This paper presents a multi-level model that examines the impact of dynamic capabilities on the internationalization of SMEs while taking into account the interactions among them. The purpose of the research is to understand the applicability of dynamic capabilities at the individual and the firm level to the SME internationalization process in developing country context and to assess to what extent a firm's asset position and individual level dynamic capabilities influence the generation of firm level dynamic capabilities in SMEs. First, the dynamic capabilities theory was theoretically linked to the internationalization phenomenon. The relationships among firm-level dynamic capabilities, individual-level dynamic capabilities (owner specific dynamic capabilities), and internationalization were identified. The research framework and hypotheses were developed and empirically tested with 197 SMEs. The findings established that owner-specific dynamic capabilities have a positive influence on both firm dynamic capabilities and internationalization, and firm dynamic capabilities positively influence internationalization. It was also found that the market assets position measured as perceptual environmental dynamism positively influenced firm dynamic capabilities but structural and reputational asset positions of SMEs did not influence generation of firm dynamic capabilities. Moreover, firm dynamic capabilities had a mediation effect in the relationship between owner-specific dynamic capabilities and internationalization. Theoretically, this confirms the relevance of dynamic capability theory to internationalization and the possibility of integrating existing internationalization theories. Entrepreneurs, SME managers, and policy-makers could gain valuable insights on how entrepreneur and firm capabilities lead to better international prospects from this outcome.
Small and medium-sized enterprises (SMEs) play a key role in economic and social development of any country. However, research has revealed that SMEs in Sri Lanka suffer from poor sustainability and low performance compared to other countries. According to the literature, SME performance is associated with directly unobservable owner and firm factors which are based on internal capabilities. With the ever-increasing dynamism of the market and increased competition from large multinational companies, it is essential for the SMEs to adapt to the environment promptly. Dynamic capabilities of export SMEs must be more amplified and leveraged than those of a firm with a less ambitious, purely domestic SMEs. Given the strong position of entrepreneur in the SME context, this study argues that antecedents to dynamic capabilities can be found at the individual entrepreneur level. It identifies entrepreneurial orientation, human capital and social capital of the entrepreneur as key characteristics at the individual level. This research used a quantitative research methodology and a randomly selected sample of 197 export SMEs in Sri Lanka were analyzed. The results were analyzed using partial least squares–structured equation modelling (PLS–SEM). This study empirically established that entrepreneur characteristics positively influence development of organizational dynamic capabilities. The outcome of this research will enhance the understanding of SME capability development process.
Knowledge has become a fundamental asset whose successful application helps organizations to remain competitive while delivering creative products and services. Knowledge intensive firms are organizations that employ highly qualified professionals as the majority and the employees in these organizations are mainly engaged in knowledge intensive activities. IT and Banking industries have been identified as knowledge intensive industries following these conditions and they have been implementing different practices to manage knowledge. However, IT and banking industries are experiencing a high turnover rate. This study aims to identify how the use of knowledge management practices contributes towards employee retention in IT and banking industries. Quantitative approach was used for the research. The sample size was 179, comprising of 97 from IT industry and 82 from banking industry. The data was gathered using a structured questionnaire. There is a strong positive relationship between knowledge management practices and employee satisfaction and employee intention of retention. The study showed that the adoption of knowledge management practices in IT industry is higher than the banking industry. It found that the impact of knowledge management practices on employee retention is slightly higher in IT industry than banking industry. This concludes that, the impact of knowledge management practices on employee retention depends on the industry and retention is high when the adoption of knowledge management practices is high. The results give insights to policy makers and managers of IT and banking industries in developing knowledge management practices.
This study aims to identify key Entrepreneur Capabilities (EC) of international entrepreneurs and recognize the significance of such ECs in the digital disruptive technology industry in Sri Lanka. Most theories and experiments are established in developed countries, and sometimes those may not be applicable in emerging countries. Reviewing and exploring narrations of successful entrepreneurs assist in recognizing their unique processes and identifying how socio-cultural and economic factors of their native country shape the international entrepreneurial process. The interviews were carried out with industry leaders who became international entrepreneurs early in their career and a qualitative case study method was used in this study. The data was triangulated using secondary documents. Universally applicable thoughts that they generated through unusual integration, cross-cultural understanding and discipline and maturity could be considered as the main themes that emerged. Relationship building capability that was supported by passion, risk acceptance and locus of control and honesty was another theme that emerged. The entrepreneurial capability was further supported by inspirational leadership, pro-activeness and opportunity utilization, language and communication ability, and flexibility. Moreover, ECs that were developed from childhood gradually supported to build the mindset of the competent international entrepreneur. The childhood experiences,
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