Thriving in Turmoil: Unraveling the Interplay of Resources, Resilience, and Performance among SMEs in Times of Economic Vulnerability

Authors

  • Muhammad Zeeshan Shaukat Associate Professor, Hailey College of Commerce, University of the Punjab, Lahore, Pakistan Author
  • Sheikh Usman Yousaf Associate Professor, Hailey College of Commerce, University of the Punjab, Lahore, Pakistan Author
  • Usman Sarwar Assistant Professor, Hailey College of Banking & Finance, University of the Punjab, Lahore, Pakistan Author
  • Sonia Sattar Lecturer, Hailey College of Commerce, University of the Punjab, Lahore, Pakistan Author

DOI:

https://doi.org/10.61506/01.00312

Keywords:

Social networks, Resilience, SME performance, COVID-19, Owner-managers

Abstract

This research endeavours to contribute to the existing body of scholarly work by elucidating the pivotal role of social networks in bolstering the resilience of Small and Medium-sized Enterprises (SMEs) amid the propagation of COVID-19. Despite the considerable research on the interplay between networks and firms' performance, extant literature still needs to comprehensively elucidate how social networks influence organizational performance, particularly within the context of the personal dis-contact phase observed in Pakistan. Moreover, the crucial nexus between resilience, social networks, and firm performance still needs to be adequately explored. Consequently, this paper seeks to address these gaps by introducing a novel conceptual framework termed the Resource-Resilience-Performance framework. This framework aims to delineate the intricate mechanisms through which social networks, as a valuable resource, facilitate the adaptive capabilities of SMEs, thereby fostering resilience and ultimately enhancing sustainability amidst crises. Employing a deductive approach, this study adopts a survey strategy to gather data from 410 SME owner-managers, focusing on the third phase of the COVID-19 pandemic in Pakistan. Data collection is executed through an adaptive questionnaire. Subsequently, an analysis is conducted using SmartPLS with the Bootstrapping approach. The findings reveal that formal and informal social ties are crucial in providing SME owners with valuable information from their social networks. These networks serve as a support mechanism, aiding managers in making informed decisions amidst adversities and granting them a competitive edge over their counterparts. Given the unavailability of a comprehensive and up-to-date list of SMEs in Pakistan during the pandemic, the snowball sampling technique was utilized. Consequently, the generalizability of the findings may be questioned. However, there remains potential to establish a directory of SMEs and employ probability sampling techniques in future studies. This research contributes to social network theory by enriching our understanding of its application during the pandemic. Furthermore, it empirically demonstrates the instrumental role of social networks in providing support during crises, offering guidance to managers on cultivating robust social ties as a proactive strategy for navigating future uncertainties. Ultimately, this study underscores the significance of social capital as an immunizing factor for SMEs operating in developing countries, particularly within the context of Pakistan.

References

Abeysekara, N., Wang, H., & Kuruppuarachchi, D. (2019). Effect of supply-chain resilience on firm performance and competitive advantage: A study of the Sri Lankan apparel industry. Business Process Management Journal.

Abigail, E. C. (2023). Unlocking Economic Growth Through Taxation in the case Nigeria. Journal of Business and Economic Options, 6(4), 19-25.

Acquaah, M. (2007). Managerial Social Capital, Strategic Orientation and Organizational Performance in An Emerging Economy. Strategic Management Journal, 28, 1235–1255.

Akgün, A. E., & Keskin, H. (2014). OrganizationalOrganizational resilience capacity and firm product innovativeness and performance. International Journal of Production Research, 52(23), 6918-6937.

Aladejebi, O. (2020). Managing small businesses in Nigeria during COVID-19 crisis: impact and survival strategies. IOSR Journal of Business and Management, 22(8), 24-34.

Anderson, M. (2008). "Social Networks and the Cognitive Motivation to RealizeRealize Network Opportunities: A Study of Managers Information Gathering Behaviors", Journal of Organizational Behavior, 29: 51–78.

Atayah, O. F., Dhiaf, M. M., Najaf, K., & Frederico, G. F. (2022). Impact of COVID-19 on financial performance of logistics firms: evidence from G-20 countries. Journal of Global Operations and Strategic Sourcing, 15(2), 172-196.

Aydemir, R. (2024). Examining the Cluster Life Cycle in the Process of Economic Development. Journal of Policy Options, 7(1), 18-26.

Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120.

Barros, C.P. and Santos, C.M. (2009). Earnings of Hotel Managers: Comparing the Human and Social Capital Approach. Tourism Economics, 15 (1), 87-103.

Bartik, A. W., Bertrand, M., Lin, F., Rothstein, J., & Unrath, M. (2020). Measuring the labor market at the onset of the COVID-19 crisis (No. w27613). National Bureau of Economic Research.

