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RESOURCES MANAGEMENT AND SME'S PERFORMANCE
Corresponding Author(s) : Aurangzeb
Humanities & Social Sciences Reviews,
Vol. 9 No. 3 (2021): May
Abstract
Purpose of the Study: This study aimed at investigating the level of tangible and intangible resources management of small and medium-sized enterprises (SMEs) entrepreneurs that affect the business unit performance.
Methodology: The population used in this study was 300 entrepreneurs and executives representing businesses in Pakistan's production and service sectors. This study was quantitative, and data was collected through questionnaires related to business performance. There were three factors of intangible resource management, i.e., human capital management, relationship capital management, and customer capital management. Data were analyzed using structural equation modelling.
Principal Findings: The outcomes indicated that human capital management and customer capital management positive and significant influence on the business performance of SMEs, whereas no influence on capital management. Technology capital management fully mediates the association between human capital management and customer capital management.
Applications of the study: This study is useful in strategic management and implementation to build relation capital among approximately 6 million business units of SMEs and micro SMEs in Pakistan, which will lead to the strong foundations of the country.
Novelty/Originality of this study: The present study examined the resources management practices of SMS across the country for the first time that indicates that how efficient resource management practices influence the performance of business units and entrepreneurs in a developing economy like Pakistan.
Keywords
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- Adner, R., & Helfat, C. E. (2003). Corporate effects and dynamic managerial capabilities. Strategic Management Journal, 24(10), 1011-1025. https://doi.org/10.1002/smj.331 DOI: https://doi.org/10.1002/smj.331
- Almaamari Q. and Abdulrab M. (2017). Factors affecting customer loyalty in service organizations. International Journal of Energy Policy and Management, 2(5), 25-31.
- Azadeh Dabbaghi, (2017). Identification and Prioritization of the Criteria Measuring Organizational Capital in the Oil Industry using Grey Systems Theory. Petroleum Business Review, 1(1).
- Becker G. and Gerhart B. (1996). The impact of human resource management on organizational performance: progress and prospects. The Academy of Management Journal, 39(4), 779 -801. https://doi.org/10.2307/256712 DOI: https://doi.org/10.2307/256712
- Bollen, K.A. (1990). overall fit in covariance structure models: Two types of sample size effects. Psychological Bulletin, 107(2), 256-59. https://doi.org/10.1037/0033-2909.107.2.256 DOI: https://doi.org/10.1037/0033-2909.107.2.256
- Clarke T& Rollo C. (2001). Corporate initiatives in knowledge management. Journal Education Training, 43 (5), 206-214. https://doi.org/10.1108/00400910110399201 DOI: https://doi.org/10.1108/00400910110399201
- Diamantopoulos, A. and Siguaw, J.A. (2000), Introducing LISREL. London: Sage Publications. https://doi.org/10.4135/9781849209359 DOI: https://doi.org/10.4135/9781849209359
- Edvinsson, L. and Malone, M. (1997). Intellectual capital: realizing your company's true value by finding its hidden brainpower. Harper Collins, New York.
