Sustaining innovation during downsizing strategy through knowledge coupling, business process digitization, and market capitalizing agility

COVID-19 has developed chaos and uncertainty for small and medium enterprises (SMEs) causing mass downsizing. Under such uncertainty, innovation is key to survival and agility to growth. This study examines role of knowledge coupling and business process digitization (BPD) in sustaining innovation through market capitalizing agility (MCA) besides downsizing strategy. Data have been collected from top and mid management of Chinese manufacturing SMEs and analyzed with knowledge-based view and self-tuning model through Smart-PLS 4. Knowledge coupling positively contributes to MCA and innovation irrespective of downsizing strategy. Effect of BPD on innovation performance is same;however, insignificant on MCA in no-downsizing sample. Likewise, MCA positively influences innovation performance and positively mediates between knowledge coupling (BPD) and innovation performance only during downsizing. This study is first of its kind to establish mediating effect of MCA between knowledge coupling (BPD) and innovation performance during downsizing phase and offers significant theoretical and practical implications. JEL Classification: J63, O31

SMEs' sustainable innovation performance during pandemic: impact of knowledge coupling and parallel-mediation of ambidexterity and market capitalising agility

Covid-19 pandemic has caused crisis and uncertainty which adversely influenced innovation performance of small and medium enterprises (SMEs). Innovation is a primary source of survival and growth in SMEs;therefore, this study aims to develop and empirically analyse conceptual model that sustains innovation performance of SMEs during the pandemic. This study integrates knowledge-based view (KBV) with a self-tuning model to examine Chinese manufacturing SMEs. Survey data of 306 responses were collected from the top and mid management and analysed through Smart-PLS 3. Results indicate a positive effect of knowledge coupling on innovation performance;besides, ambidexterity and market capitalising agility (MCA) positively mediate between knowledge coupling and SME innovation performance. This study contributes to KBV, self-tuning, strategy, innovation and crisis management literature. To practitioners, this study advises developing dynamic capabilities to sustain innovations during pandemic crisis. This is the earliest empirical examination to mediate the effect of knowledge coupling on innovation performance through ambidexterity and MCA during a crisis.