Bayer, J., & Servan-Schreiber, E. (2011). Gaining competitive advantage through the analysis of customers' social networks. Journal of Direct, Data and Digital Marketing Practice, 13, 106-118.

Bayram, L. (2006). Geleneksel Performans Değerlendirme Yöntemlerine Yeni Bir Alternatif: 360 Derece Performans Değerlendirme. Sayıştay Dergisi, 62, 47-65.

Burt, R. S. (1992). Structural Holes: The Social Structure of Competition. Cambridge: Harvard University Press.

Carracedo, P., Puertas, R., & Marti, L. (2021). Research lines on the impact of the COVID-19 pandemic on business. A text mining analysis. Journal of Business Research, 132, 586-593.

Chen, M., Liu, H., Wei, S., & Gu, J. (2018). Top managers' managerial ties, supply chain integration, and firm performance in China: A social capital perspective. Industrial Marketing Management, 74, 205-21

Chen, R., Xie, Y., & Liu, Y. (2021). Defining, conceptualizing, and measuring organizational resilience: A multiple case study. Sustainability, 13(5), 2517.

Chow, W. S., & Chan, L. S. (2008). Social network, social trust and shared goals in organizational knowledge sharing. Information & Management, 45(7), 458–465.

Chowdhury, L. A. M., Rana, T., & Azim, M. I. (2019). Intellectual capital efficiency and organizational performance: In the context of the pharmaceutical industry in Bangladesh. Journal of Intellectual Capital. 20(6), 784-806

Cizakca, M. (2024). Understanding the Determinants of Foreign Trade Volume in Turkiye: An Empirical Analysis. Journal of Business and Economic Options, 7(1), 19-28.

Collins, C. & Clark, K. (2003). Strategic Human Resource Practices, Top Management Team Social Networks and Firm Performance: The Role of Human Resource Practices in Creating Organizational Competitive Advantage. Academy of Management Journal, 46(6), 740–751.

Duchek, S., Raetze, S., & Scheuch, I. (2020). The role of diversity in organizational resilience: a theoretical framework. Business research, 13(2), 387-423.

Fernandez-Perez, V., Verdu-Jover, A. J. and Benitez- Amado, J. (2013). Managerial Social Networks and Strategic Flexibility: The Role of Strategic Orientation. Personnel Review, 42(2), 134–153.

Granovetter, M. S. (1973). The strength of weak ties. American journal of sociology, 78(6), 1360-1380.

Gulati, R., Nohria, N., & Zaheer, A. (2000). Strategic networks. Strategic Management Journal, 21(3), 203–215.

Gunday, G., Ulusoy, G., Kilic, K., & Alpkan, L. (2011). Effects of innovation types on firm performance. International Journal of Production Economics, 133(2), 662-676.

Hamouche, S. (2021). Human resource management and the COVID-19 crisis: Implications, challenges, opportunities, and future organizational directions. Journal of Management & Organization, 1–16.

Hasan, T., & Sadat, A. (2023). Dynamics of Job Satisfaction in Bangladesh's Banking Sector Implications for Employee Engagement and Organizational Success. Journal of Business and Economic Options, 6(4), 33-39.

Haythornthwaite, C. (1996). Social network analysis: An approach and technique for the study of information exchange. Library & information science research, 18(4), 323–342.

He, Q., Liu, J., Wang, S., & Yu, J. (2020). The impact of COVID-19 on stock markets. Economic and Political Studies, 8(3), 275-288.

Hooley, G. J., Greenley, G. E., Cadogan, J. W., & Fahy, J. (2005). The performance impact of marketing resources. Journal of Business Research, 58(1), 18–27.

Hsu, H.C.C, Liu, Z. & Huang, S. (2012). Managerial Ties in Economy Hotel Chains in China: Comparison of Different Ownership Types During Entrepreneurial Processes. International Journal of Contemporary Hospitality Management, 24(3), 477–495.

Hutzschenreuter, J. (2009). Conceptual basics. Management Control in Small and Medium-Sized Enterprises: Indirect Control Forms, Control Combinations and their Effect on Company Performance, 17-62.

Ibrahim, M., & Rasheed, A. (2024). Exploring the Link Between Customer Relationship Management and Hotel Performance. Journal of Policy Options, 7(1), 1-10.

Ingram, P. and Roberts, P. W. (2000). Friendships among Competitors in The Sydney Hotel Industry, American Journal of Sociology, 106(2), 387–423.

Iqbal, M., & Abbas, W. (2024). Determinants of Expected Service Quality: A Comparative Study in Pakistani Banking Sector. Journal of Policy Options, 7(1), 27-35.

Jeong, S. W., Ha, S., & Lee, K. H. (2021). How to measure social capital in an online brand community? A comparison of three social capital scales. Journal of Business Research, 131, 652–663.