- Fernandez E., Montes J.M., Vazquez C.J. (2000). Typology and strategic analysis of intangible resources: a resource-based approach. Tec novation, 20(20), 81–92. https://doi.org/10.1016/S0166-4972(99)00115-7 DOI: https://doi.org/10.1016/S0166-4972(99)00115-7
- Fiala Roman, Borůvková Jana, (2012). The valuation of organizational capital. Journal of Competitiveness, 4(4), 123-132. https://doi.org/10.7441/joc.2012.04.09 DOI: https://doi.org/10.7441/joc.2012.04.09
- Gerbing, D.W. and Anderson, J.C. (1993). On the meaning of within-factor correlated measurement errors. Journal of Consumer Research, 11 (6), 572-80. https://doi.org/10.1086/208993 DOI: https://doi.org/10.1086/208993
- Gunasekaran A, Ngai EWT, McGaughey RE (2006). Information technology and systems justification: a review for research and applications. Eur. J. Oper Res, 173, 957–983. https://doi.org/10.1016/j.ejor.2005.06.002 DOI: https://doi.org/10.1016/j.ejor.2005.06.002
- Hu, L.T. and Bentler, P.M. (1999). Cutoff criteria for fit indexes in covariance structure analysis: conventional criteria versus new alternatives structural equation analysis: conventional criteria versus new alternatives. Structural Equation Modeling, 6(1), 1-55. https://doi.org/10.1080/10705519909540118 DOI: https://doi.org/10.1080/10705519909540118
- Lawson B, Tyler B. Cousins P. (2008). Antecedents and consequences of social capital on buyer performance. J. Oper, Manage, 26, 446. https://doi.org/10.1016/j.jom.2007.10.001 DOI: https://doi.org/10.1016/j.jom.2007.10.001
- Khan, K. M., Ullah M. (2021). Mediating Role of Ethical Leadership Between Employees Empowerment and Competitive Edge: A Case of Commercial Banks in Pakistan. Humanities & Social Sciences Reviews, 9(2), 219-231. https://doi.org/10.18510/hssr.2021.9223 DOI: https://doi.org/10.18510/hssr.2021.9223
- Lin H.-F., (2007). knowledge sharing and firm innovation capability: an empirical study. International Journal of Manpower, 28, 315-332. https://doi.org/10.1108/01437720710755272 DOI: https://doi.org/10.1108/01437720710755272
- MacCallum R. C., Keith F. Widaman, Kristopher J. Preacher and Sehee Hong. (2001). Sample size in factor analysis: the role of model error sample size in factor analysis: the role of model error. Multivariate Behavioral Research, 36 (4), 611-637. https://doi.org/10.1207/S15327906MBR3604_06 DOI: https://doi.org/10.1207/S15327906MBR3604_06
- MacCallum, R.C., Browne, M.W., and Sugawara, H., M. (1996). Power analysis and determination of sample size for covariance structure modeling. Determination of sample size for covariance structure modeling. Psychological Methods, 1(2), 130-49. https://doi.org/10.1037/1082-989X.1.2.130 DOI: https://doi.org/10.1037/1082-989X.1.2.130
- Marsh, H.W., Hau, K.T., and Wen, Z. (2004). In search of golden rules: comment on hypothesis-testing approaches to setting cutoff values for fit indexes and dangers in overgeneralizing hu and Bentler's findings. Structural Equation Modeling, 1(3), 320-41. https://doi.org/10.1207/s15328007sem1103_2 DOI: https://doi.org/10.1207/s15328007sem1103_2
- Miles, J. and Shevlin, M. (2007). A time and a place for incremental fit indices. Personality and individual differences, 42(5), 869-74. https://doi.org/10.1016/j.paid.2006.09.022 DOI: https://doi.org/10.1016/j.paid.2006.09.022
- Murphy, M. (2002). Organizational change and firm performance. OECD science, technology and industry Working Papers, 2002/14, OECD Publishing.
- Nonaka, Toyama & Konno, (2000). SECI, Ba and leadership: a unified model of dynamic knowledge creation. Long Range Planning, 33(1), 5-34. https://doi.org/10.1016/S0024-6301(99)00115-6 DOI: https://doi.org/10.1016/S0024-6301(99)00115-6
- Olufunmilola (Lola) Dada and Helen Fogg, (2016). Organizational learning, entrepreneurial orientation, and the role of university engagement in SMEs. International Small Business Journal, 34(1), 86–104. https://doi.org/10.1177/0266242614542852 DOI: https://doi.org/10.1177/0266242614542852
- Schermelleh-Engel, K., Moosbrugger, H., and Müller, H. (2003). Evaluating the fit of structural equation models: tests of significance and descriptive goodness-of-fit measures. Methods of Psychological Research Online, 8(2), 23-74.
