Performance Of Small And Medium-sized Enterprises Research Articles

Entrepreneurial orientation, company performance, and competitive advantage in Indonesian culinary SMEs

This study examines the impact of entrepreneurial orientation on company performance and competitive advantage in the context of small and medium-sized enterprises (SMEs). Based on 100 SMEs in the culinary sector in Indonesia and using a quantitative approach based on PLS-SEM data analysis, our study reveals that entrepreneurial orientation influences company performance through competitive advantage. This research will help SME owners and managers to deal with the required entrepreneurial orientation without taking excessive risks that could be detrimental to company performance and competitive advantage.

Evaluation of the Relationship Between Entrepreneurial Orientation and Cultural Values on Performance of Small and Medium-sized Enterprises in Southwest Nigeria

This study gave an evaluation of the relationship between entrepreneurial orientation and cultural values on performance of small and medium-sized enterprises (SMEs) in southwest Nigeria. Primary method of data collection was used. Data were collected through the use of structured questionnaire administered randomly on carefully selected sample of 400 owners, managers/supervisors of SMEs who have been in existence for a period of a minimum of five years and above through multi-stage sampling technique. Structural equation modelling (SEM) was used to examine the relationship between entrepreneurial orientation and cultural values on the performance of SMEs in southwest Nigeria. The result indicates that both entrepreneurial orientation and cultural values are strongly related with high level of relationship. This study concluded that managers need to leverage the dimensions of both entrepreneurial orientation such as innovativeness, proactiveness, and risk taking as well as the dimensions of cultural values such as individualism/collectivism, power distance, masculinity/femininity, uncertainty avoidance to achieve optimal business performance. Keywords: Entrepreneurial orientation, small and medium-sized enterprises, performance, dimensions. cultural values

Impacts of Market Orientation on Firm Performance in SMEs of Turkey: A Serial Mediation Approach

No previous studies in the literature have investigated the serial mediation impact of innovation capability and product innovation on the influence of market orientation on firm performance. The focus in this research is on the role of the combination of innovation capability and product innovation in the influence of market orientation on firm performance. To that end, it is aimed to examine the direct and indirect impacts of market orientation on firm performance (through innovation capability and product innovation, respectively). The data collected from 739 small and medium-sized enterprises (SMEs) in Turkey by employing the online survey method were tested using the SmartPLS 3 analysis programme. Pieces of empirical evidence have revealed that both market orientation and innovation capability act as important antecedents of product innovation. Moreover, mediation analysis demonstrates that innovation capability and product innovation in turn mediate the connection between market orientation and firm performance. Consequently, this research provides pieces of evidence showing that SMEs can increase their firm performance with innovations they can make in their products by improving their innovation capability with a market-oriented approach so that they can open up to foreign markets in theory and practice.

The long-term effects of loan guarantees on SME performance

We estimate the treatment effect of guaranteed loans on the growth of a large sample of French small and medium-sized enterprises (SMEs). The nature of our sample allows us to estimate the treatment effect up to 10 years after the treatment and to consider several performance measures and moderating factors. Our findings indicate that beneficiaries of guaranteed loans experience significantly higher growth in sales, employment, and total assets than otherwise similar companies. The effects are long lasting, do not entail a slowdown in productivity growth, are mostly driven by organic growth rather than by external acquisitions, and are larger in firms that are typically more financially constrained (young or small). Guaranteed-loan beneficiaries are also more likely to survive than non-beneficiaries. Our results are consistent across different identification strategies (matching, difference-in-differences, instrumental variable estimation) and control group choices.

The sequential effect of absorptive capacity, strategic agility, and sustainable competitive advantage on sustainable business performance of SMEs.

