STRATEGIC FLEXIBILITY, ENVIRONMENTAL DYNAMISM, AND SME INTERNATIONALIZATION SPEED: AN EMPIRICAL INVESTIGATION

Abstract

This paper explores strategic flexibility, environmental turbulence and the internationalization speed of Small and Medium-size Enterprise (SME). Since SMEs are confronted with dynamic international markets, their capability to easily adjust and penetrate into the international market is a challenge for sustaining the competitive performance. This article extends the resource orchestration theory to analyses how SMEs’ strategic flexibility may impact on their internationalization speed in turbulent contexts. The survey-based research tapped responses from 400 manufacturing and technology SMEs in multiple countries. The results show that strategic flexibility has a positive impact on the rate of internationalization, particularly in environments characterized by high dynamism. We also find evidence for the moderating effect of resource orchestration capabilities, which allow the firm to be responsive and adaptive in turbulent market conditions. Theoretical contributions arise in so that the results extend resource-based view (RBV) and help to explain how SMEs can strategically act in uncertain international markets. Managerial implications are that firms with more strategic flexibility should focus on resource flexibility to accelerate internationalization. The study adds to the literature by incorporating strategic flexibility and environmental considerations into internationalization process studies and reflects the significance of dynamic capabilities in entering foreign markets.

Keywords: Strategic Flexibility, Environmental Dynamism, SME Internationalization, Resource Orchestration, Dynamic Capabilities, International Business.