism.Design/methodology/approachThis study applies a quantitative approach using a sample of primary data from 508 managers and directors of Vietnamese SMEs, using structural equation modeling (SEM).FindingsThe utilization of digital platforms by managers and directors has a positive impact on enhancing intellectual capital. However, under the influence of external environment changes, this trend may shift towards a negative direction. The ability to utilize digital platforms, whether directly or through information communication, positively affects the performance of businesses. Research has shown that the positive promotion of digital platform capability for intellectual capital factors such as human capital, organizational capital, and relational capital decreases when the external environment changes in the context of uncertain globalization.Originality/valueThis research focuses on SMEs operating in the technology and e-commerce sectors and it evidences that digital platforms are an effective baseline driver for promoting high-performing SMEs. By examining the connection between digital platform’s capability and IC and the significance of intellectual capital for SMEs’ performance, this study adds to the body of literature already available on the destructive regulatory potential of environmental dynamism. This study broadens the dynamic capabilities theory’s outcome audience and adds a new dimension to the impact of the digital platform’s capability (resource utilization) on the performance of SMEs.

Digital transformation and firm performance in innovative SMEs: The mediating role of business model innovation

This study investigates the consequences of digital transformation (DT) over performance in the case of innovative Small and Medium-sized Enterprises (SMEs). SMEs represent a heterogeneous kind of company in terms of capabilities. By focusing on their innovative character as a boundary condition, we increase our understanding of this relationship. We further research the mediating role of business model innovation (BMI) in the relationship between DT and performance. A sample of 434 innovative Spanish SMEs is used to test the research model through Partial Least Squares Structural Equation Modelling (PLS-SEM). We find that BMI partially mediates the positive relationship between DT and performance. This finding extends our understanding of BMI as an alignment tool and a blueprint for innovative SMEs channeling their investments in DT towards the improvement of performance. Finally, we put forward managerial implications and propose future avenues of research.

The Impact of Organizational Culture on the Innovation and Performance of SMEs: A Comparative Study between Germany and Thailand

Innovation is recognized as one of the key factors for economic growth and building a competitive advantage for small and medium-sized enterprises (SMEs) in today’s world. The purpose of this research is to investigate how innovation is related to organizational culture and performance of SMEs located in Germany and Thailand. Based on an extensive literature review, the authors propose a comprehensive research model that integrates the competing values framework, organizational innovation and the balanced scorecard framework. Data from 213 respondents across both countries were collected and analyzed utilizing structural equation modelling. Results show that despite their contrasting national cultures, adhocracy culture is a key driver of organizational innovation in both countries, leading to enhanced overall organizational performance, particularly in financial and customer dimensions. This study enriches organizational behaviour research with unique cross-cultural perspectives and equips leaders of SMEs with practical strategies for cultivating an adhocracy culture across diverse cultural landscapes.

Understanding dollar dynamics and SME performance in GCC economies

PurposeThis study investigates the impact of US dollar volatility and oil rents on the performance of small and medium-sized enterprises (SMEs) in the Gulf Cooperation Council (GCC) region, with an emphasis on understanding how these factors influence SME financing constraints in economies with fixed currency regimes.Design/methodology/approachEmploying a random effects panel regression analysis, this research considers US dollar volatility and oil rents as independent variables, with SME performance, measured through the financing gap, as the dependent variable. Controls such as trade balance, inflation deltas and gross domestic product (GDP) growth are included to isolate their effects on SME financing constraints.FindingsThe study reveals a significant positive relationship between dollar volatility and the financing gap, suggesting that increased volatility can exacerbate SME financing constraints. Conversely, oil rents did not show a significant direct influence on SME performance. The trade balance and inflation deltas were found to have significant effects, highlighting the multifaceted nature of economic variables affecting SMEs.Research limitations/implicationsThe study acknowledges potential biases due to omitted variables and the limitations inherent in the use of secondary data.Practical implicationsFindings offer pertinent guidance for SMEs and policymakers in the GCC region seeking to develop strategies that mitigate the impact of currency volatility and support SME financing.Originality/valueThe research provides new insights into the dynamics of SME performance within fixed currency regimes, which significantly contributes to the limited literature in this area. The paper further underscores the complex connections between global economic factors and SME financial health.