A company's environmental sensitivity primarily depends on its sustainability. Hence, investigating the factors that affect sustainable business performance contributes to the literature on the environment. Based on a resource-based view, dynamic capabilities, and contingency theory, this study examines the sequential relationships between the absorptive capacity, strategic agility, sustainable competitive advantage, and sustainable business performance of small- and medium-sized enterprises (SMEs), as well as the mediating role of sustainable competitive advantage in the relationship between strategic agility and sustainable business performance. The data for the study was collected from 421 SMEs operating as family businesses and analyzed using SEM. Research findings show that the sub-dimensions of absorptive capacity, acquisition, and exploitation affect strategic agility; strategic agility affects sustainable competitive advantage, and sustainable competitive advantage affects sustainable business performance. In addition to these sequential relationships, sustainable competitive advantage was found to play a full mediating role in the relationship between strategic agility and sustainable business performance. The findings of the study highlight the process to achieve sustainable performance for SMEs, which are the backbone of developing economies in today's highly turbulent economic conditions.

Effect of Competent Human Capital, Strategic Flexibility and Turbulent Environment on Sustainable Performance of SMEs in Manufacturing Industries in Palestine

The contribution of Small and Medium-Sized Enterprises (SMEs) to economic prosperity and expansion is widely acknowledged worldwide. However, the empirical evidence in the literature on enhancing sustainable performance in manufacturing industries, specifically SMEs in developing countries living under constant unstable economic and political environments such as Palestine, is still insufficient. Referring to the theory of Triple Bottom Line (TBL), Contingency Theory (CT), Natural Resource Based View (NRBV) and the relevant literature on sustainable performance in business firms, this study aims to explore the effect of competent human capital (CHC), strategic flexibility (SF) and turbulent environment (TE) on the sustainable performance (SP) of SMEs industries in the context of Palestine. Based on 380 random samples in manufacturing SME industries in the country, 245 useful questionnaires were analyzed using Partial Least Squares Structural Equation Modeling for analysis by the Smart PLS 4.0 software. The findings indicate that several enablers could improve the performance of SMEs in Palestinian industries in terms of sustainability. One of these aspects is adopting a supportive governmental policy to strengthen the sustainability concept in the industrial sector and encouraging industries to move toward circularity and greening their operations. Nevertheless, SMEs need to implement proper managerial tools at the firm’s level that enhance sustainable performance, including investment in competent human capital, developing flexible strategies and proper analysis of the surrounding turbulent environment, since all of these will positively impact and improve the sustainable performance of those SMEs. The contribution of this study to the literature develops current knowledge of sustainable performance in SMEs in manufacturing industries, specifically in countries that suffer from political and economic turbulence, by providing a conceptual framework focusing on managerial and business aspects that contributes to achieving desired sustainable performance. Consequently, the study’s findings also show how CHC, SF and TE are essential managerial tools for organizations and SMEs operating in an extremely competitive and turbulent market.

TMT functional background heterogeneity and SMEs’ performance: The role of dynamic capabilities and business environment

Drawing on the insights from the upper echelons theory (UET), we advance the understanding of how top management team (TMT) functional background heterogeneity (TMTFBH) influences the performance of technology-based small- and medium-sized enterprises (SMEs). An analysis based on a sample of listed Chinese SMEs shows that TMTFBH has a positive effect on firm performance, and the two dimensions of dynamic capabilities—integrating and innovating capabilities—mediate this relationship. Furthermore, the business environment positively moderates the relationship between dynamic capabilities and firm performance. This study provides a more nuanced understanding of the mechanisms and conditions underlying the effects of TMTFBH on the performance of technology-based SMEs, highlighting the role of dynamic capabilities and the business environment.

