Small Medium Enterprises Research Articles

Improving Innovative Work Behavior in Small and Medium Enterprises: Integrating Transformational Leadership, Knowledge Sharing, and Psychological Empowerment

Small and medium enterprises (SMEs) significantly contribute to society’s growth and welfare. Nevertheless, SMEs often experience challenges, i.e., high levels of competition and market demands. To maintain SMEs’ existence, a competitive advantage is demanded by increasing innovative work behavior. This study explores and evaluates the relationship between transformational leadership and innovative work behavior and examines the mediating role of knowledge sharing and psychological empowerment on the relationship between transformational leadership and innovative work behavior. This study uses a quantitative approach, where data were gathered from a questionnaire distributed to 190 employees of export SMEs and were further examined using Smart PLS 3.2.9. The findings demonstrate that transformational leadership does not influence innovative work behavior but significantly and positively influences psychological empowerment and knowledge sharing. Psychological empowerment and knowledge sharing significantly and positively influence innovative work behavior. Subsequently, psychological empowerment and knowledge sharing partially mediate the linkage between transformational leadership and innovative work behavior.

Manajemen Risiko Bisnis BMT di Tengah Pandemi COVID-19

The economic contraction in the MSME (Micro Small and Medium Enterprises) sector during the Covid pandemic directly impacted financial business performance. On a micro scale, BMT (Baitul Maal wat Tamwil) as a sharia microfinance institution is affected by the weakening of economic activity in the MSME sector. This is understandable because in its activities, BMT makes MSMEs its business partners. From a business aspect, the impact experienced by BMT is the emergence of various risks; increasing problematic financing, liquidity and operational risks. The results of this qualitative research show that; Firstly, business risks that arise at BMT NU Jawa timur Balung Branch and BMT UGT Nusantara Rambipuji Jember include financing risk, operational risk and liquidity risk. Financing risk is characterized by a high number of problematic financing. Meanwhile, operational risks are characterized by restrictions on access to the office, physical distancing, and increased operational costs. Meanwhile, liquidity risk is characterized by an abundance of funds in cash. Second, risk management at BMT NU Jatim Balung Branch and BMT UGT Nusantara Rambipuji Jember is carried out sequentially starting from risk identification, measurement, analysis and control activities. Based on this process, tactical steps are then developed to handle each aspect of risk. Financing risks include financing moratorium steps, intensive collection, restructuring and creating reserves for losses. Operational risks are approached by the issuance of new rules regarding office operating systems and rules related to the implementation of Health procedures.

Analisis Dampak Inflasi Terhadap Daya Beli Konsumen dalam Konteks Ekonomi

This study analyzes the impact of inflation on consumer purchasing power in Indonesia, focusing on low-income communities and micro, small, and medium enterprises (MSMEs). Using a descriptive qualitative method, data were collected through in-depth interviews and field observations. The results show that inflation has a significant effect on daily consumption patterns and the quality of life, particularly in meeting basic needs. Moreover, the increase in essential goods prices has triggered social instability in several regions. This study also evaluates government policies in mitigating the impact of inflation and provides recommendations to protect the most vulnerable groups from rising prices. The findings suggest that although fiscal and monetary policies have short-term positive effects, more comprehensive measures are needed for the long term.

Analisis Pengembangan Strategi Bersaing Limasan Cafe Karawang

Limasan Karawang Coffee Shop, as one of the micro, small and medium enterprise (MSME) units in Karawang, has become a popular destination for young people and teenagers to enjoy the cafe atmosphere and the various coffee products on offer. This research aims to identify and analyze the competitive strategies that have been implemented by the Limasan Karawang Coffee Shop. This research uses qualitative descriptive analysis. Business Model Canvas (BMC) analysis is used to do this. Primary and secondary data were used in this research. Primary data was obtained from observations and in-depth interviews related to creating competitive strategies for the Limasan Karawang Coffee Shop which was the subject of the research. The results of research conducted by researchers in a study entitled "Analysis of the Competitive Strategy Development of Limasan Cafe" using the Business Model Canvas Approach confirm that the Business Model Canvas is an effective method as a foundation for generating strategic alternatives and establishing new strategies for the company. To help define, analyze, Designing a business model, the Business Model Canvas (BMC), consists of nine elements that represent all aspects of the business. This concept can serve as an effective tool for describing business models and developing new strategies