The Impact of Performance Appraisal and Training and Development on The Financial Performance of Small and Medium-Sized Enterprises (SMEs)

This study aims to measure the influence of human resource management (HRM) practices on the financial performance of small and medium enterprises (SMEs). It notably focuses on analyzing the effects of training and development programs and performance appraisal methodologies. In order to carry out this study, a quantitative methodology was employed, which entailed the use of self-administered questionnaires. A linear regression analysis was conducted on data obtained from 130 small and medium-sized enterprises (SMEs) to examine, assess, and improve the relationship between performance appraisal, training and development, and the financial performance of SMEs. The results indicate a clear and direct association between training and development, performance appraisal systems, and the financial success of small and medium-sized enterprises (SMEs). The findings highlight the critical importance of HRM practices as strategic investments rather than just administrative tasks. These findings provide useful insights for scholars and practitioners, offering a framework for implementing training and development and performance evaluation procedures to achieve financial success in small and medium-sized enterprises (SMEs), not just in Kosovo but also in similar global contexts.

Personality-Traits Taxonomy and Operational and Environmental Performance: A Cross-Sectional Analysis of Small and Medium Scale Manufacturing Enterprises

This research aimed to assess the operational and environmental performance of small- and medium-sized enterprises (SMEs) in Nigeria in relation to their adoption of personality-traits taxonomy (i.e., conscientiousness, openness to experience, extraversion, neuroticism or emotional resilience and agreeableness). The survey-based study involved the entire population of SME operators in South West Nigeria, totaling 1842 individuals (i.e., entrepreneurs). Through the use of stratified random-selection methods, a sample size of 420 was chosen. Data was collected, and both structural and measurement models were used to assess it. The results of the study demonstrate that personality traits have a significant influence on how successful SMEs function. The results also demonstrate that personality traits have a positive impact on SMEs’ environmental performance. These findings suggest that sustaining operational and environmental performance may be accomplished by resource allocation, promoting diversity and inclusion, and employing trustworthy assessment methods. To enhance both their overall operational performance and their environmental performance in particular, the study advises SME operators in Nigeria to undertake proper management of personality traits for sustainability. The paper recommends for greater research on this subject and emphasises the necessity of understanding how personality factors impact operational and environmental performance in Nigerian SMEs.

The Non-Linear Impact of Digitalization on the Performance of SMEs: A Hypothesis Test Based on the Digitalization Paradox

While digitalization offers new opportunities for small- and medium-sized enterprises (SMEs), it also introduces the phenomenon of the “digitalization paradox”. This paper develops a theoretical model comprising digitalization, digital technology–business alignment, external social capital, and SMEs’ performance, rooted in strategic alignment theory (SAT) and social capital theory (SCT). The necessary data for the study were obtained by distributing questionnaires to 352 small and medium-sized enterprises engaged in digital practices in China, and hierarchical regression analysis was employed to investigate the impact of digitalization on the performance of SMEs and its boundaries of influence. The results indicate an inverted U-shaped relationship between digitalization and SME performance, with both digital technology–business alignment and external social capital serving as positive moderators. Specifically, digital technology–business alignment and external social capital both enhance the positive impact of digitalization on the performance of SMEs and mitigate its negative effects. The findings enhance comprehension of the “digitalization paradox” and offer new insights and solutions for SMEs to navigate the opportunities and challenges of digitalization.

Strategic Marketing Communication for Sustainable Growth: Examining the Influence on Export Intentions and Financial Performance in Iron and Mining SMEs

The positive contributions that small and medium-sized enterprises (SMEs) make in the iron and mining industries are vital for the development of the global economy. However, their costly operations in disadvantaged regions and the green economy interests of financial institutions have made them face more financial obstacles that decrease their export and financial performance. In this regard, their ability to use marketing communication tools that are included in the dynamic capability of Resource-based View theory (RBV) can reduce their exporting and financial performance concerns. This is because using these marketing communication tools presents them with less costly marketing solutions and provides competitive advantages for SMEs against their larger-sized rivals. In this regard, this paper aims to analyze the impact of one-way (telemarketing, direct mail, website, etc.) and two-way marketing communication tools (social media platforms) on SMEs' export intention and financial performance from the iron and mining industries. The research team collected data from 1221 SMEs operating in Eastern European countries via an internet-mediated questionnaire to hit this target. The impacts of the marketing communication tools on export intention and financial performance are analyzed via the Binary Logistic Regression Test. The results show that while using one-way and two-way marketing communication tools does not affect the export intention of SMEs, it negatively affects their financial performance. The reason for these results might be related to the location and sector in which SMEs operate.

