Bashi , Makhmoo ; Abdulmohsen Al alih, Abdulaziz; P adhan, Sudeep a
A icle
Manage ial ies, business model inno a ion & SME
pe o mance: Mode a ing ole o en i onmen al
u bulence
Jou nal o Inno a ion & Knowledge (JIK)
P o ided in Coope a ion wi h:
Else ie
Sugges ed Ci a ion: Bashi , Makhmoo ; Abdulmohsen Al alih, Abdulaziz; P adhan, Sudeep a (2023) :
Manage ial ies, business model inno a ion & SME pe o mance: Mode a ing ole o en i onmen al
u bulence, Jou nal o Inno a ion & Knowledge (JIK), ISSN 2444-569X, Else ie , Ams e dam, Vol. 8,
Iss. 1, pp. 1-12,
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Manage ial ies, business model inno a ion & SME pe o mance:
Mode a ing ole o en i onmen al u bulence
Makhmoo Bashi
a,
*, Abdulaziz Al alih
a
, Sudeep a P adhan
b
a
Depa men o Business Adminis a ion, College o Business and Economics, Qassim Uni e si y, P.O.Box: 6640, Bu aidah, Qassim 51452, Saudi A abia
b
IBS Hyde abad, IFHE Uni e si y, Su ey No- 156/157, Don anpally Village, Shanke pally Mandal, RR Dis ic , Telengana 501203, India
ARTICLE INFO
A icle His o y:
Recei ed 4 Augus 2022
Accep ed 1 Janua y 2023
A ailable online 27 Janua y 2023
ABSTRACT
Despi e he su ge in academic and non-academic li e a u e on business model inno a ion (BMI) and i s
implica ions on fi m pe o mance, esea ch on he an eceden s o BMI is s ill e ol ing. Building on ins i u-
ional heo y, we empi ically ad ance ex an knowledge by p o ing ha manage ial ies play a significan
ole in BMI and fi m pe o mance. We also p opose ha BMI media es he ela ionship be ween manage ial
ies and fi m pe o mance. In addi ion, we a gue ha he ela ionship be ween manage ial ies and fi m pe -
o mance is con ingen on he deg ee o en i onmen al u bulence. Ou analysis o 280 Saudi-based small
and medium-sized fi ms highligh s ha manage ial ies ha e a posi i e impac on fi m pe o mance. The
media ion es s indica ed he significance o BMI in he ela ionship be ween manage ial ies and fi m pe o -
mance. Resul s, howe e , do no confi m he mode a ing ole o en i onmen al u bulence. The s udy b ings
in o pe spec i e ha SME owne s and manage s need o gi e mo e a en ion o manage ial ies o suppo
business model inno a ion.
© 2023 The Au ho s. Published by Else ie España, S.L.U. on behal o Jou nal o Inno a ion & Knowledge. This
is an open access a icle unde he CC BY-NC-ND license
(h p://c ea i ecommons.o g/licenses/by-nc-nd/4.0/)
Keywo ds:
Business model inno a ion
Manage ial ies
Fi m Pe o mance
SMEs
JEL Codes:
030
L250
053
In oduc ion
S udies on business model inno a ion (BMI) is ma ked by he
s eady ise o bo h heo e ical as well as empi ical con ibu ions
(Clauss e al., 2021;Foss & Saebi, 2017;Massa, Tucci & A uah, 2017;
Bashi & Ve ma, 2019). Top in e na ional consul ing fi ms sugges
ha in imes o con inuous change, BMI may p o ide sou ces o ongo-
ing compe i i e ad an age (Ve muelen, 2018). Resea che s ha e
made se e al a emp s o cha ac e ize BMI h ough a p ocess-based
lens (see o example F anke be ge e al., 2013), and ha e ocused
on i s in e ela ion wi h s a egy (Lanzolla & Ma kides, 2021), on
ypology de elopmen (Johnson, Ch is ensen & Kage mann, 2008),
and on pe o mance (Ami & Zo , 2008;Bashi & Ve ma, 2019;Clauss
e al., 2021). Despi e ex ensi e con ibu ions o he BMI li e a u e on
i s e olu ion, impac s upon fi m pe o mance and s a egies, he e is
li le wo k on he an eceden s o BMI. A e e iewing mo e han wo
decades o s udies examining BMI, Foss and Saebi (2017) a gue ha
p esen li e a u e has mos ly igno ed in e nal BMI d i e s. The e is
limi ed esea ch on whe he and how manage ial ies o manage-
men in di e en fi ms, uni e si ies and go e nmen al o ganiza ions
influence BMI. The e is a dea h o s udies on BMI among SMEs. SMEs
di e om no mal fi ms in e ms o hei size, ne wo ks, access o
capi al, esou ces and employees. This s udy examines manage ial
links in e ms o how hey ela e o BMI, en i onmen al u bulence
and fi m pe o mance, using a unique da ase based on su eying
280 small- and medium-sized en e p ises (SMEs).
Manage ial ies ha e been conside ed key d i e s o fi m inno a-
ion (Gao e al., 2008;Wang & Chung, 2013), and enable fi ms o
de elop dynamic capabili ies (Blyle & Co , 2003) h ough he acqui-
si ion o a e esou ces (Bou y, 2000). This s udy d aws on he s a e-
gic managemen li e a u e and concep ualizes manage ial ies as
links o manage s in di e en companies, o uni e si ies and o o fi-
ce s o go e nmen . We d aw om ins i u ional heo y o desc ibe
manage ial ies and hei ole in BMI. The ins i u ional en i onmen
plays a pi o al ole in acili a ing o obs uc ing manage ial ies o
ob ain ins i u ional suppo ha can be c ucial o BMI. The s udy
also asse s ha en i onmen al u bulence le els influence links
be ween managemen ies and business pe o mance. Mo e c ucially,
his esea ch in es iga es BMI as a ac o media ing links connec ing
managemen ies and company pe o mance.
Small and medium en e p ises (SMEs) oday play a huge ole in
coun ies’economic de elopmen (Sub ahmanya & Logana han,
2021). They a e engaged in con inuous inno a ions (Su, Khan, Lew,
Pa k & Choksy, 2020), expo s, and employmen (Su e al., 2020).
SMEs ace ce ain cons ain s such as limi ed financial esou ces;
* Co esponding au ho .
E-mail add ess: [email p o ec ed] (M. Bashi ).
h ps://doi.o g/10.1016/j.jik.2023.100329
2444-569X/© 2023 The Au ho s. Published by Else ie España, S.L.U. on behal o Jou nal o Inno a ion & Knowledge. This is an open access a icle unde he CC BY-NC-ND license
(h p://c ea i ecommons.o g/licenses/by-nc-nd/4.0/)
Jou nal o Inno a ion & Knowledge 8 (2023) 100329
Jou nal o Inno a ion
&Knowledge
h ps://www.jou nals.else ie .com/jou nal-o -inno a ion-and-knowledge
poo en ep eneu ial and manage ial skills, ma ke ing, low le els o
echnology adap a ion and low p oduc i i y (Ramadani e al., 2017;
Ja a i-Sadeghi e al., 2022; Bala Sub ahmanya & Logana han, 2021).
SMEs need ex e nal suppo , such as co-ope a i e ne wo ks, o o e -
come such cons ain s o inno a ion and pe o mance (V on is e al.,
2020;Ja a i-Sadeghi e al., 2020;Zucchella, 2021;Mahdi aji e al.,
2022;Onjewu e al., 2022).