CVC Involvement, Digital Transformation, and Risk-Taking of Investee Companies: Evidence from China

ABSTRACT This paper investigates the impact of corporate venture capital (CVC) involvement on digital transformation and the risk-taking behavior of investee companies. Based on data on manufacturing companies listed on the Small and Medium-sized Enterprise (SME) board and the Growth Enterprise Market (GEM) of the Shenzhen Stock Exchange from 2015 to 2022, we find that CVC involvement helps boost the risk-taking level of investee companies. This is because CVC promotes corporate digital transformation, which in turn enhances corporate risk-taking. Finally, we show that the promoting effect of CVC on corporate risk-taking is more pronounced for investee companies with a small size and investee companies with a high degree of operating leverage. Our findings provide novel evidence for the effect of CVC on corporate risk-taking in the digital age.

ОСОБЛИВОСТІ ФОРМУВАННЯ СІМЕЙНОГО БЮДЖЕТУ В УМОВАХ ФІНАНСОВО-ЕКОНОМІЧНОЇ НЕСТАБІЛЬНОСТІ

Introduction. In the conditions of financial and economic instability, approaches to the formation and distribution of financial resources of the state, business and households have changed radically. Therefore, the study of the structure and features of forming the family budget is an objective requirement of the time. The purpose of the article.. Study of the essence, analysis of the structure and problems of formation of family budgets of citizens in Ukraine. Results. The authors of the article suggest that the family budget should be considered as a plan for the formation and use of cash income to ensure the well-being and appropriate standard of family living over a certain period of time. The analysis of the income structure of family budgets shows that the largest share is wages 57%, social benefits and transfers – 21%, profit and mixed income – 15%, income from property – 7%. During the studied period, the average monthly pension increased by 86.2%, the stipend by 53%, the minimum pension by 33.4%, the subsistence minimum by 38.33%, but in dollar equivalent it is 23%, 1.8%, -11.8% respectively. Important factors affecting the incomes of Ukrainian citizens are: the level of development of the country’s economy; the size of state social guarantees, the level of labor productivity; unemployment rate; the level of purchasing power of citizens; inflation; the structure of citizens’ expenses. It has been studied that in the conditions of war, the number of Ukrainians living on the edge of poverty has increased by 1.8 million since 2020, one of the indicators indicating a decrease in the level of income is an increase in the share of expenditure on food products in the general budget. According to the structure of family budgets, Ukrainians spend almost 66% on food and mandatory payments, which is twice the world average. During the war, the situation has changed, charity and donations occupy a larger part of family budget expenses compared to education or loan payments. Conclusions. It is suggested that in order to ensure the stability of the financial condition of Ukrainian citizens, it is necessary to develop and implement effective measures for socio-economic support of the population’s standard of living and the creation conditions for the development of small and medium-sized businesses at the state and regional levels.

An empirical evidence on the impact of social customer relationship management on the small and medium enterprises performance

Social media has swiftly established itself as a primary source of products’ information for customers. Nowadays, Small and Medium-size Enterprises (SMEs) can use social media to develop Customer Relationship Management platforms (social CRM). Firms, particularly SMEs in developing countries need to understand the factors affecting their performance by implementing social CRM. However, there is a dearth of awareness on the impact of social CRM on the performance of SMEs. This study proposes an integrated model that aims to investigate the effects of social CRM on SMEs’ performance. The model is constructed by incorporating three dominant theoretical frameworks: the Fit-Viability Model (FVM), Network Externalities, and the Resource-Based View (RBV). A cross-sectional survey was used to gather data from 149 SMEs managerial staff. Findings revealed that almost 50% of the variability in the performance of SMEs is explained by the fitness and viability of social CRM. In addition, network externalities of social media significantly impact the social CRM fitness in the context of SMEs with path coefficient 0.617. Furthermore, the internal financial resources factor makes sCRM viable for SMEs as the results show significant relationship between the internal financial resources and the sCRM viability with 0.536 path coefficient. Manager innovativeness, IT knowledge, top management support, and government assistance, on the other hand, do not contribute significantly to the viability of social CRM for SMEs. The model aids SMEs in making well-informed decisions regarding the adoption of social CRM by evaluating both the suitability of social media for CRM tasks and the enterprise preparedness to implement social CRM, leading to enhanced performance.

Entrepreneurial finance and sustainability: Do institutional investors impact the ESG performance of SMEs?