- Sharma, S., Mukherjee, S., Kumar, A., and Dillon, W.R. (2005). A simulation study to investigate the use of cutoff values for assessing model fit in covariance structure models. Journal of Business Research, 58 (1), 935-43. https://doi.org/10.1016/j.jbusres.2003.10.007 DOI: https://doi.org/10.1016/j.jbusres.2003.10.007
- Subramaniam and Youndt A. (2017). The influence of intellectual capital on the type of innovative capabilities. Academy of Management Journal, 48(3), 450-463. https://doi.org/10.5465/amj.2005.17407911 DOI: https://doi.org/10.5465/amj.2005.17407911
- Teece, D. J., & Pisano, G. (1994). the dynamic capabilities of firms: an introduction. Industrial and corporate change, 3(3), 537- 556. https://doi.org/10.1093/icc/3.3.537-a DOI: https://doi.org/10.1093/icc/3.3.537-a
- Teece, D. J., G. Pisano and A. Schuen (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509–533. https://doi.org/10.1002/(SICI)1097-0266(199708)18:7<509::AID-SMJ882>3.0.CO;2-Z DOI: https://doi.org/10.1002/(SICI)1097-0266(199708)18:7<509::AID-SMJ882>3.0.CO;2-Z
- Vandenberg, R. J. (2006). Statistical and methodological myths and urban legends. Organizational Research Methods, 9(2), 194-201. https://doi.org/10.1177/1094428105285506 DOI: https://doi.org/10.1177/1094428105285506
- Wang, C.L. and Ahmed, P.K. (2007). Dynamic capabilities: a review and research agenda. International Journal of Management Reviews, 9, 31-51. https://doi.org/10.1111/j.1468-2370.2007.00201.x DOI: https://doi.org/10.1111/j.1468-2370.2007.00201.x
- Ullah, M., Afghan, N., Afridi, A.S. (2019). Effects of corporate governance on capital structure and financial performance: empirical evidence from listed cement corporations in Pakistan. Global Social Sciences Review, 4(3), 273-283. https://doi.org/10.31703/gssr.2019(IV-III).25 DOI: https://doi.org/10.31703/gssr.2019(IV-III).25
- Ullah, M., Malik., A.M., Zeb, A., Rehman, A. (2019). Mediating role of capital structure between corporate governance and risk. Journal of Managerial Sciences, 13(3), 47-56.
- Ullah, M. (2020). Women empowerment and social development in Afghanistan through microfinance. International Journal of Academic Research in business and Social Sciences, 10(12), 377-389. https://doi.org/10.6007/IJARBSS/v10-i12/8324 DOI: https://doi.org/10.6007/IJARBSS/v10-i12/8324
- Wheaton, B., Muthen, B., Alwin, D., F., and Summers, G. (1997). Assessing reliability and stability in panel models. Sociological Methodology, 8(1), 84-136. https://doi.org/10.2307/270754 DOI: https://doi.org/10.2307/270754
References
Adner, R., & Helfat, C. E. (2003). Corporate effects and dynamic managerial capabilities. Strategic Management Journal, 24(10), 1011-1025. https://doi.org/10.1002/smj.331 DOI: https://doi.org/10.1002/smj.331
Almaamari Q. and Abdulrab M. (2017). Factors affecting customer loyalty in service organizations. International Journal of Energy Policy and Management, 2(5), 25-31.
Azadeh Dabbaghi, (2017). Identification and Prioritization of the Criteria Measuring Organizational Capital in the Oil Industry using Grey Systems Theory. Petroleum Business Review, 1(1).
Becker G. and Gerhart B. (1996). The impact of human resource management on organizational performance: progress and prospects. The Academy of Management Journal, 39(4), 779 -801. https://doi.org/10.2307/256712 DOI: https://doi.org/10.2307/256712
Bollen, K.A. (1990). overall fit in covariance structure models: Two types of sample size effects. Psychological Bulletin, 107(2), 256-59. https://doi.org/10.1037/0033-2909.107.2.256 DOI: https://doi.org/10.1037/0033-2909.107.2.256
Clarke T& Rollo C. (2001). Corporate initiatives in knowledge management. Journal Education Training, 43 (5), 206-214. https://doi.org/10.1108/00400910110399201 DOI: https://doi.org/10.1108/00400910110399201
Diamantopoulos, A. and Siguaw, J.A. (2000), Introducing LISREL. London: Sage Publications. https://doi.org/10.4135/9781849209359 DOI: https://doi.org/10.4135/9781849209359
Edvinsson, L. and Malone, M. (1997). Intellectual capital: realizing your company's true value by finding its hidden brainpower. Harper Collins, New York.
