The influence of strategic flexibility on SME performance: is business model innovation the missing link?

Purpose The purpose of this paper is to investigate the influence of strategic flexibility on small and medium enterprises (SMEs) performance, and how such effects are mediated by business model innovation (BMI). Design/methodology/approach Data was collected in the form of surveys from 200 SMEs located in Saudi Arabia. The collected data were analyzed with structural equation modeling using Amos 23. Findings The results highlighted that strategic flexibility has a direct and significant influence on SME performance. Moreover, BMI partially mediates the relationship between strategic flexibility and SME performance. Research limitations/implications The findings of this study suggest that managers should be made aware that strategic flexibility can be an important driver for BMI which in turn would enhance SME performance. This study argues that the perks of strategic flexibility are irrespective of firm size. Furthermore, BMI can help improve the performance of SMEs by unlocking new opportunities for value creation and value capture Originality/value To the best of the author’s knowledge, this study is one of the first to test the relationship between strategic flexibility and SME performance through BMI.