Institutional investors improve the environmental, social, and governance (ESG) performance of small- and medium-sized enterprises (SMEs). Our difference-in-differences framework shows that the backing from private equity and venture capital funds leads to an increase in SMEs’ externally validated ESG scores compared to their matched non-investor-backed peers. Consistent with “ESG-as-insurance” theory, the ESG performance of SMEs with a higher probability of failure is more likely to benefit from the backing of institutional investors. This positive effect is heterogeneous; while SMEs with high ex-ante ESG performance further improve their ESG performance following institutional investor backing, SMEs with low ex-ante ESG performance are unlikely to implement any improvements. Entrepreneurial finance seems to help sustainable entrepreneurs transform into “sustainability champions,” while neglecting the betterment of non-sustainable SMEs.

Palestinian Small and Medium Enterprises Digital Technology Adoption Intention

This study aims to examine the factors determining Palestinian Small and Medium Enterprises (SMEs) Digital Technology (DT) adoption intention. A modified Technology Organisation Environment (TOE) framework integrated with the Technology Acceptance Model (TAM) theory is employed. Data was collected via a questionnaire as a sample for the quantitative approach, and experts’ semi-structured interviews as a sample for the qualitative approach is conducted. The findings presented in this study reveal that SMEs factors such as Business Model, and Enabling Regulatory Environment, are the major factors affecting DT intention adoption by SMEs in Palestine. The study findings determine the enablers and obstacles to SMEs' DT adoption intention. This study contributes significantly to the theoretical understanding of DT adoption via developing a DT framework for the SMEs in Palestine. This study's major contribution to the existing knowledge and literature in DT adoption is via developing a TOE framework for providers (supply-side) factors in general and in Palestine to fill the gaps in past studies and surge the concept and dimensions of technology acceptance from being mobile banking adoption to all DT adoption applications implemented by SMEs. The findings could be useful to policymakers, government agencies, Palestine, and other development partners to design and direct their policy interventions.This study emphasized the importance of digital technologies adoption by SMEs that will improve processes, drives innovation and enhance customer involvements.

Driving SME performance through technological absorptive capacity and e-business innovation

This study examined the relationship between technological absorptive capacity and the business performance of small and medium-sized enterprises (SMEs), as well as the mediating effect of e-business innovation. Based on data obtained from 179 sunflower oil-processing SMEs in Tanzania and analyzed using partial least squares structural equation modeling, the study established that technological absorptive capacity influences business performance. Further, e-business innovation partially mediates the relationship between technological absorptive capacity and business performance. These findings suggest that technological absorptive capacity indirectly influences SME performance through e-business innovation. On the other hand, findings from the multigroup analysis revealed insignificant differences in the hypothesized relationships between samples from Dodoma and Singida regions, with greater effects observed in Dodoma than in Singida for most of the relationships. The mediating effect of e-business innovation is more profound in the Dodoma sample than in the Singida sample. This study provides important empirical evidence of the role of technological absorptive capacity and e-business innovation in enhancing SME performance. Additionally, evidence from cross-regional comparisons is crucial for examining differences in business performance among SMEs operating in the country. This study has some implications for business managers, governments, policymakers, and academics.

EMERGING TRENDS OF FUNDING SOURCES SMES WITH BIBLIOMETRIC ANALYSIS

The difficulty for SMEs is access to capital, which has been persistently tough; nonetheless, a solution is attainable. The paper presents an extensive bibliometric analysis of research trends and thematic development in funding sources for micro, small, and medium enterprises (SMEs), specifically concentrating on the timeframe from 2013 to 2024. It underscores the growing interest in innovative financing mechanisms such as equity crowdfunding, fintech, and digital finance, which are becoming essential for MSME funding. Traditional funding sources like bank loans and venture capital continue to be pertinent. However, there needs to be a discernible transition towards technology-enabled financing. The research highlights SMEs' difficulties in obtaining financing due to rigorous banking criteria, particularly in Indonesia. It proposes new study avenues centered on emergent subjects such as crowdfunding and the interaction between fintech and regulation. The results underscore the necessity for enhanced finance access and support systems to support SME growth and competitiveness.

