Abstract
Given their small size and young age, entrepreneurial firms are resource deprived. However, to successfully compete in dynamic environments, these firms are still required to build their dynamic capabilities. Using the ever-changing Korean retail fashion industry, we suggest that entrepreneurial firms deprived of formal marketing departments can learn from their main external repositories of market and product knowledge and develop their strategic marketing (dynamic) capabilities as routines, which, in turn, improve the entrepreneurial firms’ performance. Moreover, following the microfoundations argument of dynamic capabilities, we argue that these strategic marketing capabilities in the form of routines can be further enhanced by the entrepreneurial firm’s human resource flexibility. Our data reveals support for our arguments.
Survey Items Used to Measure Latent Constructs
HR Flexibility (Second-Order)
Employee Skill Flexibility (First-Order)
Our firm can shift employees to different jobs when needed.
Our employees can switch to new jobs in our company within a short time.
Our employees are capable of putting new skills to use within a short time.
We employ people with a broad variety of skills.
Employee Behavior Flexibility (First-Order)
The flexibility of our employees work habits helps us to change according to market demands.
People in our firm change their work habits in response to changes in the competitive environment.
People in our firm readily change their work habits as demanded by changes in the working environment.
People in our firm change their behavior in response to customer requirements.
HR Practice Flexibility (First-Order)
Flexibility of our HR practices helps us to adjust to the changing demands of the environment.
Our firm modifies its HR system to keep pace with the changing competitive environment.
Our HR practice parameters are designed so that they adjust quickly to changes in business conditions.
We make frequent changes in our HR practices to align the HR system with changing work requirements.
Learning from Main Customers and External Designers (In Parenthesis)
New knowledge that our firm learns from our main customers (external designers) is well understood in our firm.
New knowledge that our firm learns from our main customers (external designers) contributes a great deal to multiple products.
Our firm is typically very satisfied with the quality of new knowledge that we learn from our main customers (external designers).
New knowledge that our firm learns from our main customers (external designers) greatly helps our firm improve its firm capabilities.
Strategic Marketing Capabilities
Market planning skills
Ability to effectively segment and target market.
Thoroughness of marketing planning process.
Allocating marketing resources effectively.
Translating marketing strategies into action.
Executing marketing strategies quickly.
Firm Performance
Return on sales (ROS).
Return on investment (ROI).
Reaching financial goals.
Growth in sales revenue.
Acquiring new customers.
Increasing sales to current customers.
References
Arend, R. J. 2014. “Entrepreneurship and Dynamic Capabilities: How Firm Age and Size Affect the ‘capability Enhancement–SME Performance’relationship.” Small Business Economics 42 (1): 33–57.10.1007/s11187-012-9461-9Search in Google Scholar
Armario, J. M., D. M. Ruiz, and E. M. Armario. 2008. “Market Orientation and Internationalization in Small and Medium‐sized Enterprises.” Journal of Small Business Management 46 (4): 485–511.10.1111/j.1540-627X.2008.00253.xSearch in Google Scholar
Autio, E., G. George, and O. Alexy. 2011. “International Entrepreneurship and Capability Development—Qualitative Evidence and Future Research Directions.” Entrepreneurship: Theory and Practice 35 (1): 11–37.10.1111/j.1540-6520.2010.00421.xSearch in Google Scholar