Fernandez E., Montes J.M., Vazquez C.J. (2000). Typology and strategic analysis of intangible resources: a resource-based approach. Tec novation, 20(20), 81–92. https://doi.org/10.1016/S0166-4972(99)00115-7 DOI: https://doi.org/10.1016/S0166-4972(99)00115-7
Fiala Roman, Borůvková Jana, (2012). The valuation of organizational capital. Journal of Competitiveness, 4(4), 123-132. https://doi.org/10.7441/joc.2012.04.09 DOI: https://doi.org/10.7441/joc.2012.04.09
Gerbing, D.W. and Anderson, J.C. (1993). On the meaning of within-factor correlated measurement errors. Journal of Consumer Research, 11 (6), 572-80. https://doi.org/10.1086/208993 DOI: https://doi.org/10.1086/208993
Gunasekaran A, Ngai EWT, McGaughey RE (2006). Information technology and systems justification: a review for research and applications. Eur. J. Oper Res, 173, 957–983. https://doi.org/10.1016/j.ejor.2005.06.002 DOI: https://doi.org/10.1016/j.ejor.2005.06.002
Hu, L.T. and Bentler, P.M. (1999). Cutoff criteria for fit indexes in covariance structure analysis: conventional criteria versus new alternatives structural equation analysis: conventional criteria versus new alternatives. Structural Equation Modeling, 6(1), 1-55. https://doi.org/10.1080/10705519909540118 DOI: https://doi.org/10.1080/10705519909540118
Lawson B, Tyler B. Cousins P. (2008). Antecedents and consequences of social capital on buyer performance. J. Oper, Manage, 26, 446. https://doi.org/10.1016/j.jom.2007.10.001 DOI: https://doi.org/10.1016/j.jom.2007.10.001
Khan, K. M., Ullah M. (2021). Mediating Role of Ethical Leadership Between Employees Empowerment and Competitive Edge: A Case of Commercial Banks in Pakistan. Humanities & Social Sciences Reviews, 9(2), 219-231. https://doi.org/10.18510/hssr.2021.9223 DOI: https://doi.org/10.18510/hssr.2021.9223
Lin H.-F., (2007). knowledge sharing and firm innovation capability: an empirical study. International Journal of Manpower, 28, 315-332. https://doi.org/10.1108/01437720710755272 DOI: https://doi.org/10.1108/01437720710755272
MacCallum R. C., Keith F. Widaman, Kristopher J. Preacher and Sehee Hong. (2001). Sample size in factor analysis: the role of model error sample size in factor analysis: the role of model error. Multivariate Behavioral Research, 36 (4), 611-637. https://doi.org/10.1207/S15327906MBR3604_06 DOI: https://doi.org/10.1207/S15327906MBR3604_06
MacCallum, R.C., Browne, M.W., and Sugawara, H., M. (1996). Power analysis and determination of sample size for covariance structure modeling. Determination of sample size for covariance structure modeling. Psychological Methods, 1(2), 130-49. https://doi.org/10.1037/1082-989X.1.2.130 DOI: https://doi.org/10.1037/1082-989X.1.2.130
Marsh, H.W., Hau, K.T., and Wen, Z. (2004). In search of golden rules: comment on hypothesis-testing approaches to setting cutoff values for fit indexes and dangers in overgeneralizing hu and Bentler's findings. Structural Equation Modeling, 1(3), 320-41. https://doi.org/10.1207/s15328007sem1103_2 DOI: https://doi.org/10.1207/s15328007sem1103_2
Miles, J. and Shevlin, M. (2007). A time and a place for incremental fit indices. Personality and individual differences, 42(5), 869-74. https://doi.org/10.1016/j.paid.2006.09.022 DOI: https://doi.org/10.1016/j.paid.2006.09.022
Murphy, M. (2002). Organizational change and firm performance. OECD science, technology and industry Working Papers, 2002/14, OECD Publishing.
