Adaptive practices in SMEs: leveraging dynamic capabilities for strategic adaptation

Abstract

PurposeA global pandemic, broken supply chains, workforce constraints, technological advancements in artificial intelligence, etc. illustrate the continual threats that SMEs face. Extending the dynamic capability concepts of sensing, seizing and transforming, this research investigates practices by which SMEs successfully adapt over time.Design/methodology/approachA comparative case study method was employed using a purposive sample of SMEs, consisting of three American firms and one Canadian firm.FindingsThree sets of organizational practices, termed adaptive practices, that underlie dynamic capabilities for successful adaptation were identified: (1) continuous learning and process improvement, (2) leveraging reciprocal relationships and (3) communicating effectively.Research limitations/implicationsThe selected cases are from two countries in North America. Using a qualitative, inductive process, the authors are able to identify patterns of actions within various organizations; however, they are not able to establish causality.Practical implicationsThis study provides practical guidance for leaders to take action to improve their SME's dynamic capabilities for adaptation through creating coherent bundles of specified adaptive practices.Social implicationsBetter understanding of how SMEs successfully adapt to high uncertainty and business viability threats can result in multidimensional (e.g. financial, emotional) and multi-level (individual, family, community), positive outcomes for societal stakeholders.Originality/valueThe findings of this study build on the literature of dynamic capabilities and organizational practices and provide a practical foundation for effective adaptation, labeled as adaptive practices.