Examining the impact of managers’ network size on SME performance: a case study of Interurban and local road freight transport in the Paris department

AbstractThis study focuses on the interplay between managers’ personalities, relationships, and company performance. We investigate the influence of managers on a sample of small and medium-sized enterprises (SMEs), specifically examining the size of their networks. Our focus is on enterprises working in the sector of interurban road freight transport and local road freight transport within the Paris department. The model we propose aims to understand the advantages of a well-established and interconnected network for SME performance. We analyse how the different characteristics of a company as well as its manager’s personality and network ties can affect company performance. By drawing upon the dependency network approach, the Resource Dependency Theory, and network theory, we investigate the connection between resource and network dependencies, and how these influence firms’ behavior and long-term growth. Through our theoretical review and by analyzing a database of selected companies through the multiple linear regression and the Principal Component Analysis, we find that networking plays a vital role and significantly impacts a company’s revenues and costs, although not to the extent that we predicted. The results of our research provide evidence of the correlation between networking and performance ratios, but only partially confirm our hypotheses.

Eco-dynamic capability: A surest way to sustainability performance of SMEs?

PurposeTo endure and cope in the rapidly changing environment, it is required of firms to gain a deeper acquisition of knowledge on market dynamics and subsequently concentrate on corporations' capacity to create, restructure and integrate their internal and external competences. Hence, the objective of this study is to investigate the influence of eco-dynamic capability (EDC) on the sustainability performance of small and medium-sized enterprises (SMEs).Design/methodology/approachStructured questionnaires were used to obtain primary data. The data were solicited from 500 employees and owner-managers of SMEs. The study’s hypotheses were tested using standard multiple regression through IBM SPSS Statistics (version 24).FindingsThe study revealed that EDC has a substantial positive effect on the economic, social and environmental sustainability performance dimensions.Originality/valueThe focus of this study is on EDC. Thus, although dynamic capability has been the subject of substantial study, little is known regarding the effect of EDC on the economic sustainability performance (ESP) (financial), environmental sustainability performance (ENSP) and social sustainability performance (SSP) of SMEs, predominantly amongst SMEs in emerging economies.

Understanding the Technological-Organizational-Environmental Concepts on SMEs' Performance in Emerging Market

This research focuses on integrating digital platforms in small and medium-sized enterprises (SMEs), emphasizing the importance of efficient stakeholder communication for their success. Additional scholarly investigation is required to examine the correlation between SME success and social media adoption, with a focus on emerging countries. This study examines how technology-organizational-environmental (TOE) factors affect digital social communication and SME success in developing nations. Through employing the TOE framework, this study attempts to explain the determinants of social media adoption and its subsequent effect on the performance of SMEs. Data will be gathered through the utilization of a well-organized questionnaire disseminated online to a randomly selected group of participants from SMEs in Indonesia. Partial-leastsquares- structural-equation-modeling will be employed to conduct the route analysis, with the involvement of SME owners, executives, and managers. Furthermore, the study will evaluate how social media influences the connection between TOE qualities and SME performance. The findings will demonstrate a clear and favorable correlation between the TOE components, and the interaction between SME performance and social media adoption. This research will enhance the existing body of knowledge in this domain by offering valuable insights for professionals and scholars interested in the use of social media in SMEs.
 Keywords: digital social communication, SME, TOE

Strategic Model for SMEs: A Conceptual Framework for Navigating Business Success in South Sumatra

This study focuses on the development of a strategic model to enhance the performance of small and medium-sized enterprises (SMEs) in South Sumatra, Indonesia. Recognizing the significant contribution of SMEs to national GDP globally, particularly in Indonesia, this study focuses on South Sumatra to explore tailored approaches for SME optimization in the region. The study presents an in-depth analysis of the relationship between business strategy and SME performance, considering the business environment of South Sumatra as a key moderating factor. The study aims to provide actionable insights and strategies for SMEs in South Sumatra by offering a comprehensive framework that aligns strategic initiatives with regional market dynamics. This endeavor is geared towards boosting their performance and, consequently, their contribution to the broader Indonesian economy. The ultimate goal is to establish a robust, adaptable model for SME success in varied economic landscapes, with a particular focus on the distinctive challenges and opportunities in South Sumatra.

Working Capital Management and Financial Performance of Small and Medium-Sized Enterprises (SMEs) and SACCOS in Kenya

Small and medium-sized enterprises (SMEs) play a critical role in driving economic growth, creating employment opportunities and promoting local revenue generation in Kenya. However, they face various challenges such as limited financial resources, inadequate infrastructure and volatile market conditions. Effective working capital management (WCM) is essential for SMEs to overcome these obstacles and achieve sustainable success. The aim of this research is to examine the impact of WCM on the financial performance of SMEs in Kenya. This paper uses literature review methodology to draw conclusions. The literature review provides insights from various studies that highlight the importance of credit management and internal factors that influence organizational performance. An efficient WCM is crucial for ensuring the financial stability of companies, especially SMEs. Poor WCM can lead to financial challenges and possible bankruptcy, while effective management can significantly increase financial efficiency. WCM involves monitoring a company's current assets and liabilities to ensure timely commitments while minimizing associated costs. This research contributes to understanding the importance of WCM for SMEs in Kenya and provides stakeholders with practical insights to improve financial performance through effective WCM strategies tailored to the Kenyan context.