Bapuji, H., M. Hora, and A. M. Saeed. 2012. “Intentions, Intermediaries, and Interaction: Examining the Emergence of Routines.” Journal of Management Studies 49 (8): 1586–607.10.1111/j.1467-6486.2012.01063.xSearch in Google Scholar
Barrales‐Molina, V., F. J. Martínez‐López, and J. C. Gázquez‐Abad. 2014. “Dynamic Marketing Capabilities: Toward an Integrative Framework.” International Journal of Management Reviews 16 (4): 397–416.10.1111/ijmr.12026Search in Google Scholar
Beltrán-Martín, I., V. Roca-Puig, A. Escrig-Tena, and J. C. Bou-Llusar. 2008. “Human Resource Flexibility as a Mediating Variable between High Performance Work Systems and Performance.” Journal of Management 34 (5): 1009–44.10.1177/0149206308318616Search in Google Scholar
Bhattacharya, M., D. E. Gibson, and D. H. Doty. 2005. “The Effects of Flexibility in Employee Skills, Employee Behaviors, and Human Resource Practices on Firm Performance.” Journal of Management 31 (4): 622–40.10.1177/0149206304272347Search in Google Scholar
Bian, Q., and S. Forsythe. 2012. “Purchase Intention for Luxury Brands: A Cross Cultural Comparison.” Journal of Business Research 65 (10): 1443–51.10.1016/j.jbusres.2011.10.010Search in Google Scholar
Bolton, R. N., and K. N. Lemon. 1999. “A Dynamic Model of Customers’ Usage of Services: Usage as an Antecedent and Consequence of Satisfaction.” Journal of Marketing Research 36 (2): 171–86.10.1177/002224379903600203Search in Google Scholar
Branzei, O., and I. Vertinsky. 2006. “Strategic Pathways to Product Innovation Capabilities in SMEs.” Journal of Business Venturing 21 (1): 75–105.10.1016/j.jbusvent.2004.10.002Search in Google Scholar
Cavusgil, S. T., and S. Zou. 1994. “Marketing Strategy-Performance Relationship: an Investigation of the Empirical Link in Export Market Ventures.” The Journal of Marketing 58 (1): 1–21.10.1177/002224299405800101Search in Google Scholar
Cegarra-Navarro, J. G., M. E. Sánchez-Vidal, and D. Cegarra-Leiva. 2011. “Balancing Exploration and Exploitation of Knowledge through an Unlearning Context: An Empirical Investigation in SMEs.” Management Decision 49 (7): 1099–119.10.1108/00251741111151163Search in Google Scholar
Cohen, J. 1988. Statistical Power Analysis for the Behavioral Sciences. Mahwah, NJ: Lawrence Earlbaum.Search in Google Scholar
Cohen, M. D., and P. Bacdayan. 1994. “Organizational Routines Are Stored as Procedural Memory: Evidence from a Laboratory Study.” Organization Science 5 (4): 554–68.10.1287/orsc.5.4.554Search in Google Scholar
Conant, J. S., and J. C. White. 1999. “Marketing Program Planning, Process Benefits, and Store Performance: an Initial Study Among Small Retail Firms.” Journal of Retailing 75 (4): 525–41.10.1016/S0022-4359(99)00017-2Search in Google Scholar
Day, G. S. 1994. “The Capabilities of Market Driven Organizations.” Journal of Marketing 58 (4): 37–52.10.1177/002224299405800404Search in Google Scholar
Drucker, P. 2002. Managing in the Next Society. New York: St Martin’s Press.Search in Google Scholar
Eisenhardt, K. M., and J. A. Martin. 2000. “Dynamic Capabilities: What Are They?” Strategic Management Journal 21: 1105–21.10.1002/9781405164054.ch21Search in Google Scholar
Evers, N., S. Andersson, and M. Hannibal. 2012. “Stakeholders and Marketing Capabilities in International New Ventures: Evidence from Ireland, Sweden, and Denmark.” Journal of International Marketing 20 (4): 46–71.10.1509/jim.12.0077Search in Google Scholar
Feldman, M. S. 2000. “Organizational Routines as a Source of Continuous Change.” Organization Science 11 (6): 611–29.10.1287/orsc.11.6.611.12529Search in Google Scholar
Fernhaber, S. A., P. P. Mcdougall‐Covin, and D. A. Shepherd. 2009. “International Entrepreneurship: Leveraging Internal and External Knowledge Sources.” Strategic Entrepreneurship Journal 3 (4): 297–320.10.1002/sej.76Search in Google Scholar