The majo con ibu ions made by his s udy a e as ollows: Fi s ly,
i con ibu es o cu en li e a u e ega ding BMI (Foss & Saebi, 2017;
Mi oshnychenko e al., 2021;Spei h e al., 2014). I b oadens he
scope o BMI esea ch, conside ing ha he field has mos ly deal
wi h BMI’s implica ions o fi m pe o mance. This s udy p o ides
insigh s in o he in e nal d i e s ha os e BMI in SMEs. Focusing on
manage ial ies leads o an explo a ion o why ce ain SMEs can inno-
a e in hei business models and gene a e be e e u ns han hei
i als. Pas BMI esea ch has cen e ed a ound e ficiency and no el y,
ollowing he wo k o Zo and Ami (2007), while igno ing he o ga-
niza ional ac o s o human esou ces ha ei he lead o o acili a e
BMI. This new ocus could help in de eloping o ganiza ional capabili-
ies, consequen ly leading o imp o ed pe o mance (La ifie al.,
2021). BMI in SMEs can be acili a ed h ough access o manage ial
social ies, as i helps fi ms o di e si y om es ablished plans as ma -
ke condi ions change: i.e., i helps o m flexible capabili y (Blyle &
Co , 2003). Fi ms which lack socially-based manage ial ies a e no
connec ed and a e hus unable o u ilize esou ces e ec i ely.
Second, a majo i y o exis ing wo k poin s o a significan ole o
manage ial ies ac oss a ious con ex s, ye mos au ho s ake a e y
na ow iew o manage ial ies as a unidimensional cons uc , ailing
o p o ide a comp ehensi e explana ion o how indi idual dimen-
sions o manage ial ies ope a e (see Table 1). Thi d, his s udy adds
o he wo k on BMI h ough de eloping a p ocess-based in e en ion
explaining how manage ial ies a ec fi m pe o mance h ough BMI
and applying es s. This model enhances knowledge on BMI’s unc-
ions, h ough highligh ing p ocesses by which manage ial ies
achie e supe io pe o mance. Media ion esul s p o ides u he
insigh s on how BMI acili a ed by manage ial ies in SMEs con ib-
u es o highe pe o mance.
Fou h, he s udy con ibu es o esea ch on manage ial ies and
BMI, un il ecen ly iewed as wo dispa a e s eams. The e a e se -
e al media ing and mode a ing ac o s ha augmen he impac o
BMI (Guo e al., 2017), especially including causal ela ionships ha
imp o e decision-making among manage s (Me hlie & Pede sen,
2008). The e o e, he s udy es s en i onmen al u bulence as a ela-
ionship mode a o o he manage ial ies - fi m pe o mance link.
Fi h, despi e he ac ha SMEs accoun o o e 99% o all businesses
wo ldwide, he majo i y o he s udies on BMI ha e concen a ed on
la ge co po a ions (Robu, 2013). Thus, s udying BMI in he con ex o
SMEs is ex emely significan . SMEs ha e unique capabili ies gi en
hei small size and specializa ion in a pa icula sec o o ma ke , as
well as hei each (Bianchi e al., 2010). Th ough BMI, hey can inno-
a e as pe changing en i onmen s o c ea e dynamic capabili ies
and e ficiency (Heide e al., 2021).
The es o his s udy is o ganized in o he ollowing sec ions: a
heo y-based backg ound, as well as hypo hesis de elopmen , a e
co e ed by he second sec ion, while he hi d explains he esea ch
me hods used in his s udy. The pape hen mo es on o he findings
and hei impac s as ela ed o heo y and consequences o manag-
e s, and hen conside s he esea ch limi a ions be o e se ing ou
u he esea ch possibili ies.
Li e a u e e iew
O ganiza ional s uc u es a e o med in esponse o pa icipan s
and es ic ions posed by he ex e nal en i onmen . Ins i u ions a e
“social s uc u es wi h a high deg ee o esilience”(Sco , 2001, P.48),
while ins i u ionalizing o ces c ea e a “social p ocess by which
indi iduals come o accep a sha ed defini ion o social eali y”(Sco ,
1987, p. 496). Ins i u ions can be na u al o enginee ed. They can be
e olu iona y; hey in e ac and adap o p omo e s abili y (Selznick,
1957, p.16). Fo his s udy, ins i u ional heo y is selec ed o de e -
mine he ac ion o manage ial ies owa ds o mula ing business
s a egy (Peng, 2003). The ins i u ional en i onmen plays a pi o al
ole in acili a ing o obs uc ing manage ial ies o ob ain ins i u-
ional suppo (Zhou e al., 2014).
The con ex o SMEs
SMEs a e majo con ibu o s o g ow h in indus ial economies
ac oss he globe in e ms o inno a ion, p oduc ion and employmen
(Memili e al.,2015). In Eu ope, SMEs p o ide employmen o wo-
hi ds o he wo k o ce (Mulle e al.,2018). In China, hey employ
75% o he wo k o ce and con ibu e o 50% o he economy (Ma,
2018). Howe e , hey a e cu en ly acing di ficul ies in a aining a
compe i i e ad an age due o mode niza ion (Rabe ino e al.,2017),
digi iza ion (Holms €
om e al.,2019), big da a echnology (Zhong e
al., 2016), and/o changing go e nmen policies ega ding Indus y
4.0 (Ghadge e al.,2020). Fac o s like digi iza ion and big da a ha e
p o en ad an ageous o la ge fi ms, bu SMEs lack he esou ces o
u ilize hem (M€
ulle , 2019). Mo eo e , hey hi a wall while dealing
wi h supply chains ha a e highly in e connec ed..
Manage ial ies
The heo y o social capi al s a es ha he company’s pe o mance
is de e mined by i s ela ionships (Gabbay & Leende s, 1999). Mana-
ge ial ies ha e been conside ed o include “execu i es’bounda y-
spanning ac i i ies and hei associa ed in e ac ions wi h ex e nal en i-
ies”(Gele kanycz & Hamb ick, 1997, p. 654). The quali y o fi ms’
s a egic decisions depends on manage s’qualifica ions and expe i-
ence (Child, 1997). Li e a u e seg ega es social ies in o business and
poli ical (Peng & Luo, 2000) bu ails o iden i y how hese a e o med.
Business ies signi y manage ial social ies wi h ma ke ac o s ha
help in acqui ing ma ke esou ces. They may include in o mal social
connec ions o clien s, supply chain en i ies and compe i o s (Sheng,
Zhou & Li, 2011;Su & Yang, 2018). Meanwhile, poli ical ies a e in o -
mal social managemen links wi h hose in ol ed in di e en ie s o
go e nmen , including s a e-owned banks and ax o fices (Li & Zhang,
2007;Peng & Luo, 2000). Manage ial ies, including o u he o gani-
za ions, and manage s’in e pe sonal connec ions, a ec o ganiza-
ional ac i i ies (Uzzi, 1997), imp o e pe o mance (Pa k & Luo,
2001), and can p o ide compe i i e ad an age (Tsang, 1998). Mana-
ge ial ies ha e been conside ed key d i e s o fi m inno a ion (Gao
e al., 2008;Wang & Chung, 2013). Such connec ions help o ganiza-
ional inno a ion: by building capabili y (Uzzi, 1997) and skills
(Ahuja, 2000); by g an ing access o in o ma ion and esou ces ha
suppo inno a ion (Ande sson e al., 2002); and by acili a ing lea n-
ing om compe i o s (Shu e al., 2012). Ano he ad an age ha man-
age ial ies p o ide is access o non- edundan esou ces (Wang
e al., 2017). Go e nmen ies assis businesses in gaining access o
sca ce esou ces such as human esou ces, land, subsidies, and capi-
al. In he case o SMEs, in o ma ion asymme y poses a la ge h ea ,
and can be esol ed h ough ne wo ks o in e media ies. The pe -
sonal ies o en ep eneu s and/o senio managemen ha e also
been linked o imp o ed economic pe o mance among SMEs
(Vahlne & Johanson, 2017).