Impact of Partial Lean Thinking on the Financial Performance of Small and Medium-Sized Enterprises: An Exploratory Study in a Developing Economy

Although evidence indicates impressive benefits of lean thinking for large enterprises, a lot of skepticism still remains about the adoption of lean in Small and Medium-sized Enterprises (SMEs). The current study intended to develop an understanding of the core concept of lean thinking in SMEs and to empirically investigate the relationship among lean adoption, operational measures, and financial performance. Particularly, the study highlights the mediating role of operational measures in deriving the financial performance associated with the adoption of lean in SMEs. The study comprises a survey; data is collected from 382 SMEs, and the hypothesized relationships are then analyzed using Structural Equation Modeling (SEM). The findings suggest that even in the case of partial implementation, lean approaches are capable of improving the operational measures and financial performance of SMEs. The impact of lean adoption on financial performance is found to be mediated by operational measures.

Improving Business Performance For SMEs: The Power Of Co-Innovation, And Business Networks Resilience In The Covid-19 Pandemic

The Covid-19 outbreak-induced economic crisis has been considered significantly worse than the Great Depression (1929–1939), which had been seen as the worst economic catastrophe in history. Small and medium-sized enterprises (SMEs) have suffered heavier losses than large organizations during the pandemic. However, empirical results regarding relationships among resilient factors and SMEs performance have been inconclusive. This study builds on the Resources-based-view and Contingent Theory to examine one resilient factor as co-creation. Following a comprehensive literature review, quantitative research was adopted in this paper. There were a total of 450 SMEs participating in this study. SmartPLS 3.0 was performed on the relationship between co-innovation and SMEs outcomes. The findings show a positive and direct impact of co-innovation and organizational resilience and further leverage SMEs’ performance. Furthermore, it was found that co-innovation also boosts the resilience of business networks, SMEs which plays a critical role to business survival. Driven from these findings, SMEs in emerging markets should consider and focus on co-innovation with their stakeholders to overcome the long-lasting impacts from the pandemic.

Dynamic pathways to SMEs performance: Unraveling the influence of organizational learning capability, innovation, market dynamism and market responsiveness in an African emerging economy

ABSTRACT This study explores the complex relationships among organizational learning capability (OLC), innovation, market dynamism, market responsiveness, and the performance of small and medium-sized enterprises (SMEs) in African emerging economies. Our research investigates the role of innovation as a mediator in the OLC-performance relationship, the moderated mediation impact of market dynamism, and the mediated moderation effect of market responsiveness in the indirect relationship. Using data from 225 SMEs from Ghana, and Hayes’s PROCESS bootstrapping procedure the findings confirm that innovation mediates the OLC-performance. Although, market dynamism does not moderate the OLC-innovation relationship, it moderates the indirect relationship between OLC and performance through innovation, with a stronger effect at high levels of market dynamism. Additionally, market responsiveness negatively moderates the innovation–performance relationship, but it amplifies the OLC-performance relationship via innovation, with a more pronounced effect at low levels of market responsiveness. The findings indicate that the OLC-performance relationship is not only complex but depend in firm-specific and external factors.

Breaking the budget chains: Empowering Iraqi small- and medium-sized enterprises through Beyond Budgeting

Background: Traditional budgeting has faced criticism, leading researchers to explore alternative management control methods such as Beyond Budgeting. Despite its potential benefits, Beyond Budgeting adoption remains limited.Aim: This research investigates Beyond Budgeting’s effect on Iraqi small- and medium-sized enterprise (SME) performance, focusing on competitive advantage.Setting: The study targets Iraqi SMEs, considering their diverse business landscape. A random sample of 353 accountants was chosen from a research community of 22 974 individuals. SPSS and AMOS 26 software and a custom questionnaire were used.Method: The authors conducted multiple linear regression analysis and Structural Equation Modeling to address our study’s objectives. Additionally, we utilised maximum likelihood procedures to assess factor loadings, construct validity and reliability.Results: Beyond Budgeting implementation significantly affected both financial and nonfinancial performance. It demonstrated positive effects on cost leadership and competitive advantage differentiation. However, an indirect negative impact on nonfinancial performance was observed through the influence on cost leadership, suggesting a trade-off between cost reduction and other nonfinancial factors.Conclusion: The study acknowledges limitations in sample size and the need for considering additional factors. Further research is required to understand Beyond Budgeting’s limited adoption in Iraq. The study contributes valuable insights on Beyond Budgeting as a substitute for traditional approaches, benefiting managers and policymakers.Contribution: This study emphasises Beyond Budgeting’s significant impact on Iraqi SME performance, highlighting the relationship between Beyond Budgeting, competitive advantage strategies, financial and nonfinancial performance. The findings provide insights for enhancing budgeting practices in Iraqi SMEs.