Fiorito, S. S. 1990. “Testing a Portion of Sheth’s Theory of Merchandise Buying Behavior with Small Apparel Retail Firms.” Entrepreneurship: Theory and Practice 14 (4): 19–34.10.1177/104225879001400405Search in Google Scholar
Fornell, C., and D. F. Larcker. 1981. “Structural Equation Models with Unobservable Variables and Measurement Error: Algebra and Statistics.” Journal of Marketing Research 18 (3): 382–8.10.1177/002224378101800313Search in Google Scholar
Foss, N. J., and T. Pedersen. 2019. “Microfoundations in International Management Research: The Case of Knowledge Sharing in Multinational Corporations.” Journal of International Business Studies 50 (9): 1594–621.10.1057/s41267-019-00270-4Search in Google Scholar
Grandori, A. 2019. “The Firm in Search of its Nature.” European Management Review 16 (1): 81–92.10.1111/emre.12178Search in Google Scholar
Grant, R. 1996. “Toward a Knoweldge-Based Theory of the Firm.” Strategic Management Journal 17: 109–22.10.1002/smj.4250171110Search in Google Scholar
Griffith, D. A., S. M. Noble, and Q. Chen. 2006. “The Performance Implications of Entrepreneurial Proclivity: A Dynamic Capabilities Approach.” Journal of Retailing 82 (1): 51–62.10.1016/j.jretai.2005.11.007Search in Google Scholar
Hair, J. F., G. T. M. Hult, C. Ringle, and M. Sarstedt. 2016. A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM). Thousand Oaks: Sage.Search in Google Scholar
Hair, J. F., M. Sarstedt, L. Hopkins, and V. G. Kuppelwieser. 2014. “Partial Least Squares Structural Equation Modeling (PLS-SEM) an Emerging Tool in Business Research.” European Business Review 26 (2): 106–21.10.1108/EBR-10-2013-0128Search in Google Scholar
Helfat, C. E., and M. A. Peteraf. 2003. “The Dynamic Resource‐Based View: Capability Lifecycles.” Strategic Management Journal 24 (10): 997–1010.10.1002/smj.332Search in Google Scholar
Helfat, C. E., and M. A. Peteraf. 2015. “Managerial Cognitive Capabilities and the Microfoundations of Dynamic Capabilities.” Strategic Management Journal 36 (6): 831–50.10.1002/smj.2247Search in Google Scholar
Henseler, J., and M. Sarstedt. 2013. “Goodness-of-fit Indices for Partial Least Squares Path Modeling.” Computational Statistics 28 (2): 565–80.10.1007/s00180-012-0317-1Search in Google Scholar
Henseler, J., C. M. Ringle, and M. Sarstedt. 2015. “A New Criterion for Assessing Discriminant Validity in Variance-Based Structural Equation Modeling.” Journal of the Academy of Marketing Science 43 (1): 115–35.10.1007/s11747-014-0403-8Search in Google Scholar
Hughes, M., R. E. Morgan, R. D. Ireland, and P. Hughes. 2014. “Social Capital and Learning Advantages: A Problem of Absorptive Capacity.” Strategic Entrepreneurship Journal 8 (3): 214–33.10.1002/sej.1162Search in Google Scholar
Hughes, M., P. Hughes, J. Yan, and C. M. Sousa. 2019. “Marketing as an Investment in Shareholder Value.” British Journal of Management 30 (4): 943–65.10.1111/1467-8551.12284Search in Google Scholar
Hughes, P., M. Hughes, P. Stokes, H. Lee, P. Rodgers, and W. Y. Degbey. 2020. “Micro-foundations of Organizational Ambidexterity in the Context of Cross-Border Mergers and Acquisitions.” Technological Forecasting and Social Change 153: 119932.10.1016/j.techfore.2020.119932Search in Google Scholar
Kaman, V., A. M. McCarthy, R. D. Gulbro, and M. L. Tucker. 2001. “Bureaucratic and High Commitment Human Resource Practices in Small Service Firms.” Human Resource Planning 24 (1): 33–33.Search in Google Scholar
Ketkar, S., and P. K. Sett. 2009. “HR Flexibility and Firm Performance: Analysis of a Multi-Level Causal Model.” International Journal of Human Resource Management 20 (5): 1009–38.10.1080/09585190902850240Search in Google Scholar
Khavul, S., L. Pérez-Nordtvedt, and E. Wood. 2010. “Organizational Entrainment and International New Ventures from Emerging Markets.” Journal of Business Venturing 25 (1): 104–19.10.1016/j.jbusvent.2009.01.008Search in Google Scholar