Jiang, Y., Ritchie, B. W., & Verreynne, M. L. (2019). Building tourism organizational resilience to crises and disasters: A dynamic capabilities view. International Journal of Tourism Research, 21(6), 882–900.

Joshi, A., Kale, S., Chandel, S., & Pal, D. K. (2015). Likert scale: Explored and explained. British journal of applied science & technology, 7(4), 396.

Jusoh, R. and Parnell, J.A. (2008). Competitive Strategy and Performance Measurement in The Malaysian Context. Management Decision, 46(1), 5-31.

Kantur, D., & İşeri-Say, A. (2012). OrganizationalOrganizational resilience: A conceptual, integrative framework. Journal of Management & Organization, 18(6), 762-773.

Karim, A., & Said, F. (2024). Discussion on Malaysia’s Globalization Journey From Resource-Based Economy to Global Player. Journal of Business and Economic Options, 7(1), 29-38.

Ketter, E. (2022). Bouncing back or bouncing forward? Tourism destinations’ crisis resilience and crisis management tactics. European Journal of Tourism Research, 31, 3103–3103.

Koronis, E., & Ponis, S. (2018). Better than before: the resilient organizationorganization in crisis mode. Journal of Business Strategy.

Kuntz, J. R., Malinen, S., & Näswall, K. (2017). Employee resilience: Directions for resilience development. Consulting Psychology Journal: Practice and Research, 69(3), 223.

Lamm, F. (2014). The challenges of researching OHS of vulnerable workers in small businesses. Small Enterprise Research, 21(2), 161–179.

Laosirihongthong, T., Prajogo, D. I., & Adebanjo, D. (2014). The relationships between firm’s strategy, resources and innovation performance: resources-based view perspective. Production Planning & Control, 25(15), 1231–1246.

Lee, C., Lee, K. and Pennings, J. (2001). Internal Capabilities, External Networks and Performance: A Study On Technology-Based Ventures. Strategic Management Journal, 22, 615- 640.

Leenders, R.T.A.J. and Gabbay, S.M. (1999). An agenda for the future. Shaul M. Gabbay ve Roger T.A.J. Leenders (Ed.), In Corporate Social Capital and Liability (pp. 483-494). New York: Kluwer.

Li, X., Wu, Q., Holsapple, C. W., & Goldsby, T. (2017). An empirical examination of firm financial performance along dimensions of supply chain resilience. Management Research Review.

Lin, F. J., & Lin, Y. H. (2016). The effect of network relationship on the performance of SMEs. Journal of Business Research, 69(5), 1780-1784.

Luther, S. (2006). Resilience in development. A synthesis of research Across five Decades in.

Mallak, L. A. (1998). Measuring resilience in health care provider organizations. Health manpower management, 24(4), 148-152.

Mayhew, K., & Anand, P. (2020). COVID-19 and the UK labour market. Oxford Review of Economic Policy, 36(Supplement_1), S215-S224.

McManus, S., Seville, E., Vargo, J., & Brunsdon, D. (2008). Facilitated process for improving organizational resilience. Natural hazards review, 9(2), 81–90.

Melián-Alzola, L., Fernández-Monroy, M., & Hidalgo-Peñate, M. (2020). Hotels in contexts of uncertainty: Measuring organizational resilience. Tourism management perspectives, 36, 100747.

Moliterno, T. P., & Mahony, D. M. (2011). Network theory of organizationorganization: A multilevel approach. Journal of Management, 37(2), 443–467.

Munir, Q., Akram, B., & Abbas, S. A. (2024). Understanding Stock Price Dynamics with Dividend-Related Metrics and Financial Indicators in Pakistan’s Non-Financial Sectors. Journal of Business and Economic Options, 7(1), 1-9.

Namadi, S. (2023). Strategic Management of Outsourcing Balancing Profitability and Cost Control in Corporate Operations. Journal of Business and Economic Options, 6(4), 26-32.

Nudzor, H. (2023). From Flames to Fortune Improving Fire Risk Management in the Case of Ghana. Journal of Business and Economic Options, 6(4), 7-11.

Olanrewaju, A. S. T., Hossain, M. A., Whiteside, N., & Mercieca, P. (2020). Social media and entrepreneurship research: A literature review. International Journal of Information Management, 50, 90–110.

Panwar, R., Pinkse, J., & De Marchi, V. (2022). The future of global supply chains in a post-COVID-19 world. California Management Review, 64(2), 5-23.

Park, S. H. & Luo, Y. (2001). Guanxi and Organizational Dynamics: Organizational Networking in Chinese Firms. Strategic Management Journal, 22(5), 455–477.

Parnell, J. A., & Carraher, S. (2001). The role of effective resource utilization on strategy's impact on performance. International Journal of Commerce and Management, 11(3/4), 1–34.

