How do emerging market SMEs utilize resources in the face of environmental uncertainty?

Abstract

Using the resource-based view of the firm, this article examines how different resources are used by small- and medium-sized enterprises (SMEs) in response to environmental uncertainty in an emerging market context. A survey was conducted involving 212 owners, CEOs, or managing directors of SMEs in the United Arab Emirates (UAE) to explore the drivers of firm growth strategies. Our empirical results show that higher environmental uncertainty, in terms of market and regulatory uncertainty, drives SMEs to pursue a more exploratory instead of an exploitative growth strategy. Our results also show that SMEs pursuing more of an exploratory growth strategy focus predominantly on intangible resources such as human capital and social capital while firms pursuing more of an exploitative growth strategy focus more on financial resources. The results from our study provide valuable insights for how managers can structure, bundle, and leverage different resources for developing their strategies based on their level of perceived environmental uncertainty. The policy implications from our study are that support for SMEs should be multi-faceted depending on the combination of uncertainty faced and type of strategy chosen by SMEs. JEL CLASSIFICATION: M10; M19; M13

Publication DOI: https://doi.org/10.1177/2340944420929706
Divisions: College of Business and Social Sciences > Aston Business School > Economics, Finance & Entrepreneurship
College of Business and Social Sciences > Aston Business School > Centre for Personal Financial Wellbeing
College of Business and Social Sciences > Aston Business School
Additional Information: This article is distributed under the terms of the Creative Commons Attribution-NonCommercial 4.0 License (https://creativecommons.org/licenses/by-nc/4.0/) which permits non-commercial use, reproduction and distribution of the work without further permission provided the original work is attributed as specified on the SAGE and Open Access pages (https://us.sagepub.com/en-us/nam/open-access-at-sage).
Uncontrolled Keywords: Economics and Econometrics,General Business, Management and Accounting,Business and International Management,Strategy and Management
Publication ISSN: 2340-9444
Last Modified: 22 Apr 2024 07:31
Date Deposited: 06 Jun 2022 09:06
Full Text Link:
Related URLs: https://journal ... 340944420929706 (Publisher URL)
PURE Output Type: Article
Published Date: 2020-07-29
Published Online Date: 2020-07-29
Accepted Date: 2020-07-01
Authors: Temouri, Yama (ORCID Profile 0000-0003-3014-258X)
Shen, Kathy
Pereira, Vijay
Xie, Xuanli

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