Manage ial ies and BMI
Manage ial ies highligh new and a e oppo uni ies o fi ms and
acili a e in e -uni (Tsai & Ghoshal, 1998) as well as in e -o ganiza-
ional in o ma ion exchanges (Ahuja, 2000). Social ies acili a e flexi-
ble planning and his imp o ed o ganiza ional pe o mance (C aig,
M. Bashi , A. Al alih and S. P adhan Jou nal o Inno a ion & Knowledge 8 (2023) 100329
2
Table 1
Significan s udies on manage ial ies.
Au ho Objec i e Concep ualiza ion o Manage ial Ties Findings
Peng and Luo (2000) Examine he ole o manage ial ies on pe -
o mance in China
Social con ex o manage ial ies in China.
Manage s’mic o in e pe sonal ies wi h
execu i es, and go e nmen o ficials.
Manage ial ies we e necessa y bu insu fi-
cien o pe o mance.
The mic o-mac o link a ied o fi ms wi h
di e en owne ship ypes, business sec-
o s, sizes, and indus y g ow h a es.
Li, Poppo and Zhou (2008) Examine h ee sou ces o he e ogenei y ha
a ec he alue o ies: fi m owne ship
( o eign s. domes ic), compe i ion, and
s uc u al unce ain y in China.
Manage ial ies in o eign fi ms. Though o eign and domes ic fi ms u ilize
ies a a simila le el, pe o mance om
such ies a ies. Compa ed o domes ic
fi ms, o eign fi ms gain compe i i e disad-
an age om ie u iliza ion. Manage ial
ies ha e a low e ec on pe o mance du -
ing in ense compe i ion.
Gao, Xu and Yang (2008) Examine he influence o manage ial ies and
abso p i e capaci y in China, (in fi ms wi h
high le el o o eign di ec in es men , and
local co po a ions.)
Business and uni e si y ies Abso p i e capaci y mode a es he e ec o
manage ial ies on fi ms’inno a i eness.
Business and uni e si y ies ha e opposi e
e ec s.
Zhang and Li (2010) Explo e how manage ial ies and fi m esou -
ces independen ly and simul aneously
a ec fi m pe o mance in China.
Business ies Manage ial ies may be loca ion-bound as
well as non-loca ion-bound.
Manage ial ies and fi m esou ces - inde-
penden ly and in combina ion - imp o e
ma ke pe o mance.
Li and Zhou (2010) To in es iga e how manage ial ies and ma -
ke o ien a ion a ec compe i i e ad an-
age and fi m pe o mance in China.
Manage ial ies Bo h manage ial ies and ma ke o ien a ion
lead o success. Ma ke o ien a ion
imp o es fi m pe o mance h ough di e -
en ia ion and cos ad an ages. Manage ial
ies imp o e pe o mance by helping
secu e sca ce esou ces and ins i u ional
suppo .
Shu, Page, Gao and Jiang (2012) In es iga e indi ec ies and inno a ion in
China.
Two adi ional dimensions o manage ial
ies - business and poli ical
Manage ial ies ha e an indi ec e ec on
fi m inno a ion. Business ies ha e signifi-
can di ec impac on knowledge exchange
and knowledge combina ion. Poli ical ies
only a ec knowledge exchange di ec ly.
The ole o poli ical ies is declining, while
business ies a ec fi m inno a ion.
Ko abe, Jiang, & Mu ay (2011) Using eme ging mul ina ional co po a ions
(MNCs) om China, explo e he e ec s o
manage ial ies wi h go e nmen o ficials
and o eign MNC pa ne s on knowledge
acquisi ion and in es iga e how he
acqui ed knowledge a ec s fi ms’new
p oduc ma ke pe o mance.
Poli ical ies wi h go e nmen o ficials and
business ies wi h o eign MNCs.
Due o ins i u ional oids and poli ical and
cul u al he i age, eme ging MNCs a e
ound o ely on manage ial ies o acqui e
c i ical knowledge acquisi ion.
Wang and Chung (2013) In es iga e he ela ionship be ween ma ke
o ien a ion, manage ial ies and inno a ion
om he Asian pe spec i e.
Manage ial and business ies. Cus ome o ien a ion and in e - unc ional
coo dina ion ha e a posi i e impac on
inno a ion. Manage ial ies mode a e he
ma ke o ien a ion−inno a ion linkage.
Business ies imp o e he ela ion be ween
cus ome o ien a ion and in e - unc ional
coo dina ion and inno a ion.
Business ies and compe i o o ien a ion
ha e a nega i e in e ac ion e ec on inno-
a ion.
Poli ical ies nega i ely a ec he ela ion
be ween in e - unc ional coo dina ion and
inno a ion.
Wang e al. (2017) Analyze how manage ial ies impac fi m BMI
in China.
Manage ial ies, o ganiza ional lea ning
(explo a i e and exploi a i e lea ning).
Manage ial ies impac BMI di ec ly and
indi ec ly.
Jiang e al. (2021) In es iga e he e ec o manage ial ies on
ho els’adop ion o p oac i e en i onmen-
al p ac ices (PEPs) in Chinese ho els.
Poli ical ies Poli ical ies inhibi a ho el’s adop ion o PEPs
whe eas business ies acili a e PEPs.
Nguyen, Nguyen, & Do (2022) In es iga e he e ec s o en ep eneu ial o i-
en a ion, social media, and manage ial ies
on he pe o mance o SMEs in Vie nam.
En ep eneu ial o ien a ion and manage ial
ies.
En ep eneu ial o ien a ion enhances social
media and manage ial ies, which de e -
mine business pe o mance.
Ji & Yi (2022) In es iga e how en e p ises acqui e esea ch
and de elopmen (R&D) capabili ies using
poli ical ies, in China.
Poli ical ies Poli ical ies ha e a posi i e e ec on he
acquisi ion o R&D capabili ies. Dys unc-
ional compe i ion s eng hens he ela-
ionship be ween poli ical ies and
acquisi ion o R&D capabili ies.
Yi., Chen, & Li (2022) Examine how ies wi h s akeholde s a ec
BMI and how he ela ionship is con ingen
upon he fi m’s lea ning ypes.
S akeholde ies The ela ionship be ween in a-indus y
s akeholde ies and BMI is in e ed U-
shaped. Ex a-indus y s akeholde ies
ha e a posi i e e ec on BMI.