The Effect of Lean Manufacturing on Production / Operation for the Small and Medium Enterprise in Malaysia

At the start of 2022, the government announced its focus on supporting the development of small and medium enterprises (SMEs) to improve living standards following the COVID-19 pandemic. SMEs contribute significantly to the national economy, with the clothing industry playing a major role. This research applies lean manufacturing techniques to enhance the performance of SMEs in the clothing sector, specifically in T-shirt printing. Therefore the first objective was to collect, analyze processing times and recording of all issues encountered during production. The second objective involved using value stream mapping (VSM) to analyze the T-shirt printing process from raw material supply to finished product packaging. We also employed a why-why analysis to pinpoint the underlying causes of inefficiencies and devise specific solutions. The last objective focused on process improvement using VSM, along with the Kanban system, 5S and Make to Stock (MTS) to optimize block preparation and T-shirt printing. We selected Flexsilk Printshop as the case study. The findings showed a 66.59 % reduction in waiting time, a 30.77 % improvement in lead time, an increase in overall equipment effectiveness (OEE) from 93.3 to 97.45 % and a 50.41 % increase in efficiency.

Untangling Circularity: Transitioning to a Regional Circular Economy in the Clothing and Textile Sector in England

The transition to a Circular Economy (CE) presents a paradigm shift, emphasizing sustainability, resource efficiency, and waste reduction. The existing literature extensively covers the principles and benefits of CE, but there is a notable gap in understanding how these practices are implemented at a local level. Specifically, there is a lack of detailed insights into the localized challenges, adaptation processes, and contextual factors influencing the adoption of circular practices. Additionally, the implications for different types of stakeholders and the effectiveness of localized strategies remain underexplored. By employing causal loop diagrams to depict system dynamics, interactions, and connections inherent in the transition to a CE, this research delves into the significance of understanding the complexities of circularity within a specific localized context. We draw qualitative data from semi-structured interviews and workshops with participants from key stakeholders within the textile and clothing sector in the Southwest of England. We find that legislation has a different impact on multinational corporations (MNCs) and small and medium-sized enterprises (SMEs) in their CE engagement. We also find that, while the flow of materials from MNCs to SMEs fosters regional innovation and knowledge-sharing, it does not always facilitate inter-organizational learning. Finally, both MNCs and SMEs recognize the CE’s potential for job creation, which highlights the need for more effective knowledge exchange strategies between businesses of different sizes. The study concludes that balancing CE principles with profit-driven pressures remains a significant challenge for both those founded on circular principles and those who are gradually incorporating CE principles into their organisation.

Can Reverse Mixed-Ownership Reform Promote Green Transformation of Private Enterprises?

The private sector greatly influences China's economy, which is crucial for fostering consistent economic growth. This paper takes A-share listed private enterprises (PEs) from 2009 to 2022 as the research object, uses the time-series regime-switching detection method to detect the changepoints of reverse mixed-ownership reform (RMOR) of PEs, and utilizes the staggered difference-in-difference (DID) model to investigate the impact effect and mechanism of the RMOR policy on the green transformation (GT) of PEs. The results show that the RMOR significantly promotes the GT of PEs. Additional mechanism tests reveal that the RMOR will lower the level of internal governance and impede the GT of PEs. However, it will help alleviate the financing constraints of PEs and promote their GT. The results of the moderation analysis reveal that RMOR has a greater impact on the GT of small and medium-sized enterprises (SMEs) compared to large-scale enterprises. At the industry level, RMOR exerts a more significant influence on capital-and technology-intensive industries than on labor-intensive ones. Additionally, RMOR impacts the GT of PEs in regions with lower government regulatory intensity more than in regions with higher regulatory intensity. The study's findings provide new empirical insights, decision-making tools, and innovative perspectives for the GT of PEs.

Looking back to look forward: Disruption, innovation and future trends in international human resource management

Recent global challenges, particularly the COVID-19 pandemic, have underscored the critical role of human resources in international business, pushing disruptions and innovations to the forefront of international human resource management (IHRM) research and practice. This special issue editorial provides a timely and in-depth examination of the evolving IHRM landscape, reflecting on the profound changes brought by the pandemic and investigating the transformative potential of AI-driven innovations in shaping an uncertain future. Through our exploration, we challenge several dangerous assumptions that global leaders must navigate and propose a forward-looking research agenda for the IHRM field. Our analysis highlights five key themes: (1) demographic shifts and diversity, (2) evolving patterns in globalization and global mobility, (3) the complexities of managing global workforces, (4) emerging dynamics in international careers, and (5) the role of multinational enterprises (MNEs) and international small- and medium-sized enterprises (SMEs). Together, these themes offer a comprehensive framework for advancing IHRM research and practice in an increasingly complex and dynamic global environment.

