Dynamic Capability of SMEs under Exogenous Crises
A Case Study of SMEs Faced with COVID-19
DOI:
https://doi.org/10.52731/lbds.v004.296Keywords:
Dynamic Capability, Crisis management, SMEs, BMI, COVID-19Abstract
Amid the coronavirus disease 2019 (COVID-19) pandemic, small and medium-sized enter-prises (SMEs) faced unprecedented challenges. Hence, the ability to adapt and innovate business models to thrive in a disrupted environment has become paramount. This study employs the con-cept of dynamic capability, a theoretical framework designed to address adaptation in uncertain contexts. The objective is to conduct a qualitative analysis of how SMEs navigated these changes during the pandemic. Three dynamic capabilities are identified by examining three case studies, which enabled SMEs to mitigate the impacts of COVID-19. One is the capability to utilize crisis-induced moratoriums for organizational development, which is a new finding and theoretical contribution. This study offers strategic insights for managing and overcoming exogenous crises in the future.
References
D. J. Teece, G. Pisano, and A. Shuen, “Dynamic capabilities and strategic management,” Strateg. Manag. J., vol. 18, no. 7, pp. 509–533, Aug. 1997, doi: 10.1002/(SICI)1097-0266(199708)18:7<509::AID-SMJ882>3.0.CO;2-Z.
K. M. Eisenhardt and J. A. Martin, “Dynamic capabilities: what are they?,” Strateg. Manag. J., vol. 21, no. 10–11, pp. 1105–1121, Oct. 2000, doi: 10.1002/1097-0266(200010/11)21:10/11<1105::AID-SMJ133>3.0.CO;2-E.
D. J. Teece, “Explicating dynamic capabilities: the nature and microfoundations of (sus-tainable) enterprise performance,” Strateg. Manag. J., vol. 28, no. 13, pp. 1319–1350, Dec. 2007, doi: 10.1002/smj.640.
M. Zollo and S. G. Winter, “Deliberate Learning and the Evolution of Dynamic Capabil-ities,” Organ. Sci., vol. 13, no. 3, pp. 339–351, Jun. 2002, doi: 10.1287/orsc.13.3. 339.2780.
P. Chowdhury, S. K. Paul, S. Kaisar, and M. A. Moktadir, “COVID-19 pandemic related supply chain studies: A systematic review,” Transp. Res. Part E Logist. Transp. Rev., vol. 148, p. 102271, 2021.
F. Eggers, “Masters of disasters? Challenges and opportunities for SMEs in times of cri-sis,” J. Bus. Res., vol. 116, pp. 199–208, 2020.
M. Sigala, “Tourism and COVID-19: Impacts and implications for advancing and reset-ting industry and research,” J. Bus. Res., vol. 117, pp. 312–321, 2020.
S. M. R. Dente and S. Hashimoto, “COVID-19: A pandemic with positive and negative outcomes on resource and waste flows and stocks,” Resour. Conserv. Recycl., vol. 161, p. 104979, 2020.
Y. Lu, J. Wu, J. Peng, and L. Lu, “The perceived impact of the Covid-19 epidemic: evi-dence from a sample of 4807 SMEs in Sichuan Province, China,” Environ. Hazards, vol. 19, no. 4, pp. 323–340, Aug. 2020, doi: 10.1080/17477891.2020.1763902.
M. Cowling, R. Brown, and A. Rocha, “Did you save some cash for a rainy COVID-19 day? The crisis and SMEs,” Int. Small Bus. J. Res. Entrep., vol. 38, no. 7, pp. 593–604, Nov. 2020, doi: 10.1177/0266242620945102.
E. Kahveci, “Surviving COVID-19 and beyond: a conceptual framework for SMEs in crisis,” Bus. Theory Pract., vol. 22, no. 1, Art. no. 1, May 2021, doi: 10.3846/btp.2021.13020.