M. Bashi , A. Al alih and S. P adhan Jou nal o Inno a ion & Knowledge 8 (2023) 100329
3
Dib ell & Ga e , 2014). O ganiza ions can acqui e esou ces o scale
up (Giesen e al., 2010), o p o ide oppo uni ies o bundling o
unbundling se ices and goods (Heij e al., 2014), and boos e enues
by emb acing new pa ne ing models. Fi ms unde going " undamen-
al and ex ensi e ins i u ional ans o ma ions" equi e s ong mana-
ge ial ela ionships (Peng & Luo, 2000). Manage ial social ies could
acili a e o ganiza ions in di e ging om hei p io s a egy and
inno a ing hei business and business models. Manage ial ies a e
associa ed wi h embeddedness, which helps BMI (Chowdhu y e al.,
2016). Manage ial ies augmen BMI in wo ways (Wang, Guo & Liu,
2017): fi s , h ough o ganiza ional lea ning h ough expe imen a-
ion (Sosna e al., 2010), and second, h ough oppo uni y ecogni ion
(Ami & Zo , 2001;Guo e al.,2017). Acco ding o ins i u ional he-
o y, specialized fi ms wi h specific goals ha e a low chance o being
ins i u ionalized (Sco , 2001). Ins i u ionaliza ion, being a ‘social
p ocess’, equi es suppo ac oss all le els o managemen o achie e
any goal. Taking a cue om ins i u ional heo y, we belie e ha fi ms
going o BMI equi e op managemen suppo . This suppo can be
in he o m o esou ces, capi al, connec ions o access o R&D. Fo
SMEs, ex e nal pa ne s a e complemen a y asse s. They may use
such manage ial ies o gain access o esou ces, in o ma ion, indus-
y associa ions and esea ch o ganisa ions. This helps in imp o ing
p oduc quali y (Kuma & Sub ahmanya, 2010). SMEs also gain access
o academic expe ise and R&D oppo uni ies which will ha e a posi-
i e impac on inno a ion pe o mance o SMEs (Ali e al., 2020). As
such, we in e ha manage ial ies p omo e BMI wi hin fi ms, and
p opose ha :
H
1
:Manage ial ies show posi i e e ec s in acili a ing business
model inno a ions o SMEs.
Manage ial ies and fi m pe o mance
Using ies can posi i ely influence business pe o mance, wi h
consequences a ising om di e en manage ial ela ionships a y-
ing. In compa ison o o he companies, ha ing ies wi h go e nmen
o ficials helps enhance e enues, bo h mone a ily and s a egically
(Peng & Luo, 2000). Fi ms canno ely on go e nmen o acqui e nec-
essa y esou ces (Luo, 2003;Peng & Zhou, 2005), and business ies
in ol e sha ing ope a ional as well as s a egic esou ces. In de elop-
ing na ions, ins i u ional oids including inadequa e in as uc u e,
unsa is ac o y legal sys ems, a lack o financial and human capi al
and a lack o p o ec ion o in ellec ual p ope y hwa he execu ion
o co po a e s a egies (Zhou e al., 2017). Fi ms build on manage ial
ies o o e come such ins i u ional oids, and gain access o sca ce
esou ces (Peng & Luo, 2000;Gu e al., 2008). Bo h business- and
poli ically-based ies ha e hei own dis inc i e ad an ages and oles
in imp o ing fi m pe o mance. Business ies help in esou ce sha ing
and ne wo k legi imacy (Jiang e al., 2021). Resou ce sha ing signifies
acquisi ion o significan ma ke in o ma ion h ough knowledge
sha ing be ween business pa ne s which is exclusi e in na u e
(Sheng e al., 2011). Ne wo k legi imacy is achie ed h ough good
business connec ions, which inc eases he chance o gaining a o -
able ea men (Keis e , 2001). Especially in ma ke s wi h ins i u-
ional oids, manage ial ies de e mine an o ganiza ion’s success. Fo
ins ance, in he absence o legal de elopmen , manage ial social ies
help in gaining compe i i e ad an age as well as imp o ed pe o -
mance (Wei e al., 2017). The ins i u ional heo y p o ides a pe spec-
i e explaining indi idual and collec i e ac ion. Hence, he ollowing
hypo hesis:
H
2
:Manage ial ies exe di ec posi i e e ec s upon fi m pe o -
mance in SMEs.
BMI
Business models (BM) signi y ways in which he fi m “c ea es,
deli e s and cap u es alues”(Teece, 2010), and business model
inno a ion desc ibes any change in a fi m’sBM(Foss & Saebi, 2017).
BMs unc ion by p oducing and cap u ing alue (Zo & Ami , 2012),
by designing cos and e enue s uc u es, and by iden i ying impo -
an esou ces, p ocess and capabili ies (Sha e e al., 2005). BMs
could in ol e he company’s implemen ed s a egy (Casadesus-
Masanell e al., 2011), o a way o app oaching echnology comme -
cializa ion (Chesb ough, 2010). The a e o e olu iona y changes in
echnology, egula ions, cus ome s, and compe i o s poses se ious
challenges o business manage s (La ifie al., 2021). The inc eased
ole o he In e ne in business has made BMs and BMIs mo e signifi-
can ac oss manage s and academicians (Aspa a e al., 2010;Foss &
Saebi, 2017). By gene a ing new e enue s eams and compe i i e
ad an ages, a well-designed BM aids in he c ea ion and deli e y o
alue o e s in esponse o changing consume needs (Teece, 2010).
To su i e and g ow sus ainably, fi ms need o adap o such ex e nal
changes (Vukano i
c, 2016). A fi m mus ein en i s p oduc s, ope a-
ions, ma ke ing echniques, o BMs o achie e his (La ifie al., 2021;
Ha mann e al., 2013). BMI e e s o “concep ualiza ion and adop ion
o new ways o conduc ing economic exchanges”(Zo & Ami , 2007,p.
184). Wang e al. (2017, P.781) define BMI as “ he c ea ion o no el o
ein en ion o exis ing business models by p oposing new alue p oposi-
ion, designing no el alue-c ea ion sys em, o building o iginal alue-
cap u ing mechanisms”. BMI is unde aken o wo easons: ex e nal
and in e nal. Oppo uni ies o compe i ion ( h ea o newcome s,
educing cos s, eplace s (Demil & Lecocq, 2010) a e ex e nal ac o s
linked o BMI (Ghezzi e al., 2015;Teece, 2010). A he in e nal le el,
BMI can be igge ed by he indi idual ai s, decision-making abili-
ies, knowledge base, cogni ion o manage s (Demil & Lecocq, 2010;
Sosna e al., 2010), as well as by o ganiza ional ac o s such as flexible
s a egies (Bock e al., 2012;Ghezzi e al., 2015) and o ganiza ional
lea ning (Sosna e al., 2010).
BMI & fi m pe o mance
BMI con ibu es o p oducing alue and compe i i e ad an age, as
well as imp o ed business pe o mance (Heikkil€
a e al., 2018;Ka imi
& Wal e , 2016;Lambe & Da idson, 2013). Fi ms ha wan o
imp o e hei pe o mance (Bock e al., 2012); g ow (Te enghi e al.,
2017); o de elop compe i i e ad an age (A uah, 2000) need o inno-
a e in e ms o BMs. BMs also p o ide inno a ion (Zo e al., 2011).
BMI in fi ms like Dell, Wal-Ma , Ube , Sou hwes Ai lines and Ola
has been p o en o imp o e pe o mance. Howe e , he e a e ins an-
ces whe e BMIs ha e ailed due o imp ope handling by manage s
(Chesb ough, 2010;Ch is ensen e al., 2016;Knab & Roh beck, 2014).
