The mediating role of dynamic managerial capabilities: The interplay between dominant logic and small‐ and medium‐sized enterprises performance in China

Abstract

Transition economies, such as China, are characterized by volatile and rapidly changing markets. Firms, in order to be successful and get a competitive advantage over their competitors, need to build intangible resources. In the light of the resource‐based view and dominant logic (DL), this study is an endeavor in this regard and proposes that DL and managerial capabilities are intangible resources, which can drive the performance of small‐ and medium‐sized enterprises (SMEs). We hypothesized that dynamic managerial capabilities (DMCs), measured by human capital along with social capital and managerial cognition, play a mediating role in the relationship between DL, consisting of proactiveness and routine, and firm performance. The data in this study were obtained through a survey from 204 SMEs in China and were analyzed by structural equation modeling to generate results. We found that while successfully utilizing intangible/operant resources that are characterized as firm dynamic capabilities, SMEs can achieve superior performance and competitive advantage. Our results support the proposed hypotheses that show the importance and significance of DL and DMCs in order to attain higher level of performance. The concept of DL and its impact on SME's performance has been less researched in general, particularly in China. Limited research is available regarding intangible resources and their impact on SME performance in China.

Role of entrepreneurial capabilities in small and medium enterprises’ competitiveness in Lagos State

“…The first hypothesis establishes that SME managers/owners should identify, replicate, appraise, and appropriately utilize knowledge and information, which is compatible with the expertise business strategy, and respond to changing marketing dynamics before the competitors. The findings are consistent with the positions of Khan et al, (2019); Li & Liu (2014); Yang, Zheng, and Zhao (2014), who assert that entrepreneurial capabilities are critical to explaining firm performance.…”

“…The financial and marketing capabilities of enterprises are significantly correlated with higher growth and innovation and thus are two ingredients for achieving high growth. Khan et al (2019) looked into the mediating role of dynamic managerial capabilities: The interplay between dominant logic and small-and medium-sized enterprises performance in China and suggest that dominant logic and operational capabilities are critical assets that can influence the performance of SMEs in light of the resource-based view. They theorized that dynamic managerial capabilities, as measured by intellectual resources, cultural connections, and cognitive management function, would mediate the relationship between DL (proactiveness and routine) and corporate performance.…”

“…Large-firm competitiveness studies typically highlight the significance of a strategic alignment between strategy, environment, and organization variables. According to Khan, Atlas, Xuehe, Khan, and Khan (2019), the connection among strategies, capabilities, and the environment is required for coherence and strategic performance management consistency. Competing elements that distinguish a firm's competitive advantage are its capabilities and effectiveness (Li & Liu, 2014).…”

Toma de decisiones basada en la productividad en Pymes manufactureras: aproximación desde la Lógica Difusa

“…Para la PYME la toma de decisiones es indispensable, puesto que una decisión mal tomada puede conllevar una situación comprometedora (Brunetto & Farr-Wharton, 2007). La idea es tener un claro entendimiento del entorno de actuación, es decir, que la toma de decisión contribuya a la adopción de mejoras de la organización (Khan et al, 2019). Una vez adecuada, esta decisión permite tener claro los pasos a seguir para lograr el éxito empresarial; sin embargo, uno de los principales problemas en las Pymes es la falta de capacidades gerenciales de los puestos estratégicos.…”