Analysis of The Impact of Factors Affecting the Recovery of Small and Medium Enterprises in Vietnam with the Goal of Sustainable Development in the Context of Economic Crisis

Objective: The article analyzes the impact of various factors on the profitability of small and medium-sized enterprises (SMEs) in Vietnam amidst an economic crisis, using a dataset of Vietnamese SMEs from 2016 to 2018 across different provinces nationwide. Method: Employing panel data regression techniques in two forms: Fixed Effects (FE) and Random Effects (RE) models to estimate the impact of factors on enterprise profitability. Results and Discussion: Through estimating the two models on the article's dataset, the RE model shows that the coefficients of the explanatory variables in the model are statistically significant, whereas the FE model's coefficients are not. The estimation results from the RE model indicate that all variables including equity value, number of foreign workers, number of sectors the enterprise operates in the dummy variable for state support, average labour cost, and the dummy variable for the main operating sector of the enterprise affect the profitability of the enterprise. The RE model results suggest that the most significant factors impacting enterprise profitability are the business sector and state support. We need to have policies that create favorable conditions for businesses to achieve sustainable development goals (SDG). Conclusions: Results from the estimated model show that the most important factors affecting business profits are the business sector and state support. The state and businesses need to take measures to innovate activities to help businesses develop sustainably during the economic crisis.

Implementation of the Commission Recommendation of 7 December 1994 on the Transfer of Small-and Medium-Sized Enterprises in Albania: A German or Italian Model?

Abstract: In recent years, the European legislature and national parliaments have become more interested in allowing some types of intergenerational transfer before death. While the Albanian Civil Code establishes the invalidation of any succession agreement, other civil codes recognize some rights to dispose of or renounce the inheritance before death. This research investigates the possibility of implementing the Commission Recommendation of 7 December 1994 on the transfer of small-and medium-sized enterprises (94/1069/EC) in Albania by considering the Italian and German models. This contribution suggests that Albanian lawmakers could consider these models to align the Albanian legislation with the EU law Résumé: Ces dernières années, le législateur européen et les parlements nationaux se sont davantage intéressés à autoriser certains types de transfert intergénérationnel avant le décès. Alors que le Code civil albanais prévoit l’invalidation de tout accord successoral, d’autres codes civils reconnaissent certains droits de disposer ou de renoncer à l’héritage avant le décès. Cette recherche étudie la possibilité de mettre en oeuvre la recommandation de l’UE du 7 décembre 1994 sur le transfert des petites et moyennes entreprises (94/1069/CE) en Albanie en considérant les modèles italien et allemand. Cette contribution suggère que les législateurs albanais pourraient envisager ces modèles pour aligner la legislation albanaise sur le droit de l’UE.Zusammenfassung: In den letzten Jahren sind der europäische Gesetzgeber und die nationalen Parlamente stärker daran interessiert, bestimmte Formen der Übertragung von Erbschaftsansprüchen zwischen Generationen vor dem Tod zuzulassen. Während das albanische Zivilgesetzbuch die Ungültigkeit aller Erbschaftsvereinbarungen festlegt, erkennen andere Zivilgesetze bestimmte Rechte an, über das Erbe vor dem Tod zu verfügen oder darauf zu verzichten. Der vorliegende Aufsatz untersucht die Möglichkeit, die Empfehlung der Kommission vom 7. Dezember 1994 zur Übertragung kleiner und mittlerer Unternehmen (94/1069/EG) in Albanien umzusetzen, indem die italienischen und deutschen Modelle berücksichtigt werden. Der Beitrag schlägt vor, dass der albanische Gesetzgeber diese Modelle in Betracht zieht, um die albanische Gesetzgebung an das EU-Recht anzupassen.Resumen: En los últimos años, el legislador europeo y los parlamentos nacionales se han interesado más en permitir algunos tipos de transmisión intergeneracional antes de la muerte. Si bien el Código Civil albanés establece la invalidez de cualquier acuerdo sucesorio, otros códigos civiles reconocen algunos derechos para disponer o renunciar a la herencia antes de la muerte. Este trabajo investiga la posibilidad de implementar en Albania la Recomendación de la Comisión de 7 de diciembre de 1994 sobre la transmisión de pequeñas y medianas empresas (94/1069/CE) teniendo en cuenta los modelos italiano y alemán. Esta contribución sugiere que los legisladores albaneses podrían considerar estos modelos para alinear la legislación albanesa con la legislación de la UE.