Knowing when o inno a e is he e o e pe inen o manage s (Ha -
mann e al., 2013). I is only by ocusing on e ficiency ha BMI leads
o inc eased pe o mance (Heikkil€
a e al., 2018;Zo & Ami , 2007).
This can be done h ough e ec i e u iliza ion o exis ing esou ces;
educing p oduc ion cos s (e.g., h ough ou sou cing, alliances e c.)
(Chesb ough, 2007); and educing in en o y cos s (Wei e al., 2017).
Fo ICT-d i en BMI, e ficiencies occu by educing ansac ion cos s
wi h inside s and ou side s (Ladib & Lakhal, 2015). By educing ope -
a ional cos s, fi ms can pass such benefi s o cus ome s and imp o e
pe o mance. Thus, i is hypo hesized ha :
H
3
:BMI di ec ly posi i ely a ec s he SME pe o mance.
BMI as a media o o he ela ion be ween manage ial ies and fi m
pe o mance
Li e a u e e eals ha manage ial ies imp o e pe o mance (Wei
e al., 2017;Danso e al., 2016). The social capi al gained in de elop-
ing social ne wo ks and ies enhances a fi m’s compe i i e ad an age
and pe o mance (Bu , 1997;Peng & Luo, 2000). BMI also has an
es ablished ole in imp o ing pe o mance by p o iding alue
(Hacklin e al.,2018), h ough e ficien esou ce u iliza ion (B aganza
e al., 2017), and esea ch and de elopmen (Bigdeli e al.,2016;
M. Bashi , A. Al alih and S. P adhan Jou nal o Inno a ion & Knowledge 8 (2023) 100329
4
Co imiglia e al.,2015). The fi m mus u ilize mo e esou ces o
achie e BMI compa ed o hose equi ed o inno a e i s p oduc s and
p ocesses (Teece, 2018). An indi idual fi m may lack access o such
esou ces o BMI. In SMEs, BMI educes he in o ma ion asymme y
be ween cus ome s (Singh & Si deshmukh, 2000) and supplie s
(Gau e al.,2011). Inno a ion in alue p oposi ions makes ma ke ing
channels mo e e ec i e h ough open communica ion (Doz & Koso-
nen, 2010), and educes ansac ion cos s (Zo & Ami , 2007). BMIs
in SMEs he e o e help in be e in o ma ion sha ing and being mo e
esponsi e o changing cus ome needs (Baden-Fulle & Haeflige ,
2013). Manage ial ies can assis in accessing low-a ailabili y esou -
ces as well as in o ma ion wi h which o inno a e, which in u n
helps in imp o ing pe o mance (Li e al.,2013;Zhang & Li, 2010).
This s udy a gues ha manage ial ies a ec pe o mance bo h
di ec ly, and indi ec ly (by augmen ing BMI, which u he leads o
imp o ed fi m pe o mance). The unde lying p emise o his a gu-
men is ha SMEs ace high le els o in o ma ion asymme y, lack
esou ces and ha e a low esea ch and de elopmen p opensi y,
which can be esol ed h ough ne wo ks. Thus, he p esence o man-
age ial ies may be a acili a o o BMI. Based on hese p emises, i is
p oposed ha :
H
4
: BMI is a posi i e media o o he ela ion be ween manage ial
ies and o ganiza ional pe o mance.
En i onmen al u bulence
Technological and ma ke u bulence ha e bo h been examined in
ela ion o en i onmen al u bulence (Eisenha d & Ma in, 2000;
Teece, 2007). The a e o echnological de elopmen is e e ed o as
echnological u bulence, while ma ke u bulence ela es o a ia-
ions in clien as es and demand (Jawo ski & Kohli, 1993). A u bu-
len en i onmen leads o compe ency aps (Zah a & Geo ge, 2002),
dis up ion in syne gies, and o ganiza ional ine ia (Leona d-Ba on,
1992). Du ing u bulence, being adap able o en i onmen al change
helps in c ea ing compe i i e ad an age (Ka kalo e al., 2010). In cu -
en ma ke condi ions, whe e cus ome p e e ences keep a ying,
any knowledge possessed by a fi m ends o become obsole e (Song
e al., 2005). This a ia ion in cus ome p e e ence and demand is
e e ed o as ‘ma ke u bulence’(Jawo ski & Kohli, 1993). To sus ain
compe i i eness amids such u bulen ma ke s, fi ms need o
espond quickly o changes. Flexibili y and access o sca ce in o ma-
ion is a p ecu so o success du ing such ma ke u bulence
(DeSa bo e al., 2005), which can only be gained h ough manage ial
ies. Any business ies (comp ising connec ions o supplie s, cus om-
e s and collabo a o s) and poli ical ies ( ela ionship wi h go e n-
men o ficials) compensa e o in o ma ion gaps.
En i onmen al u bulence as a mode a o o manage ial ies - fi m
pe o mance ela ionship
“The g ea e he ask unce ain y, he g ea e he amoun o in o -
ma ion ha mus be p ocessed among decision make s du ing ask
execu ion in o de o achie e a gi en le el o pe o mance”(Gal-
b ai h, 1973, p. 4). Indus ies o en a e ypified by hei ins abili y
(Calan one e al., 2003), gi en changes in p oduc s, echnologies and
ins i u ions.. These ac o s ha e been concep ualized as ma ke u -
bulence, echnological u bulence and egula o y u bulence espec-
i ely (Calan one e al., 2003). These u bulences can enhance as well
as des oy compe ences in o ganiza ions. F equen changes in egula-
ions, compe i i e beha io , business p ac ices e c. make i e y di fi-
cul o manage s o p ocess in o ma ion and ake decisions.
Ins i u ional heo y can be used o comp ehend hese unce ain ies,
as ins i u ional dynamics and isks ha e a c ucial ole in he en i e
p ocess. Ins i u ions play a huge pa in suppo ing and influencing
ma ke mechanisms, asce aining cos s and designing s a egies and
in es men s (Meye e al., 2009). In o ma ion p ocessing needs
become mo e in ense in u bulen en i onmen s, gi en change in ci -
cums ances, cus ome demands and p e e ences. These changes
equi e s a egic and s uc u al modifica ions (Galb ai h, 1973).
When an en i onmen becomes mo e u bulen , manage ial espon-
sibili ies become mo e a ied and agmen ed (Min zbe g, 1973). As
an en i onmen g ows mo e complex, a manage ’s ole becomes c u-
cial. Quali y o manage ial social ies a ec s pe o mance, bu he
ela ionship may be a ec ed by changing cus ome , echnological o
egula o y changes. En i onmen al u bulence may a ec he ole o
manage ial ies on pe o mance. In ui i ely, we posi ha :
H
5
:En i onmen al u bulence nega i ely mode a es ela ionships
linking manage ial ies wi h fi m pe o mance.
Resea ch me hods
Sampling
Da a we e collec ed om SMEs loca ed in Saudi A abia, o se e al
easons. A epo by he Digi al T ans o ma ion P og am e ealed ha
99.5% o he companies in Saudi A abia a e SMEs and accoun o nea ly
60% o g oss domes ic p oduc (GDP) and 80% o he wo k o ce in he
Gul egion (PWC, 2016). Second, he ambi ious Saudi Vision 2030 aims
o aise he con ibu ion o SMEs o GDP om 20% o 35% (Saudi Vision
2030). Addi ionally, he Vision 2030 p o ided a huge impe us o g ow h
in he numbe o SMEs in Saudi A abia. The e was a 68% g ow h in he
numbe o SMEs in he fi s qua e o 2022, eaching a o al o 752,500.