FORMAL FINANCING OPTIONS AND SMALL AND MEDIUM SCALE ENTERPRISES PERFORMANCE. THE CASE OF OTA, OGUN STATE NIGERIA

Many efforts have been made in recent years to increase small and medium-sized performance in the Nigerian economy. Despite the efforts and investments, SME’s are still on the chase towards improved growth level. It is important to address this because Micro, Small and Medium Enterprises (MSME’s) employ approximately 84.02% of the total workforce, constitute 96% of businesses in Nigeria and contribute 48% to the Gross Domestic Product (GDP) of the nation. Financial resources are scarce for small SME’s. As a result, many governments, and donors prioritize interventions that increase small and medium-sized enterprise (SME) access to capital. The study has explored the effect of formal financing options on small and medium-sized businesses in the Ado-Odo Ota, Local Government Area (LGA) of Ogun-State Nigeria. The study has utilized survey methodology via questionnaire and analyzed using the Statistical Package for Social Sciences (SPSS). The Analysis of Variance (ANOVA) and regression results were applied to test the study’s hypothesis. The study discovers that formal financing options have significant impact on SME performance in Ado-Odo, Ota, Nigeria at 5% significance level. The finding further showed that a one percent increase in formal financing options would lead to a 1.36 percent increase in SME performance. The study recommends that formal financial resources are considered significant factors influencing the growth and development of SME’s in Ado-Odo, Ota, and Nigeria by implication. The study recommends that formal financing institutions which include commercial banks, business angels, venture capital, microfinance banks should be considered as significant sources of finance for SME’s. On the other hand, formal financing institutions should assist SME’s through friendly interest rates and flexible packages to ensure that SME’s find them as attractive options for forcing sourcing for purposes, which include purchase of equipment and others that can enhance SMEs’ growth and development.

EXPLORING FIRM INNOVATION CAPABILITY AS THE ‘BLACK BOX’ BETWEEN HUMAN CAPITAL AND PERFORMANCE IN RUSSIAN SMES

This study examines the mediating role of firm innovation capabilities as a strategic choice for Russian small and medium-sized enterprises (SMEs), which translates their managerial and worker human capital stocks into enhanced firm performance. The results of a survey conducted on 366 CEOs and business founders indicate innovation capabilities are the intermediate variable between firm human capital and SME performance. Further parallel mediation regression analysis demonstrates that human capital is positively and significantly related to all innovation capability dimensions (client-, marketing- and technology-focused); however, the mediation effect is significant only in the case of client-focused innovation capability–SMEs’ ability to provide clients with services that offer unique benefits, solve clients’ problems in innovative ways and seek out novel ways to tackle problems. These findings suggest that SMEs operating in turbulent transition economy environments can be more innovative and achieve the best performance using intangible, highly valuable and rare talent resources.

Innovation and SMEs performance: evidence from Vietnam

Purpose The purpose of this paper is to examine the effect of innovation on the performance of small and medium-sized enterprises (SMEs) in Vietnam. Design/methodology/approach The paper uses data from the surveys on SMEs in Vietnam conducted by the Development Economics Research Group at the University of Copenhagen, the United Nations University’s World Institute for Development Economics Research, Central Institute for Economic Management and Institute of Labor Science and Social Affairs, and applies least squared regressions and 2SLS regressions to examine the effect of innovation on the performance of SMEs. Findings The authors find that SMEs with innovation tend to perform better than SMEs without innovation. The authors further show that the positive effect of innovation on firm performance mainly comes from the effect of improvement of existing products, an important type of innovation in SMEs. This result is persistent when the authors use propensity matching score and 2SLS regression with instrumental variable approaches. Overall, the results show the important role of innovation in enhancing the firm performance of SMEs, which sheds light on the literature on the controversial relation between innovation and SMEs performance in the world. Research limitations/implications The major limitation of the paper is the lack of data. Although the database used in the paper is widely used to analyze SMEs in Vietnam, it covers about 2,500 firms in only nine provinces/cities in Vietnam. Practical implications Policymakers should enact relevant policies to support SMEs with innovation activities, thereby increasing firm performance and their competitiveness. For instance, encouragement policies or financial incentives (tax reduction or subsidies) for innovative firms should be implemented and/or fostered. Originality/value To the best of the authors’ knowledge, this is the first paper to examine the effect of different types of innovation on the performance of SMEs in Vietnam.

Enhancing innovation performance of SMEs through open innovation and absorptive capacity: the moderating effect of business model

ABSTRACT Open innovation (OI) is an effective way for small and medium-sized enterprises (SMEs) to acquire external resources and enhance innovation performance. This study focuses on the effect of OI on innovation performance of SMEs. Specifically, this study classifies OI into inbound and outbound OI, and explores their respective impacts on SMEs’ innovation performance. Besides, this study investigates the mediating role of absorptive capacity and the moderating role of business model on the above relationships. Based on the survey data from 218 Chinese manufacturing SMEs, our empirical results show that: (1) both inbound and outbound OI have positive impacts on SMEs’ innovation performance; (2) absorptive capacity partially mediates relationships between inbound and outbound OI and innovation performance of SMEs; (3) efficiency-centered business model positively moderates the inbound and outbound OI-SMEs’ innovation performance relationships, and novelty-centered business model only exhibits a moderating effect on outbound OI-innovation performance relationship. This study provides deeper insights into the relationship between OI and SMEs’ innovation performance. Besides, this study reveals the mediating mechanism of OI on SMEs’ innovation performance, and enhances our understanding of why some SMEs more successfully utilise OI activities to improve innovation performance than others.

