Indian Journal of Science and Technology

Abstract

Objectives: Controversial results are found in literature regarding the influence of strategic flexibility to SMEs’ performance, which is related to lack of understanding about the contextual factors required for its optimal functioning. Thus, it is necessary to conduct a study to investigate the contextual condition enhancing the effect of flexibility. Methods/ Statistical Analysis: Using a quantitative research method, this study examined the proposed model in Medium Tech Iranian manufacturing SMEs. Sample includes 60 SMEs which have been chosen through stratified sampling technical. Factor analysis is used for measurement assessment indicating high reliability and validity of the instrument. In order to test the hypothesis, this study has applied hierarchical regression analysis to test the moderating effect of ambidextrous learning on strategic flexibility–performance relationship. Findings: The relationship between flexibility consisting of both action and resource reconfiguring flexibility and SMEs’ performance is approved in this study. Contextual Ambidextrous Learning is also found as the required contextual factor moderating this relationship. The result is in line with studies that are in favor of necessity of both Exploitative and Explorative innovation strategies for SMEs. Application/Improvements: The result from study has examined and approved a hierarchical relationship between levels of dynamic capabilities and has shed light on application of dynamic capabilities in handling strategy execution in SMEs.

Keywords: Contextual Ambidextrous Learning, SMEs, Strategic Flexibility