The Impact of Organizational Dynamic Capabilities on Competitive Advantage and Its Effect on Organizational Performance
Keywords:
Dynamic capabilities, Competitive advantage, Organizational performanceAbstract
This research investigates the role of dynamic capabilities in achieving competitive advantage and enhancing organizational performance within technology-based SMEs. Specifically, it examines 1) the direct impact of organizational dynamic capabilities on competitive advantage, 2) the mediating role of competitive advantage in the relationship between dynamic capabilities and performance, and 3) the influence of developing and reconfiguring dynamic capabilities on organizational performance in dynamic markets. The study utilized a structured questionnaire, distributed electronically to a sample of 400 SMEs of managerial-level employees from small and medium-sized enterprises (SMEs) in a technology industry, strategically selected through stratified random sampling to ensure representation across diverse business contexts within the technology sector. The questionnaire comprised sections measuring adaptability, innovation, resource management, competitive strategies, and performance indicators, employing a 5-point Likert scale for responses. Regression analysis was conducted to validate the hypothesized relationships among variables. The findings demonstrate a significant positive relationship between dynamic capabilities and competitive advantage, showing that organizations with heightened adaptability, innovation, and efficient resource management excel in achieving cost leadership, differentiation, and market responsiveness. Furthermore, competitive advantage serves as a crucial mediating factor, enabling dynamic capabilities to indirectly impact organizational performance by fostering a competitive edge. Continual development and reconfiguration of these capabilities were found to positively influence performance, as evidenced by increased market share, innovation outcomes, and financial success. This study bridges a critical gap in the academic literature by providing empirical evidence of the strategic importance of dynamic capabilities in SMEs and their role in achieving competitive advantage and superior performance. The findings offer actionable insights for SME leaders, emphasizing the importance of cultivating dynamic capabilities to navigate rapidly evolving, technology-driven markets effectively. These contributions enhance the understanding of dynamic capabilities' strategic potential, serving as a valuable resource for both researchers and practitioners.
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