Enhancing SMEs Performance through Supply Chain Collaboration and moderation of Supply Chain Technology Implementation

Goal: The minimal inter-firm resource sharing has raised problems for small and medium-sized enterprises (SMEs). There has been little focus on a thorough understanding of supply chain collaboration in the context of SMEs in Pakistan. This research looks into the antecedent impact of governance mechanisms and collaborative culture on supply chain collaboration (SCC), as well as the direct influence of supply chain collaboration on SMEs' performance in developing countries. Design/Methodology/Approach: The data was collected using a closed-ended questionnaire from randomly selected respondents from Pakistani SMEs. SMART PLS 3.0 software is utilized for statistical analysis. Results: The findings showed a significant positive link between SCC and the performance of small businesses. Moderation was investigated between the variables. This means that supply chain technology Implementation (as moderator) is a process that provides SMEs to improve collaboration between partners through information and advanced manufacturing technology and provide suitable solutions to achieve performance. Limitations of the investigation: It is a cross sectional study and front line managers are eliminated from the study, however they are also the key respondents of supply chain (SC) implementation. Implications: The implications of this research for SC managers and researchers involved in supply chain collaboration adoption in SMEs are important. Originality/ Value: Findings supported the concept that if the organization has a supportive culture towards supply chain collaboration adoption then SMEs will improve their performance.

A systematic literature review: digital marketing and its impact on SMEs

PurposeThis study aims to analyze the available literature on the use of digital marketing and its impact on small- and medium-sized enterprises (SMEs). This study identifies the use of digital marketing practices and its impact on SMEs.Design/methodology/approachA systematic literature review has been conducted on digital marketing, and its implementation in SMEs. The impact of digital marketing on SMEs performance is observed over the past 12 years through the resources which are undertaken for the study, namely, Science Direct, Scopus, Springer, IEEE Explorer, ACM Digital Library, Engineering Village, ISI Web of Knowledge database is used to search the research publications on the selected topic.FindingsAlthough some SME firms use digital marketing, their impact is not similar where we can recommend a fixed strategy for applying digital marketing. This review provides an insight into how digital marketing has evolved over the period of time and how SMEs are adopting it for their sustenance.Practical implicationsThis study will give theoretical analysis of various benefits received by SMEs because of digital marketing in the different capacities helping organizations to uplift their productivity. Mind mapping will give the idea of impact of SMEs on their various performances in rural as well as in the urban areas. This study will give further scope for digital marketers to approach those industries specifically at rural parts of the nation for bringing change into their marketing operations and also for increasing turnover by the use of digital marketing.Originality/valueResearch on the use of digital marketing by SMEs firms is still at the embryonic stage in India. This study is a pioneering effort to review the use of digital marketing in SMEs and identify research priorities for scholars and practitioners.

The flexible HRM and firm performance nexus: can empowering leadership play any contingent role?