Nonaka, Toyama & Konno, (2000). SECI, Ba and leadership: a unified model of dynamic knowledge creation. Long Range Planning, 33(1), 5-34. https://doi.org/10.1016/S0024-6301(99)00115-6 DOI: https://doi.org/10.1016/S0024-6301(99)00115-6
Olufunmilola (Lola) Dada and Helen Fogg, (2016). Organizational learning, entrepreneurial orientation, and the role of university engagement in SMEs. International Small Business Journal, 34(1), 86–104. https://doi.org/10.1177/0266242614542852 DOI: https://doi.org/10.1177/0266242614542852
Schermelleh-Engel, K., Moosbrugger, H., and Müller, H. (2003). Evaluating the fit of structural equation models: tests of significance and descriptive goodness-of-fit measures. Methods of Psychological Research Online, 8(2), 23-74.
Sharma, S., Mukherjee, S., Kumar, A., and Dillon, W.R. (2005). A simulation study to investigate the use of cutoff values for assessing model fit in covariance structure models. Journal of Business Research, 58 (1), 935-43. https://doi.org/10.1016/j.jbusres.2003.10.007 DOI: https://doi.org/10.1016/j.jbusres.2003.10.007
Subramaniam and Youndt A. (2017). The influence of intellectual capital on the type of innovative capabilities. Academy of Management Journal, 48(3), 450-463. https://doi.org/10.5465/amj.2005.17407911 DOI: https://doi.org/10.5465/amj.2005.17407911
Teece, D. J., & Pisano, G. (1994). the dynamic capabilities of firms: an introduction. Industrial and corporate change, 3(3), 537- 556. https://doi.org/10.1093/icc/3.3.537-a DOI: https://doi.org/10.1093/icc/3.3.537-a
Teece, D. J., G. Pisano and A. Schuen (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509–533. https://doi.org/10.1002/(SICI)1097-0266(199708)18:7<509::AID-SMJ882>3.0.CO;2-Z DOI: https://doi.org/10.1002/(SICI)1097-0266(199708)18:7<509::AID-SMJ882>3.0.CO;2-Z
Vandenberg, R. J. (2006). Statistical and methodological myths and urban legends. Organizational Research Methods, 9(2), 194-201. https://doi.org/10.1177/1094428105285506 DOI: https://doi.org/10.1177/1094428105285506
Wang, C.L. and Ahmed, P.K. (2007). Dynamic capabilities: a review and research agenda. International Journal of Management Reviews, 9, 31-51. https://doi.org/10.1111/j.1468-2370.2007.00201.x DOI: https://doi.org/10.1111/j.1468-2370.2007.00201.x
Ullah, M., Afghan, N., Afridi, A.S. (2019). Effects of corporate governance on capital structure and financial performance: empirical evidence from listed cement corporations in Pakistan. Global Social Sciences Review, 4(3), 273-283. https://doi.org/10.31703/gssr.2019(IV-III).25 DOI: https://doi.org/10.31703/gssr.2019(IV-III).25
Ullah, M., Malik., A.M., Zeb, A., Rehman, A. (2019). Mediating role of capital structure between corporate governance and risk. Journal of Managerial Sciences, 13(3), 47-56.
Ullah, M. (2020). Women empowerment and social development in Afghanistan through microfinance. International Journal of Academic Research in business and Social Sciences, 10(12), 377-389. https://doi.org/10.6007/IJARBSS/v10-i12/8324 DOI: https://doi.org/10.6007/IJARBSS/v10-i12/8324
Wheaton, B., Muthen, B., Alwin, D., F., and Summers, G. (1997). Assessing reliability and stability in panel models. Sociological Methodology, 8(1), 84-136. https://doi.org/10.2307/270754 DOI: https://doi.org/10.2307/270754