Litz, R. A., and J. M. Pollack. 2015. “Interfirm Rivalry between Small Hardware Stores and “Big Box” Retailers: Market Commonality and Product Mix Similarity as Antecedents to Competitive Response.” Journal of Small Business Management 53 (2): 436–49.10.1111/jsbm.12071Search in Google Scholar
Loch, C. H., K. Sengupta, and M. G. Ahmad. 2013. “The Microevolution of Routines: How Problem Solving and Social Preferences Interact.” Organization Science 24 (1): 99–115.10.1287/orsc.1110.0719Search in Google Scholar
Madhavan, R., and R. Grover. 1998. “From Embedded Knowledge to Embodied Knowledge: New Product Development as Knowledge Management.” Journal of Marketing 62 (4): 1–12.10.1177/002224299806200401Search in Google Scholar
Mittal, V., and W. A. Kamakura. 2001. “Satisfaction, Repurchase Intent, and Repurchase Behavior: Investigating the Moderating Effect of Customer Characteristics.” Journal of Marketing Research 38 (1): 131–42.10.1509/jmkr.38.1.131.18832Search in Google Scholar
Morgan, N. A., S. Zou, D. W. Vorhies, and C. S. Katsikeas. 2003. “Experiential and Informational Knowledge, Architectural Marketing Capabilities, and the Adaptive Performance of Export Ventures: A Cross‐national Study.” Decision Sciences 34 (2): 287–321.10.1111/1540-5915.02375Search in Google Scholar
Morgan, N. A., D. W. Vorhies, and C. H. Mason. 2009. “Market Orientation, Marketing Capabilities, and Firm Performance.” Strategic Management Journal 30 (8): 909–20.10.1002/smj.764Search in Google Scholar
Nelson, R. R., and S. G. Winter. 1982. “The Schumpeterian Tradeoff Revisited.” The American Economic Review 72 (1): 114–32.Search in Google Scholar
Pérez‐Nordtvedt, L., B. L. Kedia, D. K. Datta, and A. A. Rasheed. 2008. “Effectiveness and Efficiency of Cross‐border Knowledge Transfer: An Empirical Examination.” Journal of Management Studies 45 (4): 714–44.10.1111/j.1467-6486.2008.00767.xSearch in Google Scholar
Podsakoff, P. M., S. B. MacKenzie, J. Y. Lee, and N. P. Podsakoff. 2003. “Common Method Biases in Behavioral Research: a Critical Review of the Literature and Recommended Remedies.” Journal of Applied Psychology 88 (5): 879.10.1037/0021-9010.88.5.879Search in Google Scholar
Preacher, K. J., D. D. Rucker, and A. F. Hayes. 2007. “Addressing Moderated Mediation Hypotheses: Theory, Methods, and Prescriptions.” Multivariate Behavioral Research 42 (1): 185–227.10.1080/00273170701341316Search in Google Scholar
Rahman, M., M. A. Rodriguez-Serrano, and M. Hughes. 2020. “Does Advertising Productivity Affect Organizational Performance? Impact of Market Conditions.” British Journal of Management 32 (4): 1359–1383, https://doi.org/10.1111/1467-8551.12432.Search in Google Scholar
Ringle, C. M., S. Wende, and A. Will. 2005. “SmartPLS 2.0 (beta).” Hamburg: University of Hamburg.Search in Google Scholar
Rodriguez, C., J. Wise, and C. Martinez. 2013. “Strategic Capabilities in Exporting: an Examination of the Performance of Mexican Firms.” Management Decision 51 (8): 1643–63.10.1108/MD-10-2012-0766Search in Google Scholar
Salleh, M., and D. Grunewald. 2013. “Organizational Leadership–The Strategic Role of the Chief Exec.” Journal of Leadership, Accountability and Ethics 10 (5): 9–20.Search in Google Scholar
Sarasvathy, S. D., A. R. Menon, and G. Kuechle. 2013. “Failing Firms and Successful Entrepreneurs: Serial Entrepreneurship as a Temporal Portfolio.” Small Business Economics 40 (2): 417–34.10.1007/s11187-011-9412-xSearch in Google Scholar
Shin, K., and L. Pérez-Nordtvedt. 2020. “Knowledge Acquisition Efficiency, Strategic Renewal Frequency and Firm Performance in High Velocity Environments.” Journal of Knowledge Management 24 (9): 2035–55.10.1108/JKM-04-2020-0287Search in Google Scholar
Siemsen, E., A. Roth, and P. Oliveira. 2010. “Common Method Bias in Regression Models with Linear, Quadratic, and Interaction Effects.” Organizational Research Methods 13 (3): 456–76.10.1177/1094428109351241Search in Google Scholar