PurposeThe purpose of this empirical research was to investigate the individual effects of three dimensions of flexible human resource management (HRM) practices – skill flexibility, behavioral flexibility and human practice flexibility on firm performance and to what extent these relationships are strengthened/weakened when there was the moderation of empowering leadership in small- and medium-sized enterprises (SMEs) of the Kingdom of Bahrain.Design/methodology/approachThe data were collected from chief executive officers (CEOs) through a questionnaire survey method to test the hypothesized relationships. A final dataset of 315 valid responses was utilized for data analysis, and results were analyzed using the Smart partial least squares structural equation modeling (PLS-SEM) technique.FindingsThe findings revealed positive effects of skill flexibility, behavioral flexibility and human practice flexibility on firm performance. The moderating role of empowering leadership further strengthened the effects of employee skill flexibility and employee behavioral flexibility had on firm performance. However, empowering leadership did not pose any moderating effect on human practice flexibility and firm performance relationship.Research limitations/implicationsThis paper offers implications for theories on HRM and leadership. It also provides valuable insights for organizations and leaders seeking to boost firm performance across SMEs.Practical implicationsThis paper offers implications for theories on HRM and leadership and also contributes in the understanding of the modern managers.Originality/valueThis paper investigated the effects of flexible HRM practices on firm performance and the role of empowering leadership across SMEs in Bahrain. It also explored how the performance of SMEs can be improved using flexible HRM practices followed by the presence of empowering leadership.

Differentiation Strategy and Export Performance in Emerging Countries: Mediating Effects of Positional Advantage among Mozambican Firms

Small and medium-sized enterprises (SMEs) play an important role in economic and development growth, particularly in developing countries. Their success depends on the expansion of their markets across borders, based on the strategies adopted, in which differentiation strategies and positional advantages play an important role. As an emerging country, Mozambican SMEs face a lack of resources and business environmental challenges in deploying their unique advantages when competing abroad. As such, the objective of this paper is to study the impact of differentiation strategies on the export performance of Mozambican SMEs, and the mediating effect of positional advantage on the relationship between the differentiation strategy and export performance of SMEs. To achieve this objective, an empirical study was conducted, based on a sample of 250 Mozambican firms, to test a theoretical model that applied Structural Equation Modeling using the Partial Least Squares (PLS-SEM) algorithm, based on SmartPLS software version 3.3.6 (SmartPLS GmbH, Oststeinbek, Germany). The results show that differentiation strategies positively impact the export performance of SMEs and that positional advantage mildly mediates the relationship between the differentiation strategy and export performance. This suggests that Mozambican SMEs may not be properly taking advantage of the positional advantage of the differentiation strategies, as the added value generated by the positional advantage is relatively modest. As such, Mozambican SMEs still need to support their positional advantages to overcome fierce international competition. This study contributes to the knowledge about the consequences of adopting differentiation strategies and positional advantages on the export performance of SMEs, particularly in the context of emerging countries.

Factors Influencing Green Innovation Adoption and Its Impact on the Sustainability Performance of Small- and Medium-Sized Enterprises in Saudi Arabia

Due to the growing worries of communities and governments about the depletion of natural resources and environmental contamination, green innovation (GI) is currently receiving much attention on a global scale. This study intends to investigate how Green Innovation Adoption (GIA) influences Sustainable Performance (SNP) in Saudi Arabia’s small- and medium-sized enterprises (SMEs) based on primary research. A conceptual framework model is developed to better comprehend the relationships of Government Support (GS), External Partnership and Cooperation (EPC), Rules and Regulatory Factors (RR), Market and Customer Factors (MC), Organization and Human Factors (OH), Green Innovation Strategy (GIS), and Technology Factors (TF) with GIA. The evaluation of hypotheses is performed using the Partial Least-Squares Structural Equation Modeling (PLS-SEM) method. The study’s findings are obtained using the SPSS 24.0 and AMOS 24.0 software programs. The results of this study reveal that GS, EPC, RR, MC, OH, and TF all have a positive impact on GIA. Furthermore, it has been noted that GIA has a positive impact on the economic, social, and environmental performance of SMEs in the Kingdom of Saudi Arabia. In accordance with the findings, corporate units that use GI would produce more acceptable eco-friendly and long-term performance.

The implication of CSR on the performance of SMEs in the context of a developing economy

While corporate social responsibility (CSR) has been extensively explored from the standpoint of large corporations and developed economies, smaller businesses and developing economies have received little attention. Small and medium-sized enterprises (SMEs) continue to be the backbone of most economies, significantly accounting for a major share in economic value creation. This implies that the contribution of SMEs in achieving sustainable development is therefore critical. The study seeks to add to the limited literature by investigating the implication of socially responsible behavior on the performance of SMEs in Nigeria. Corporate reputation, profit maximization and management efficiency are dependent variables used as proxies for performance measurement. A well-structured questionnaire was administered to 63 Nigerian SMEs. The study adopted a structural equation model using SmartPLS for the data analysis. Findings show a significant relationship between corporate social responsibility and the three determinants of firm performance (management efficiency, profit maximization and corporate reputation). This study has implications for owners/managers of SMEs who are keen on improving performance by leveraging on socially responsible behaviour through the development, implementation and communication of a sustainable and acceptable CSR initiative. Recommendations and suggestions for further investigations are made.