The e is huge go e nmen suppo o SMEs, which helps o inc ease
hei con ibu ion o he g oss domes ic p oduc (GDP). I has become
easie o SMEs o en e local ma ke s, especially wi h he es ablishmen
o he Small and Medium En e p ises Gene al Au ho i y (Monshaa ).
SMEs in Saudi A abia do no need o pay any comme ce ees o he fi s
h ee yea s (in o de o encou age s a -ups). In a significan mo e,
Saudi A abia’s Social De elopmen Bank alloca ed SAR 9 billion (USD 2.4
billion) as aid o SMEs
1
o und 6000 businesses. All hese measu es
ocus on inc easing he con ibu ion o SMEs o he de elopmen o he
coun y’seconomy.
The e o e, hese ac o s signi y an app op ia e esea ch con ex . a
c oss-indus y sample was used o maximize scope o gene aliza ion
o findings (Ka sikea e al., 2011(. Da a-ga he ing ac i i ies las ed o
wo mon hs, om No embe −Decembe 2021. The sample was
aken in wo s ages, beginning wi h s a ified sampling, which iden i-
fied dis inc se ice and manu ac u ing businesses. Nex , fi ms wi hin
he manu ac u ing and se ice sec o we e selec ed based on sam-
pling con enience. F om he 800 ques ionnai es sen ou , 290 we e
ecei ed in e u n, cons i u ing a 36.25% esponse a e. 10 ques ion-
nai es we e ejec ed since o e 10% o answe s we e incomple e
(Hai e al., 2010), lea ing 280 usable comple ed ques ionnai es.
The s udy ec ui ed only esponden s who we e in ol ed in a com-
pany’s s a egic o ien a ion. The sample consis ed o 34.6% om op
managemen and 65.3% om middle managemen , in line wi h o he
s udies on BMI (Clauss, 2017). 67.5% o he SMEs we e om he
manu ac u ing sec o and 32.5% we e se ice-based. Rega ding fi m
age, 37.5% o fi ms we e up o 10 yea s old, 27.8% 11−20 yea s old,
23.9% 21−30 yea s old and 10.7% 31−40 yea s old. Mo eo e , 60% o he
SMEs selec ed had been in business o mo e han 10 yea s, and 40% o
mo e han 20 yea s. 86.7% o he SMEs selec ed had local ma ke o ien-
a ion, 8.9% global and 4.2% egional. Owne ship s uc u e consis ed o
90.7% p i a e, 2.14% go e nmen and 7.14% mixed owne ship (Table 2).
Measu emen s
A ho ough li e a u e e iew was conduc ed o gene a e i ems o
all la en a iables in o de o in es iga e he associa ion be ween
1
h ps://www.ma mo emena.com/en/insigh s/saudi-a abia-eases- egula ion- o-
suppo -smes-and-en ep eneu s/
5
M. Bashi , A. Al alih and S. P adhan Jou nal o Inno a ion & Knowledge 8 (2023) 100329
managemen ies and SME pe o mance, wi h en i onmen al u bu-
lence as a mode a o , and BMI as a media ing influence on his link-
age. Mul i-i em eflec i e scales we e used o ensu e consis ency in
measu ing cons uc s (Chu chill, 1979). All cons uc s we e based on
p e ious wo k examining manage ial ies, BMI, en i onmen al u bu-
lence and SME pe o mance. Table 3 highligh s he findings o C on-
bach’s alpha, CR and AVE om each cons uc .
Manage ial Ties: Taking a cue om seminal wo ks by Peng and Luo
(2000), manage ial links o managemen in di e en companies, and
links o go e nmen o fice s we e assessed ia a 3-i em scale. Ties
wi h uni e si ies we e measu ed using a h ee-i em scale ollowing
Ramos-Vielba e al. (2010), and Naqshbandi and Kau (2014).Afi e-
poin Like scale was applied o cap u e esponses, se be ween
“ e y li le”and “ e y ex ensi e”.
BMI: A 9-i em scale measu ing BMI was adop ed om Spie h and
Schneide (2016). A sample i em is “The p oduc and se ice o e ing
has changed”. Pa icipan s we e ques ioned on how a aspec s o
BMI had al e ed o e he p eceding h ee yea s (1 = no a all;
5 = comple ely).
En i onmen al Tu bulence: A ou -i em scale was used, ollowing
Jawo ski and Kohli (1993). This included o example: “The ac ions o
compe i o s in majo ma ke s we e changing qui e apidly”.
SME Pe o mance: This was measu ed in compa ison wi h di ec ly
compe ing fi ms using a fi e-i em scale based on ha o Venka a-
man and Ramanujam (1986). Compa isons we e made wi h compe i-
o s on financial pe o mance, ise in sales, sha e o he ma ke ,
p oduc de elopmen , and o ganiza ional de elopmen . A sample
i em is “Rela i e o ou compe i o s ou financial pe o mance was
much be e ”. Each i em was assessed ia a Like scale wi h
esponses be ween “ex emely declined”and “ex emely imp o ed”.
Con ol Va iables: P e ious s udies ha e highligh ed ha business
age, indus y, owne ship and ma ke o ien a ion can a ec BMI (Guo,
Zhao & Tang, 2013). Fi m age was ca ego ized as less han 10 yea s,
11−20, 21−30, and 31−40 o o e (Adomako, Na eh, Danquah &
Analoui, 2016). Indus y ype was measu ed in e ms o manu ac u -
ing and se ice o ganiza ions (Adomako e al., 2016). Simila ly, own-
e ship was measu ed in e ms o s a e owned, p i a ely owned and
o eign con olled fi ms (He & Wei, 2011). Measu emen o ma ke
o ien a ion ollowed ha o Vo hies and Mo gan (2005). Howe e ,
he esul s did no iden i y significan a ia ions o pa h coe ficien s
a e he in oduc ion o con ols. The e o e, none o con ols men-
ioned abo e we e used o he u he analysis.
Non- esponse and common me hod bias
To ule ou non- esponse bias, a T- es was used. Compa isons
we e made wi h he ini ial and final 40 esponses, wi h findings no
changing significan ly ac oss he g oups (p>0.05), sugges ing an
absence o non- esponse bias in he da a. Common me hod bias was
es ed o using explo a o y ac o analysis (EFA). All i ems we e sub-
jec ed o EFA, and he numbe o ac o s was limi ed o one. The un-
o a ed ac o e ealed ha he single ac o ob ained was explana-
o y o less han 50% o a ia ion, sugges ing ha he e was no com-
mon me hod bias (Pa k & Ghau i, 2011;Podsako & O gan, 1986).
Resul s
Measu emen model
We accessed he measu emen model by checking he con e gen
alidi y, composi e eliabili y (CR), C onbach’s alpha and AVE (a e -
age a iance ex ac ed). Table 3 highligh s C onbach’s alpha alues as
exceeding 0.7, which sugges s cons uc s a e eliable (Nunnally,
1978). The composi e eliabili y alues abo e he minimum bounda y
c i e ion o 0.7 (Chin, 1998). The AVE was also g ea e han he 0.50
pe missible bounda y, sugges ing e idence o con e gen alidi y
(Hai e al., 2010). Fu he mo e, his sugges s ha indica o s we e
explana o y o he la en cons uc (Hai e al., 2006).