Sull, D., and S. Turconi. 2008. “Fast Fashion Lessons.” Business Strategy Review 19 (2): 4–11.10.1111/j.1467-8616.2008.00527.xSearch in Google Scholar
Snyder, M. 1974. “Self-monitoring of Expressive Behavior.” Journal of Personality and Social Psychology 30 (4): 526.10.1037/h0037039Search in Google Scholar
Spender, J. C. 1996. “Making Knowledge the Basis of a Dynamic Theory of the Firm.” Strategic Management Journal 17: 45–62.10.1002/smj.4250171106Search in Google Scholar
Sproles, G. B. 1981. “Analyzing Fashion Life Cycles—Principles and Perspectives.” Journal of Marketing 45 (4): 116–24.10.1177/002224298104500415Search in Google Scholar
Tran, Y., S. Zahra, and M. Hughes. 2019. “A Process Model of the Maturation of a New Dynamic Capability.” Industrial Marketing Management 83: 115–27.10.1016/j.indmarman.2018.11.009Search in Google Scholar
Teece, D. J., G. Pisano, and A. Shuen. 1997. “Dynamic Capabilities and Strategic Management.” Strategic Management Journal 18 (7): 509–33.10.1002/(SICI)1097-0266(199708)18:7<509::AID-SMJ882>3.0.CO;2-ZSearch in Google Scholar
Úbeda-García, M., E. Claver-Cortés, B. Marco-Lajara, and P. Zaragoza-Sáez. 2017. “Human Resource Flexibility and Performance in the Hotel Industry.” Personnel Review 46: 824–46.10.1108/PR-12-2015-0315Search in Google Scholar
Úbeda-García, M., E. Claver-Cortés, B. Marco-Lajara, P. Zaragoza-Sáez, and F. García-Lillo. 2018. “High Performance Work System and Performance: Opening the Black Box through the Organizational Ambidexterity and Human Resource Flexibility.” Journal of Business Research 88: 397–406.10.1016/j.jbusres.2017.12.045Search in Google Scholar
Van Den Bosch, F. A., H. W. Volberda, and M. De Boer. 1999. “Coevolution of Firm Absorptive Capacity and Knowledge Environment: Organizational Forms and Combinative Capabilities.” Organization Science 10 (5): 551–68.10.1287/orsc.10.5.551Search in Google Scholar
Villanueva, J., D. Grichnik, J. Brinckmann, and L. Singh. 2019. “Sources of Strategic Flexibility in New Ventures: An Analysis of the Role of Resource Leveraging Practices.” Strategic Entrepreneurship Journal 13 (2): 154–78.10.1002/sej.1313Search in Google Scholar
Weerawardena, J., G. Mort, S. Salunke, G. Knight, and P. Liesch. 2015. “The Role of the Market Sub-system and the Socio-Technical Sub-system in Innovation and Firm Performance: A Dynamic Capabilities Approach.” Journal of the Academy of Marketing Science 43 (2): 221–39.10.1007/s11747-014-0382-9Search in Google Scholar
Winter, S. G. 2003. “Understanding Dynamic Capabilities.” Strategic Management Journal 24 (10): 991–5.10.1002/smj.318Search in Google Scholar
Wright, P. M., and S. A. Snell. 1998. “Toward a Unifying Framework for Exploring Fit and Flexibility in Strategic Human Resource Management.” Academy of Management Review 23 (4): 756–72.10.2307/259061Search in Google Scholar
Zahra, S. A., R. D. Ireland, and M. A. Hitt. 2000. “International Expansion by New Venture Firms: International Diversity, Mode of Market Entry, Technological Learning, and Performance.” Academy of Management Journal 43 (5): 925–50.10.2307/1556420Search in Google Scholar
Zahra, S. A., H. J. Sapienza, and P. Davidsson. 2006. “Entrepreneurship and Dynamic Capabilities: A Review, Model and Research Agenda.” Journal of Management Studies 43 (4): 917–55.10.1111/j.1467-6486.2006.00616.xSearch in Google Scholar
Zolin, R., A. Kuckertz, and T. Kautonen. 2011. “Human Resource Flexibility and Strong Ties in Entrepreneurial Teams.” Journal of Business Research 64 (10): 1097–103.10.1016/j.jbusres.2010.11.026Search in Google Scholar
Zollo, M., and S. G. Winter. 2002. “Deliberate Learning and the Evolution of Dynamic Capabilities.” Organization Science 13 (3): 339–51.10.1287/orsc.13.3.339.2780Search in Google Scholar
© 2020 Walter de Gruyter GmbH, Berlin/Boston
