Competitive Strategy, Organizational Learning and SMEs Performance

Abstract

Organizational learning and competitive strategy have been one of the most significant topics for discussion in Small and Medium Enterprises (SMEs) context. However, this service-based contemporary organizations, i.e. SMEs, and their key strategic tasks are investigated in this domain. The study investigates the mediating effect of competitive strategy towards the relationship between organizational learning and SME performance. From the population of 3,477 service-based SMEs in Brunei Darussalam, 275 valid responses were collected from the questionnaire survey. The collected data was processed using SMART Partial Least Square (PLS) – Structural Equation Modelling software to analyze the measurement model, namely the reliability and validity of data, as well as structural model assessment for hypothesis testing. The results revealed using Preacher and Hayes mediation analysis a momentous effect of organizational learning on SME performance. The study found using structural model evaluation, organizational learning as having significant positive impact on SME performance (β = 0.207, t = 2.843, p < 0.004). From these findings, this paper not only offers useful implications for SME owners/managers by outlining the importance implementing organizational learning based on the appropriate competitive strategy, but also made theoretical contributions to the body of knowledge in the field of strategic management, under SMEs context. Finally, this paper recommended other combinations of organizational factors as potential future research.