Top management team managerial discretion, strategic flexibility, and firm growth performance: Evidence from China's listed small and medium-sized enterprises

Under settings of China's economic transition period, strategic flexibility is the crucial capability to allow the Chinese small and medium-sized enterprises (SMEs) to proact or respond timely and effectively to quickly changing conditions. Starting from the perspective of top management team (TMT) and its members' leadership sources, this paper explored the impact of TMT managerial discretion on strategic flexibility of SMEs, based on the resource based view. Using the sample of 165 China's listed SMEs, the empirical research identified TMT managerial discretion derived from task environment and TMT managerial discretion derived from organization as key influential factors of strategic flexibility of SMEs. However, the impact of TMT managerial discretion derived from team power-base on strategic flexibility of SMEs was not significant. The empirical results also revealed that strategic flexibility has positive effect on firm growth performance of SMEs.