Effect of business intelligence on operational performance: the mediating role of supply chain ambidexterity

PurposeThis study aims to examined the impact of business intelligence (BI) and supply chain ambidexterity (SCA) on operational performance (OP), contributing to dwarf knowledge in small- and medium-sized enterprises (SMEs) in the context of emerging economies. The mediating role of SCA was considered in the proposed model.Design/methodology/approachThe study used the quantitative method to investigate the interdependencies between variables. As a result, 216 senior and middle managers/owners of SMEs in Ghana were surveyed using a purposive and convenient sampling method. SPSS version 23 and Smart PLS version 3 were used to conduct the research.FindingsWhile the direct link among BI, SCA and OP was confirmed. The outcome also showed that SCA plays a significant mediating role between BI and OP among SMEs.Practical implicationsThe outcome of the study indicates that SCA encourages the use of BI to generate superior OP among SMEs. This knowledge will improve the performance of SMEs and their ability to withstand the competition in the global market.Originality/valueWith the discovery of this study, the theory of a resource-based view now has some empirical evidence behind it. As a result, SMEs prioritize aspects that could improve their operations and implement tactics that would nurture better performance and competitive advantages.

Developing SME performance management practices: interventions for improving productivity

PurposeThe paper is a proof of concept (PoC) intervention study aimed for developing performance management (PM) practices in manufacturing small and medium-sized enterprises (SMEs) with the longer-term aim enabling the SMEs to improve their productivity. The intervention was designed and deployed by a collaborative quartet of academics, management consultants, accountancy firm and a commercial bank manager.Design/methodology/approachThe paper firstly musters a set of initialising PM practices aligned to productivity improvement. These are utilised to design a knowledge transfer intervention for deployment with a set of manufacturing SMEs incorporating some associated productivity tools. The evaluation of the intervention utilised a case study approach founded on a logic model of the intervention to assess the development of the PM practices.FindingsThe intervention contributed to a partial development of the mustered practices and the productivity diagnostic based on the multi-factor productivity (MFP) abstraction and a data extraction protocol had the strongest impact. The study revealed the importance of the three interlaced factors: Depth of engagement, feedback opportunities and the intervention gradient (the increase of independent action from the participating SME's and the diminishment of the external intervention effort).Research limitations/implicationsThe case study is based on a limited number of individual SME's, and within just the manufacturing sector.Practical implicationsSME businesses will require a more sustained programme of interventions than this pilot to develop PM capability, and depth of engagement within the SME is critical. Professional stakeholders can be utilised in recruitment of firms for intervention programmes. Business can start developing PM capability prior to PMS implementation using the tools from this programme.Originality/valueThe productivity diagnostic tool, based on a synthesis of MFP and the performance pyramid, an array of potential initialising practices for PM capability and discovery of potential mechanisms for PM practice development.

Towards achieving the sustainable development goal 9: Analyzing the role of green innovation culture on market performance of Chinese SMEs.

Green innovation culture is essential to the Chinese 14th five-year plan aligned with sustainable development goal 9. This study examines the relationship between green innovation culture and market performance of Chinese small and medium-sized enterprises (SMEs). We evaluated hypothesis by taking a sample of 564 SMEs employees in China through an online survey. The structural equation modelling (SEM) method is used to analyze data. The findings showed that green innovation culture positively influence product and marketing innovation. Similarly, marketing innovation positively affects product innovation and market performance. In addition, product innovation has a substantial effect on market performance. The outcomes of this study imply that SMEs in emerging economies should concentrate on green innovation culture to improve their market performance. In addition, the identification of study limitations and suggestions for further research are also addressed for all stakeholders involved with SMEs.