Do Dynamic Capabilities Facilitate Business Model Innovation in Small and Medium-Sized Chinese Family Companies?

Abstract

This study investigates whether small- and medium-sized enterprises (SMEs) under family influence (FI) can achieve business model innovation (BMI) through dynamic capabilities (DCs) as promoted by prior research. Overall, 259 small and medium-sized family firms in Southeastern China were examined and analysed using the partial least squares structural equation modelling (PLS-SEM) method. The findings showed a direct negative link between FI-DCs (sensing, seizing, and transforming capabilities), sensing capabilities—value capture, transforming capabilities—value proposition/value creation, and a positive link between seizing capabilities—value creation. Additionally, the negative moderation effect of environment dynamism was found between sensing capabilities—value capture, seizing capabilities—value creation, and transforming capabilities—value proposition. This research provides various new insights for practitioners and researchers in small and medium-sized family firms to achieve BMI through DCs. It develops an empirical, multi-dimensional hypothetical model from a micro perspective that includes the moderating role of the influencing relationship.

Business model transition and entrepreneurial small businesses: a systematic literature review

“…Bitetti and Gibbert (2022) identify four sensing capabilities – responding, overturning, anticipating, dribbling (ROAD) – involved in initiating BMI processes. Further researchers have analyzed BMI through DC in small- and medium-sized family enterprises; findings of empirical studies in this area show a positive link between seizing capabilities and value creation (Huang and Ichikohji, 2022). Furthermore, research has identified drivers for BMI and spotlighted the role of DC.…”

Dynamic Capabilities and Performance of Family Businesses in Emerging Economies

“…The concept of dynamic capabilities is important within strategic management because the resource-based perspective was unable to explain how and why certain organizations achieve sustainable competitive advantages in situations of rapid and unpredictable changes (Nedzinskas et al, 2013). Under the RBV perspective, companies are seen as a set of tangible and intangible resources and researchers affirm that the only way to obtain competitive advantage is through the acquisition and possession of valuable, rare, inimitable, and non-replaceable resources (Huang & Ichikohji, 2022;Nedzinskas et al, 2013). However, Teece et al (1997) pointed out that there is an alternative way to generate competitive advantages, called dynamic capabilities, a concept that emphasizes two key aspects that were not covered by the RBV: (a) dynamic, which highlights the ability of an organization to renew its competencies and achieve congruence with the changing environment; and, (b) capabilities, which refers to the key role of strategic management to adapt, integrate, and appropriately reconfigure internal and external organizational skills, resources, and functional competencies and thus be able to adapt to the constantly changing environment requirements (Teece, 2018).…”

Assessing the sustainable development of firms: The moderating role of transformational leadership and firm size

“…Similarly, Huang and Ichikohji (2022) conducted a study on 259 Chinese manufacturing SMEs and found that GDC positively influences the adoption of GI, which in turn leads to improved environmental performance. To achieve GI, an organization must utilize and reconfigure internal and external dynamic capacities (Lin & Chen, 2016).…”