The impact of dynamic capabilities on SME performance in a volatile environment as moderated by organizational inertia
Abstract
Purpose
This paper aims to examine the influence of the dynamic capabilities of small and medium enterprises (SMEs) on organizational performance, and the interaction between dynamic capabilities and organizational inertia in a volatile environment.
Design/methodology/approach
A quantitative survey was carried out in Lithuania's SME sector. In order to achieve the aim of this empirical research, a sample of 360 SMEs was analyzed.
Findings
This exploratory study offers a conceptual model for dynamic capabilities and organizational inertia in a volatile environment. The findings suggest that dynamic capabilities have positive effects on non-financial relative organizational performance, though no impact on financial relative organizational performance has been revealed. The authors argue that organizational inertia moderates dynamic capabilities and relative organizational performance.
Research limitations/implications
One suggestion for further research is to investigate the interaction between dynamic capabilities and organizational inertia in a stable environment and to perform longitudinal research embracing a broader sample of organizations.
Originality/value
The study addresses a gap in strategic management literature and practice, examining the interaction between SME dynamic capabilities and organizational inertia in a volatile environment during an economic crisis.
Keywords
Acknowledgements
The authors are grateful to Research Council of Lithuania for research funding (Project No. MIP-019/2011).
Citation
Nedzinskas, Š., Pundzienė, A., Buožiūtė-Rafanavičienė, S. and Pilkienė, M. (2013), "The impact of dynamic capabilities on SME performance in a volatile environment as moderated by organizational inertia", Baltic Journal of Management, Vol. 8 No. 4, pp. 376-396. https://doi.org/10.1108/BJM-01-2013-0003
Publisher
:Emerald Group Publishing Limited
Copyright © 2013, Emerald Group Publishing Limited