Improvizing West Java MSMEs Using Quality Service Gaps Model

This study aims to understand the challenges and opportunities for the development of Micro, Small and Medium Enterprises (MSMEs) in West Java. With a very large number, MSMEs in West Java have great potential to drive economic growth. However, various obstacles such as access to capital, information, and technology are still an obstacle. This research proposes the application of the Service Science framework to map the MSME ecosystem and identify opportunities for service innovation. Thus, it is expected to increase the competitiveness of MSMEs and make a greater contribution to the regional economy. This research reveals that MSMEs in West Java face significant constraints in terms of access to capital, information, and technology. Through in-depth interviews with 8 MSME owners, this research aims to understand in-depth the challenges and opportunities faced by micro, small and medium enterprises. Thematic analysis of the interview data identified a gap between the ideal conditions that MSMEs desire and the actual conditions they experience. Using the Service Quality Gap Model, this study created four action plans to improve MSMEs in West Java. By addressing the identified gaps and encouraging collaboration between MSMEs, government, academia and industry, the Sadulur platform can catalyze the sustainable growth and development of MSMEs in West Java. These gaps, which we refer to as 'customer gaps', are manifested in four main themes: 1) the potential for MSMEs to create innovative products more easily, 2) the need to develop a strong business foundation and build sustainable brand value, 3) the importance of improving business processes and management to increase efficiency, and 4) the need to build good relationships with external parties to expand networks and business opportunities. These findings form the basis for formulating an action plan to improve the quality of services provided to MSMEs.

Social Media Marketing and Performance of Small and Medium-Sized Enterprises in South West Nigeria

The study investigated how small and medium-sized businesses (SMEs) in southwest Nigeria performed in terms of brand awareness, customer satisfaction, customer retention, and customer patronage in relation to social media marketing (ad placement, content marketing, referral marketing, and influencer marketing). The moderating effects of trust on SMEs' performance were also investigated in this study. Using a cross-sectional research methodology, the study used multistage sampling strategies, such as purposive, proportional, and simple random sampling. In all, 383 SMEs' owners and managers were chosen from the states of Ekiti, Ondo, and Oyo. Social media marketing significantly improved brand awareness, customer satisfaction, customer retention, and consumer patronage, according to the research. Additionally, the results showed that trust significantly moderated the performance of the chosen SMEs. According to the study's findings, social media marketing significantly impacted the performance of SMEs. According to the survey, SMEs should create a thorough social media marketing plan that includes a range of techniques like ad placement, content marketing, influencer marketing, and referral marketing. These results advance knowledge on how social media marketing might improve SMEs' performance in the specific context of Southwest Nigeria

Exploring small and medium enterprise performance through dynamic capability perspective

Background: Small and medium enterprises (SMEs) are crucial to both global and national economies. They create jobs, boost competitiveness and drive economic growth. In the digital age, SMEs have increased opportunities to expand, enhance their capabilities and compete effectively.Aim: This research explores how environmentally conscious SMEs improve performance using dynamic capabilities (DCs) approach. It specifically examines how e-commerce and management capabilities contribute to SME performance in the Indonesian culinary sector and highlights the role of strategic orientation in this study.Setting: The study focusses on SMEs in the culinary sub-sector located in West Java, DKI Jakarta, and Banten provinces in Indonesia. These regions were selected because of their vibrant culinary industries and the significant role SMEs play in the local economy and gross domestic product (GDP).Methods: A quantitative analysis was conducted using online surveys via Google Forms, collecting 236 responses. The data were analysed with Partial Least Squares Structural Equation Modeling (PLS-SEM) using Smart PLS 3.0 software.Results: Four hypotheses about DCs and SME performance were tested, with three being accepted. The study found that DCs alone do not directly enhance SME performance.Conclusion: The study highlights the importance of strategic orientation in mediating DCs with SME performance. In the digital era, aligning goals with market needs helps SMEs use their DCs more effectively, adapt to changes, innovate and grow sustainably.Contribution: This research contributes to the literature on DCs and strategic management, offering insights into improving SME performance in Indonesia.