The role of Dynamic Capability in Mediating the Effect of Environmental Dynamism and Managerial Capabilities, toward Firm Performance of Small Medium Enterprises

Adrian Permana, Arsono Laksmana and Lena Ellitan
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Adrian Permana: Widya Mandala Catholic University Surabaya, Indonesia.
Arsono Laksmana: Widya Mandala Catholic University Surabaya, Indonesia.
Lena Ellitan: Faculty of Business Widya Mandala Catholic University Surabaya, Indonesia.

International Journal of Science and Business, 2020, vol. 4, issue 7, 1-25

Abstract: Small Medium Enterprises (SMEs) hold business potentials that gain a serious attention from the government. Some factors that affect the efficiency of SMEs include: internal and external factors. The success of SMEs depends on its abilities in managing its internal and external factors through environment factor analysis and the creation and execution of work strategy. Using PLS-SEM analysis, sample used for the study was 80 Small Medium Enterprises (SMEs) owners or managers in Surabaya, Indonesia. The findings of this study state that Managerial Capabilities has the most significant impact. Meanwhile, Environmental Dynamism does not have any impact towards Firm Performance, because SMEs are independent in managing the company, in terms of its capitalization, product or service development, and flexibility resulting from its low operating cost of workers, and place of business.

Keywords: Firm Performance; Dynamic Capabilities; Environmental Dynamism; Managerial Capabilities; Small Medium Enterprises (search for similar items in EconPapers)
Date: 2020
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