Nex , disc iminan alidi y was accessed using wo me hods. As
seen in Table 4, he squa e oo o each cons ’c ’s AVE (diagonal al-
ues) is g ea e han he associa ed co ela ion coe ficien alues,
implying e idence o disc iminan alidi y as se ou by Fo nell and
La cke (1981). Howe e , ecen ly, his me hod o accessing disc im-
inan alidi y has been c i icized, as i does o e eliable iden ifica-
ion o he absence o disc iminan alidi y ac oss equen ly- ound
esea ch condi ions (Hensele , Ringle & Sa s ed , 2015). Thus, o
enhance obus ness in he measu es used, his s udy also employed
ano he me hod de i ed om he mul i- ai -mul i-me hod ma ix
o disc iminan alidi y assessmen : a he e o ai -mono ai (HTMT)
co ela ion a io (Hensele e al., 2015). Wi h a h eshold o 0.85,
esea che s belie e HTMT o be supe io o he classic echnique
(Hensele e al., 2015). Da a in Table 5 sugges s ha he HTMT alues
Table 2
Sample demog aphics.
Posi ion F equency Pe cen age
Top Manage 97 34.6
Middle Manage 183 65.3
Manu ac u ing SMEs 189 67.5
Se ice-based SMEs 91 32.5
No. o Employees
5−50 40 14.2
51−100 52 18.5
101−150 102 36.4
151−200 63 22.5
200−249 23 8.2
Fi m Age
1−10 Yea s 105 37.5
11−20 Yea s 78 27.8
21−30 Yea s 67 23.9
31−40 30 10.7
Ma ke O ien a ion
Local 243 86.7
Regional 12 4.2
Global 25 8.9
Owne ship S uc u e
P i a e Sec o 254 90.7
Go e nmen Sec o 6 2.14
Mixed Owne ship 20 7.14
Table 3
C onbach’s Alpha, Composi e Reliabili y (CR) and A e age Va iance Ex ac ed (AVE).
C onbach’s Alpha Composi e Reliabili y A e age Va iance Ex ac ed
(AVE)
BMI 0.873 0.898 0.696
ET 0.694 0.798 0.506
FP 0.865 0.901 0.646
MT 0.815 0.86 0.613
TGO 0.734 0.849 0.653
TWM 0.719 0.842 0.641
TWU 0.745 0.857 0.669
Table 4
Disc iminan alidi y.
BMI ET FP MT TGO TWM TWU
BMI 0.834
ET 0.263 0.711
FP 0.434 0.268 0.804
MT 0.396 0.164 0.409 0.782
TGO 0.28 0.097 0.294 0.872 0.808
TWM 0.41 0.299 0.387 0.628 0.328 0.800
TWU 0.28 0.037 0.315 0.864 0.68 0.302 0.818
6
M. Bashi , A. Al alih and S. P adhan Jou nal o Inno a ion & Knowledge 8 (2023) 100329
o each cons uc pai a e below he 0.85 pa ame e se , sugges ing
ha disc iminan alidi y is sa isfied (Hensele e al., 2015).
S uc u al model
Be o e hypo hesis es ing, s anda dized oo mean squa e (SRMR)
esidual alue was measu ed as 0.045, poin ing o sa is ac o y fi
adjus men . In o de o iden i y any mul i-collinea i y among he
cons uc s, a iance infla ion ac o (VIF) was calcula ed, and iden i-
fied as lowe han 0.50, sugges ing a lack o mul i-collinea i y (Hai ,
Ringle & Sa s ed , 2012). Nex , boo s apping p ocedu e was used
wi h 5000 samples, es ing pa h alues (Ringle e al., 2015). Fo PLS-
SEM, o de e mine he model’s explana o y powe , R
2
alues we e
applied o all endogenous cons uc s, because his echnique canno
p oduce classic index ypes o model fi as do co a iance-de i ed
SEM app oaches (Wasko & Fa aj, 2005). The e o e, o e all goodness
o fi (GOF) was applied o model assessmen (Tenenhaus e al.,
2005), whe eby geome ic means we e calcula ed o a e age com-
munali y: mo eo e , a e aged R
2
(endogenous cons uc s) was aken
o calcula e GOF. The p ocess o his is highligh ed in Table 6. The
esul , a 0.370, sugges s a sa is ac o y fi (Ho mann & Bi nb ich,
2012). A e es ing he equi emen s o model alidi y measu es,
hypo heses o ela ionships we e hen assessed.
The fi s hypo hesis p edic ed ha manage ial ies would ela e
posi i ely o BMI, and esul s confi med his, wi h significan le els
o impac (b=0.396, = 6.837, p alue= 0.00). Hypo hesis 2 p edic ed
ha manage ial ies would ela e posi i ely o o ganiza ional pe o -
mance. Resul s shown in Table 7 again confi m his hypo hesis, a a
le el o s a is ical significance (b=0.139, = 2.6, p alue= 0.009).
Hypo hesis 3 p edic ed ha BMI would ela e posi i ely o SME pe -
o mance, and his was also confi med wi h s a is ical significance
ound o his influence (b=0.28, = 3.696, p alue= 0.00).
Media ion analysis
To e alua e he media ing e ec , T-s a is ics, es ima es and 95%
bias-co ec ed confidence in e als we e used o conside o al and
indi ec impac s (Zhao, Lynch & Chen, 2010). Whe e bias-co ec ed
confidence in e als de ia e om ze o, media ion is significan
(Hayes & Scha kow, 2013;Zhao e al., 2010). Findings poin o a sig-
nifican and posi i e indi ec e ec linking manage ial ies wi h SME
pe o mance (b=0.111, T-s a is ic=3.49). As well as a posi i e, signifi-
can o al e ec o manage ial ies and SME pe o mance (b=0.374, T-
s a is ic=6.16) (Table 8). The e o e, i is concluded ha BMI media es
he manage ial ies - SME pe o mance link.
Mode a ion analysis
Resea ch sugges s ha PLS gi es mo e accu a e es ima es o
mode a ion, because i accoun s o e o s ha a enua e he es i-
ma es o ela ionships and he eby imp o es he abili y o alida e
heo y (Hensele & Fasso , 2010). Tes ing o mode a ing e ec s om
en i onmen al u bulence was ca ied ou by mul iplying p edic o
by mode a o , p oducing an in e ac ion cons uc (Manage ial ies x
En i onmen al u bulence). The esul s highligh ha he pa h coe fi-
cien s o he mode a o o SME pe o mance we e insignifican
(b=0.042, T= 0.815, p= 0.415). The e o e, i is concluded ha en i-
onmen al u bulence has no mode a ing e ec on in e ac ions link-
ing manage ial ies and SME pe o mance.
Discussion
This s udy looked in o he di ec and indi ec e ec s o manage ial
links on SME pe o mance. We also looked in o he unde lying p o-
cesses o hese ela ionships by looking a he media ing ole o BMI,
which is a esh addi ion. Ins i u ional heo y also ecognizes he pi -
o al ole o ins i u ional en i onmen in acili a ing o obs uc ing
manage ial ies o ob ain ins i u ional suppo (Zhou e al., 2014).
Howe e , ecen esea ch has shown ha fi ms which ocus on BMI
ou pe o m companies which ocus on p oduc and p ocess inno a-
ion (Ami &; Zo , 2012;Bashi , Naqshbandi, &; Fa ooq, 2020). The e-
o e, his s udy accessed he p oposed model empi ically o shed ligh
on he links be ween manage ial ies, BMI, SME pe o mance and
en i onmen al u bulence. Findings om he PLS-SEM analysis
appea in Fig. 1.