Pavelescu, F. M. (2020). The Challenges of the COVID-19 pandemic on the employment model: Implications for Romania. Revista romana de economie, 51.

Peng, M. and Luo, Y. (2000). Managerial Ties and Firm Performance in A Transition Economy: The Nature of A Micro-Macro Link. Academy of Management Journal, 43(3), 48

Cross, R. and Cummings, J. N. (2004). Tie and Network Correlates of Individual Performance in Knowledge Intensive Work, Academy of Management Journal, 47(6), 928–937. 6–501.

Pulka, B. M., Ramli, A., & Mohamad, A. (2021). Entrepreneurial competencies, entrepreneurial orientation, entrepreneurial network, government business support and SMEs performance. The moderating role of the external environment. Journal of Small Business and Enterprise Development, 28(4), 586-618.

Quader, M. (2024). Exploring Human Resource Management Practices and Employee Satisfaction in Bangladesh’s Private Banking Sector. Journal of Policy Options, 7(1), 36-45.

Rababah, A., Al‐Haddad, L., Sial, M. S., Chunmei, Z., & Cherian, J. (2020). AnalyzingAnalyzing the effects of COVID‐19 pandemic on the financial performance of Chinese listed companies. Journal of Public Affairs, 20(4), e2440.

Rasheed, R., & Siddiqui, S. H. (2018). Attitude for inclusive finance: influence of owner-managers and firms' characteristics on SMEs financial decision making. Journal of Economic and Administrative Sciences, 35(3), 158-171

Rath, N. (2024). Perceived Advantages and Challenges of Internet Marketing: A Study of Small Entrepreneurs in Punjab, India. Journal of Policy Options, 7(1), 11-17.

Ringle, C. M., & Sarstedt, M. (2016). Gain more insight from your PLS-SEM results: The importance-performance map analysis. Industrial management & data systems, 116(9), 1865-1886.

Sayvaya, I., & Phommason, S. (2023). Discussion on Rainy Season Access and Poverty Alleviation in Laos. Journal of Business and Economic Options, 6(4), 1-6.

Sekaran, U. (2003). Business research methods for managers. A skill–Building Approach.

Shafi, M., Liu, J., & Ren, W. (2020). Impact of COVID-19 pandemic on micro, small, and medium-sized Enterprises operating in Pakistan. Research in Globalization, 2, 100018.

Somers, S. (2009). Measuring resilience potential: An adaptive strategy for organizational crisis planning. Journal of contingencies and crisis management, 17(1), 12–23.

Sun, T., Zhang, W. W., Dinca, M. S., & Raza, M. (2022). Determining the impact of COVID-19 on the business norms and performance of SMEs in China. Economic Research-Ekonomska Istraživanja, 35(1), 2234-2253.

Tukamuhabwa, B. R., Stevenson, M., Busby, J., & Zorzini, M. (2015). Supply chain resilience: definition, review and theoretical foundations for further study. International journal of production research, 53(18), 5592-5623.

Udriyah, U., Tham, J., & Azam, S. (2019). The effects of market orientation and innovation on competitive advantage and business performance of textile SMEs. Management Science Letters, 9(9), 1419-1428

Ustaoglu, M., & Yildiz, B. (2023). Balancing Tradition and Modernity in Turkey's Islamic Finance Landscape. Journal of Business and Economic Options, 6(4), 12-18.

Van Laere, K., & Heene, A. (2003). Social networks are a source of competitive advantage for the firm. Journal of Workplace Learning, 15(6), 248-258.

Wang, Z., & Wang, N. (2012). Knowledge sharing, innovation and firm performance. Expert systems with applications, 39(10), 8899-8908.

Watson, J. (2007). Modeling the relationship between networking and firm performance. Journal of Business Venturing, 22(6), 852–874.

Wincent, J., Anokhin, S., & Örtqvist, D. (2010). Does network board capital matter? A study of innovative performance in strategic SME networks. Journal of Business Research, 63(3), 265-275.

Xiong, L. (2024). Driving Growth for SMEs in Laos’ Commercial Sector Challenges and Opportunities. Journal of Business and Economic Options, 7(1), 10-18.

Downloads

Published

2024-06-01

Issue

Section

Articles

How to Cite

Shaukat, M. Z. ., Yousaf, S. U. ., Sarwar, U. ., & Sattar, S. . (2024). Thriving in Turmoil: Unraveling the Interplay of Resources, Resilience, and Performance among SMEs in Times of Economic Vulnerability. Bulletin of Business and Economics (BBE), 13(2), 164-173. https://doi.org/10.61506/01.00312

Similar Articles

1-10 of 293

You may also start an advanced similarity search for this article.

Most read articles by the same author(s)