A. R. C. Omar, S. Ishak, and M. A. Jusoh, “The impact of Covid-19 Movement Control Order on SMEs’ businesses and survival strategies,” Geogr.-Malays. J. Soc. Space, vol. 16, no. 2, pp. 90–103, 2020.
D. J. Teece, “Business Models, Business Strategy and Innovation,” Long Range Plann., vol. 43, no. 2, pp. 172–194, Apr. 2010, doi: 10.1016/j.lrp.2009.07.003.
K. Ragazou, I. Passas, A. Garefalakis, and I. Dimou, “Investigating the Research Trends on Strategic Ambidexterity, Agility, and Open Innovation in SMEs: Perceptions from Bib-liometric Analysis,” J. Open Innov. Technol. Mark. Complex., vol. 8, no. 3, p. 118, Sep. 2022, doi: 10.3390/joitmc8030118.
D. Ibarra, A. Z. Bigdeli, J. I. Igartua, and J. Ganzarain, “Business Model Innovation in Established SMEs: A Configurational Approach,” J. Open Innov. Technol. Mark. Com-plex., vol. 6, no. 3, p. 76, Sep. 2020, doi: 10.3390/joitmc6030076.
K. S. Al-Omoush, D. Palacios-Marqués, and K. Ulrich, “The impact of intellectual cap-ital on supply chain agility and collaborative knowledge creation in responding to unprec-edented pandemic crises,” Technol. Forecast. Soc. Change, vol. 178, p. 121603, May 2022, doi: 10.1016/j.techfore.2022.121603.
F. Zouaghi, M. Sánchez, and M. G. Martínez, “Did the global financial crisis impact firms’ innovation performance? The role of internal and external knowledge capabilities in high and low tech industries,” Technol. Forecast. Soc. Change, vol. 132, pp. 92–104, Jul. 2018, doi: 10.1016/j.techfore.2018.01.011.
W. Dyduch, P. Chudziński, S. Cyfert, and M. Zastempowski, “Dynamic capabilities, value creation and value capture: Evidence from SMEs under Covid-19 lockdown in Po-land,” Plos One, vol. 16, no. 6, p. e0252423, 2021.
B. R. Purnomo, R. Adiguna, W. Widodo, H. Suyatna, and B. P. Nusantoro, “Entrepre-neurial resilience during the Covid-19 pandemic: navigating survival, continuity and growth,” J. Entrep. Emerg. Econ., vol. 13, no. 4, pp. 497–524, 2021, doi: 10.1108/JEEE-07-2020-0270.
S. Rashid and V. Ratten, “Entrepreneurial ecosystems during COVID-19: the survival of small businesses using dynamic capabilities,” World J. Entrep. Manag. Sustain. Dev., vol. 17, no. 3, pp. 457–476, 2021.
T. Eriksson, “Processes, antecedents and outcomes of dynamic capabilities,” Scand. J. Manag., vol. 30, no. 1, pp. 65–82, 2014.
S. M. F. Sharif, W. Wang, N. Yang, O. Alghamdi, F. Kanwal, and M. G. Gebremariam, “Sustaining SME agility through knowledge coupling, business process digitization, and innovation during crisis,” J. Eng. Technol. Manag., vol. 71, p. 101802, Jan. 2024, doi: 10.1016/j.jengtecman.2024.101802.
T. W. Malnight and I. Buche, “The Strategic Advantage of Incumbency,” Harv. Bus. Rev., vol. 100, no. 1–2, pp. 43–48, 2022.
J. Kahl, S. de Klerk, and J. Whiteoak, “Managing empowerment: adjusting organisa-tional units’ autonomy to achieve corporate agility,” J. Organ. Eff. People Perform., vol. 10, no. 4, pp. 527–545, 2023.
S. Malinen, T. Hatton, K. Naswall, and J. Kuntz, “Strategies to enhance employee well‐being and organisational performance in a postcrisis environment: A case study,” J. Con-tingencies Crisis Manag., vol. 27, no. 1, pp. 79–86, Jan. 2019, doi: 10.1111/1468-5973.12227.
