Sustaining innovation during downsizing strategy through knowledge coupling, business process digitization, and market capitalizing agility

Abstract

COVID-19 has developed chaos and uncertainty for small and medium enterprises (SMEs) causing mass downsizing. Under such uncertainty, innovation is key to survival and agility to growth. This study examines role of knowledge coupling and business process digitization (BPD) in sustaining innovation through market capitalizing agility (MCA) besides downsizing strategy. Data have been collected from top and mid management of Chinese manufacturing SMEs and analyzed with knowledge-based view and self-tuning model through Smart-PLS 4. Knowledge coupling positively contributes to MCA and innovation irrespective of downsizing strategy. Effect of BPD on innovation performance is same; however, insignificant on MCA in no-downsizing sample. Likewise, MCA positively influences innovation performance and positively mediates between knowledge coupling (BPD) and innovation performance only during downsizing. This study is first of its kind to establish mediating effect of MCA between knowledge coupling (BPD) and innovation performance during downsizing phase and offers significant theoretical and practical implications. JEL Classification: J63, O31

The organisational impact of agility: a systematic literature review

“…Onngam and Charoensukmongkol (2023) highlighted that firms benefit more from social media agility when the organisational size is smaller and the dynamism of the business environment is lower. Sharif et al (2022) found that market capitalising agility only mediates the relationship between knowledge coupling and firm innovation during business downsizing. Khan (2020) and Zhou et al (2019) noted that marketing agility improves firm financial performance.…”

Unlocking agility: Trapped in the antagonism between co-innovation in digital platforms, business analytics capability and external pressure for AI adoption?

“…The majority of those surveyed are presidents or general managers as well as directors of systems and technology and marketing. Interestingly, the data were collected during periods when the pandemic forced companies to strengthen the adoption of digital technologies in an attempt to be more agile (Fawad Sharif et al ., 2022). The minimum R -squared approach was employed in our study to calculate the minimum sample size required to detect the effect of a given test at the desired level of significance ( p < 0.05) (Hair et al ., 2019).…”

“…On the one hand, some authors emphasize the importance of external pressures for artificial intelligence adoption while encouraging companies to accelerate their digital transformations, such as developing their BAC (Bag et al ., 2021), which leads to increased agility (Ashrafi et al ., 2019). As a case in point, the pandemic forced companies to strengthen digital technology adoption, which had a positive impact on agility (Fawad Sharif et al ., 2022). Other studies, on the other hand, argue that this type of pressure has negative consequences (Arias-Pérez and Cepeda-Cardona, 2022; Cao et al ., 2021) and should be viewed as an obstacle to or detour from the company's plan to become more competitive with its digital resources (Lin et al ., 2020; Nijssen and Paauwe, 2012).…”