The Effect of Entrepreneurship of SMEs on Corporate Capabilities, Dynamic Capability and Technical Performances in South Korea

Abstract

There has been a recent increase in the interest towards founding companies and in line with the South Korean Government's policy on start-up support, discussions are rife about the effect of entrepreneurship on the management and performances of these companies. To enhance the competitiveness of SMEs, it is expedient to acquire and deploy consistent entrepreneurship, differentiate corporate resources, ensure the appropriate utilization of resources and the integration of such factors in response to the changing environment. This research examines relationships among entrepreneurship, three components of corporate capabilities, dynamic capability and technical performance based on resource-based view and the dynamic capability theory. The authors also investigate the moderating role of corporate life cycle. To test the hypothesis, we conducted a survey on 352 technologies -innovative SMEs located in South Korea via professional research institutes. The findings confirm the hypothesis that SMEs' entrepreneurship has a positive effect on three kinds of corporate capabilities (e.g., marketing, R&D, operations capability), and it had a positive effect on dynamic capability, whiles dynamic capability also had an influence on technical performances. The findings also confirmed the hypothesis that corporate life cycle moderates the relationship between dynamic capability and technical performances respectively. The research implications for both practitioners and academicians are discussed.

Antecedents and Consequences of Innovation and Business Strategy on Performance and Competitive Advantage of SMEs

“…Opinions about innovation are diverse (e.g., Limaj & Bernroider, 2019;Yi, Han, & Cha, 2018), more emphasis is placed on innovation performance based on business capabilities in explorative and exploitative innovation. The indicators used by Limaj & Bernroider, (2019) are the ability of organizations to meet the expectations of consumers and customers, new product innovations and TQM, using products themselves within the company's internal environment as an effort to build advocacy for consumers, and the courage to try to enter more marketing channels as e-commerce, as well as the price-oriented emphasis on quality and quantity.…”

A Review of Dynamic Capabilities, Innovation Capabilities, Entrepreneurial Capabilities and Their Consequences

“…Some scholars opine that dynamic capabilities do not show the attributes of heterogeneity and hence cannot be a source of competitive edge (e.g., Zahra, Sapienza, & Davidsson, 2006;Easterby-Smith & Prieto, 2008;Ogunkoya et al, 2014) and that the impact of dynamic capabilities is limited (Zott, 2003) and indirect (Cepeda & Vera, 2007;Nieves & Haller, 2014). Other researchers argue that dynamic capabilities foster competitive advantage (e.g., Ambrosini & Bowman, 2009;Arndt, 2011;Aramand & Valliere, 2012;Li & Liu, 2014;Wang et al, 2015;Lee, Wu, Kuo, & Li, 2016) and technical performances (Yi, Han & Cha, 2018). The author reason that dynamic capabilities promote competitiveness and enhance firm performance.…”

“…Entrepreneurial capability involves judgments and actions of an entrepreneur that contributes to reshaping and leveraging a firm's capability portfolio (Adner & Helfat, 2003;Augier & Teece, 2009), firm competitiveness and performance (Lestari, Leon, Widyastuti, Brabo, & Putra, 2020). Entrepreneurship plays an important role in creating corporate capabilities as (e.g., marketing, R&D, operations capability), has a positive effect on dynamic capability (Yi, Han, & Cha, 2018). Empirical studies on entrepreneurial capability are scanty.…”

The Impact of Entrepreneurial Orientation on New Product Creativity, Competitive Advantage and New Product Performance in SMEs: The Moderating Role of Corporate Life Cycle

“…For instance, Ref. [18] used it in explaining how SME entrepreneurship leads to dynamic capabilities and technical performance. Similarly, Ref.…”