Does resource orchestration theory ensure the better SME performance: A three-wave time lag investigation among manufacturing SMEs of the developing economies

Abstract

In the contemporary business landscape, changes in business practices, including technological advancements, increasing competition, and rapidly changing customer preferences, pose challenges for SMEs to survive. These rapid changes stressed that SMEs change and adopt strategies to mitigate the declining performance. Therefore, this study aims to examine the influence of financial capital availability (FCA) and entrepreneurial competencies (EC) to predict SMEs' performance with the intervention of strategic change (SC). The study used Resource Orchestration Theory (ROT) as an underpinning theory. Based on the quantitative research design, the research collected data through a three-wave time lag investigation among manufacturing SMEs from various cities of two provinces of Pakistan, namely Punjab and Sindh provinces. The research used SPSS 21 and Smart PLS 4 to analyze 203 usable responses from the manufacturing SMEs. The findings show that FCA and EC significantly influence the SMEs' performance. Further, SC also significantly mediated the relationship of FCA and EC with SMEs' performance. This study underscores the consideration of key FCA, EC, and SC strategies to improve SMEs' performance among emerging countries. Further, this study extends the theoretical knowledge while utilizing ROT as a more nuanced perspective among the complex relationships of this study's variables. This study outlines practical implications that are critical determinants for improving SMEs' performance.