Exploring critical internal enablers to SMEs export performance: evidence from Qatar

This study seeks to provide a contextualized and nuanced understanding of what constitutes internal enablers among small and medium-sized enterprises (SMEs) in support of their export activities in international markets. We unpacked a unique set of critical enablers that can be cultivated as the internal impetus for enhancing the export performance of SMEs in a less-researched emerging market, Qatar. The study employs a qualitative approach for collecting, analyzing, and interpreting data, which were collected through in-depth interviews with 20 SMEs managers from 11 manufacturing sub-sectors. A thematic analysis of our data reveals five key internal enablers needed for better export performance. These comprise employees with networking skills, effective supply chain management, product diversification, digitalization, and market intelligence capabilities. This research offers empirical insights into what enables non-hydrocarbon manufacturing SMEs to enhance their export performance.

Social competence and SME performance: extending the nonfinancial perspective

PurposeThe purpose of this paper is to investigate the influence of entrepreneurs’ social competence (SC) on small and medium-sized enterprise (SME) performance.Design/methodology/approachPrimary data of 250 manufacturing SMEs were collected through a survey method. The influence of SC on performance was tested using structural equation modelling (SEM).FindingsOverall, the findings suggest that SC dimensions have a positive influence on SME performance in terms of nonfinancial perspective. More clearly, the findings show that out of five dimensions of SC, which include social adaptability, social perception, social expressiveness, persuasiveness and impression management; social perception, persuasiveness and impression management have direct effect on customer perspective; persuasiveness, social expressiveness and social adaptability have a direct influence on internal business processes and social adaptability, social perception, impression management and social expressiveness are directly related with learning and growth. Contrary to expectations though, social perception and social adaptability were significantly and negatively associated with internal business processes and customer perspective, respectively, while there was no significant correlation between social expressiveness, persuasiveness and impression management with customer perspective, business processes and learning and growth in that order.Practical implicationsThe current study affirms that SMEs managed by entrepreneurs and managers who possess high levels of SC, may have a better performance compared to those operated by entrepreneurs with low levels of SC. This justifies a need for SME entrepreneurs and managers to work hard to improve their SC capabilities.Originality/valueThis study is pertinent and unique because, it extensively examines each of the five dimensions of SC in relation to nonfinancial indicators of SME performance. Besides, the study also provides additional evidence of the impact of SC on SME performance by suggesting that entrepreneurs who are socially competent are more likely to own highly successful ventures.

Effect of Strategic Leadership on Performance of SMEs During Covid-19 Pandemic in Nairobi County, Kenya

The global economy and enterprises have faced significant impacts due to the COVID-19 pandemic, necessitating leadership styles capable of navigating change and uncertainty effectively. Strategic leadership has emerged as a promising approach for establishing agile strategies amidst rapid transformations in business environments. This study aimed to assess the impact of strategic leadership on the performance of Small and Medium-sized Enterprises (SMEs) during the pandemic in Nairobi County, Kenya. Employing a descriptive and correlational research design, the study targeted 584 respondents from various SME industries in Kenya, with 237 respondents obtained using a stratified random sampling technique. Descriptive and inferential statistics, including correlation and regression analyses, were conducted using SPSS version 23. The findings revealed that SMEs in Nairobi County recognized the importance of strategic leadership for their prosperity, with a significant positive correlation between strategic leadership and performance (r (183) = 0.430, p < 0.05). Strategic leadership accounted for 18.5% of performance variance, indicating a substantial impact (F (1,181) = 41.174, p < 0.05). Moreover, the intercept between strategic leadership and performance showed a notable improvement (β = 0.230, p < 0.01), suggesting a 23% performance enhancement with effective strategic leadership implementation. In conclusion, the majority of SMEs in Nairobi County demonstrated strong strategic leadership, fostering absorptive and adaptive capacities crucial for navigating turbulent business environments. The study underscores the importance of institutionalizing strategic leadership within SMEs to enhance their ability to formulate and execute strategies effectively amidst rapid changes.