The fi s hypo hesis p edic ed a posi i ely-o ien ed manage ial
ies −BMI associa ion, and his was suppo ed, meaning ha SMEs
whose manage s ha e be e ies may be able o inno a e hei mod-
els o cap u e new oppo uni ies in he ma ke . These findings a e
consis en wi h pas esea ch (i.e. Wang, Guo & Liu, 2017)finding an
impac om manage ial ies on oppo uni y ecogni ion. The a ail-
abili y o manage ial social ies migh acili a e o ganiza ional di e -
gence om p e iously-se planning and inno a ion in business
Table 5
HTMT.
BMI ET FP MT TGO TWM TWU
BMI
ET 0.321
FP 0.474 0.296
MT 0.475 0.279 0.483
TGO 0.335 0.134 0.358 0.841
TWM 0.522 0.408 0.464 0.888 0.436
TWU 0.328 0.157 0.381 .0711 0.805 0.399
Table 6
Goodness o fi index.
Va iables AVE R
2
BMI 0.696 0.156
ET 0.506
FP 0.646 .278
MT 0.613
TGO 0.653
TWM 0.64
TWU 0.669
A e age Sco e .632 .217
A e age o AVE x R
2
.137
xA e age o AVE x R
2
.370
Table 7
Hypo hesis es ing.
Pa hs Be a T S a is ics P Values Decision
MT ->FP 0.263 3.923 0 Suppo ed
MT ->BMI 0.396 6.837 0 Suppo ed
BMI ->FP 0.281 3.696 0 Suppo ed
Table 8
Media ion analysis.
Pa ame e S anda dized coe ficien s T Value p- alue
S uc u al Model
Di ec e ec s
MT!BMI .396 6.837 0.0
BMI!FP .281 3.696 0.0
MT!FP .263 3.923
Indi ec E ec
MT!BMI!FP .111 3.49 .001
To al E ec (Indi ec + di ec
e ec s)
MT!FP .374 6.16 0.0
Mode a ing E ec 1 ->FP 0.042 0.815 0.415
No e: p<0.005; **Insignifican , * Sig a 5% Le el.
M. Bashi , A. Al alih and S. P adhan Jou nal o Inno a ion & Knowledge 8 (2023) 100329
7
models. Manage ial ies help in BMI, due o hei embeddedness
(Chowdhu y e al., 2016). Ties wi h manage s, uni e si ies and go -
e nmen o ficials, pa icula ly in eme ging ma ke s, can enable fi ms
o de elop dynamic capabili ies h ough he acquisi ion o a e
esou ces like human esou ces, land, subsidies, unding e c.
Second hypo hesis sugges ed posi i e e ec s o SME pe o -
mance exe ed by manage ial ies, and suppo was ound o he
hypo hesis, sugges ing ha SME manage s wi h ies o ou side en i-
ies (including indi iduals in di e en o ganiza ions, go e nmen
ins i u ions and uni e si y se ings) can help sou ce new knowledge,
he eby enhancing SME pe o mance. These findings suppo hose
o ea lie esea ch sugges ing an impac om manage ial ies o be -
e pe o mance (Jiang e al., 2021;Wei, Song & Wang, 2017). Espe-
cially in ma ke s wi h ins i u ional oids, manage ial ies de e mine
an o ganiza ion’s success. Fo ins ance, in he absence o legal de el-
opmen , manage ial social ies help o gain compe i i e ad an age,
enhancing pe o mance (Wei e al., 2017).
The hi d hypo hesis p edic ed posi i ely- el impac s om BMI
o he pe o mance o SMEs. This s udy’sfindings suppo his, sug-
ges ing ha SMEs which ocus mo e on BMI ha e be e pe o mance.
P e ious s udies ocused on la ge co po a ions and lis ed companies.
BMI can help fi ms o: u ilize exis ing esou ces; educe p oduc ion
cos s (e.g. h ough ou sou cing, alliances e c.) (Chesb ough, 2007);
and educe in en o y cos s (Wei e al., 2017). I is sugges ed he e ha
BMI can also help fi ms econfigu e single o mul iple business model
componen s wi h changes in ex e nal condi ions (Chesb ough, 2010;
Sosna e al., 2010). The cu en esea ch o e s esh insigh s on BMI
o SMEs. This se ing is pa icula ly impo an in eme ging econo-
mies, and in pa icula o he Gul egion, as SMEs a e he p i a e
sec o ’s ounda ion in he Gul , esponsible o 90% o o e all com-
me cial ac i i y (Re ab & Azzam, 2011).
Fou h, i was posi ed ha BMI would media e ela ions linking
manage ial ies wi h SME pe o mance. The findings suppo ed his,
sugges ing ha BMI p o ides a mechanism o link manage ial ies
wi h o ganiza ional pe o mance. These findings confi m he wo k o
Wang e al. (2017). Thus, he s udy sugges s ha manage s who ha e
s ong ies wi h buye s, supplie s, uni e si ies and e en compe i o s
p omo e BMI. Howe e , he ole o ies becomes especially significan
o Saudi A abia, wi h i s di e en cul u al and ins i u ional se ing
compa ed wi h o he coun ies. This is because egimes o app op i-
abili y a e weake o de eloping na ions as opposed o de eloped
ones (Naqshbandi & Kau , 2011). The s udy adds o ea lie esea ch
by demons a ing ha managemen links alone may no be su ficien
o boos SME pe o mance unless hey a e channelized h ough BMI,
which imp o es SME pe o mance.
The cu en wo k was unable o find e idence o he hypo he-
sized con ibu ion o en i onmen al u bulence as a mode a o o he
ela ionship linking manage ial ies and SME pe o mance. P e ious
s udies ha e highligh ed ha in o ma ion p ocessing needs become
mo e in ense in u bulen en i onmen s, gi en change in ci cums an-
ces, cus ome demands and p e e ences. These changes equi e s a-
egic and s uc u al modifica ions (Galb ai h, 1973). I was no
possible o compa e his finding o o he s udies because he e a e no
s udies specifically examining a mode a ing influence om en i on-
men al ins abili y o links be ween managemen ela ionships and
SME pe o mance. Howe e , we an ex a sub-g oup analysis o
in es iga e his u he . I is in e es ing o no e ha we only disco -
e ed ha en i onmen al u bulence has an e ec in he high echnol-
ogy sub-sample. This seems easonable, gi en ha high- echnology
businesses need o be ex emely inno a i e, which p omo es p oduc
and p ocess de elopmen and esea ch, as well as echnical expe ise
and indus y knowledge (Lumpkin & Dess, 1996). This knowledge
helps businesses con inuously in oduce new, echnologically
ad anced p oduc s mean o mee apidly changing cus ome needs
and he eby imp o e pe o mance. The mode a ing e ec o en i on-
men al u bulence may hus depend on he ype o indus y, as his
addi ional sub-g oup analysis seems o emphasize. P e ious s udies
in he con ex o inno a ion ha e highligh ed ha he deg ee o en i-
onmen al u bulence is di e en ac oss indus ies (Tsai & Yang,
2014).
Fig. 1. S uc u al model.
M. Bashi , A. Al alih and S. P adhan Jou nal o Inno a ion & Knowledge 8 (2023) 100329
8
