The moderating role of the business environment in the relationship between growth strategies and value creation by SMEs

Abstract

This paper studies the influence of the business environment on the relationship between growth strategies and value creation in Congolese SMEs. It brings together theories of contingency, resources and dynamic capabilities which emphasize that value creation does not only results from internal initiatives but also depends on the characteristics of the external environment in which SMEs operate. The study is based on an interpretative qualitative approach based on four cases of Congolese SMEs located in Kinshasa. The speeches collected using a semi-structured interview guide were processed hermeneutically by combining them with lexical analysis by occurrence. The results revealed that a hostile environment characterized by institutional instability, tax pressure and corruption, limits the impact of growth strategies on value creation in the SMEs studied. On the other hand, a dynamic environment, rich in opportunities, acts as a catalyst provided that the SMEs concerned adequately mobilize internal resources. Results that confirm the selective nature of the business environment to moderate the effects of growth strategies on value creation. The study encourages SME managers to transform environmental challenges into sustainable opportunities for innovation. This paves the way for future research that will have to focus on a large sample of SMEs and choose mixed methods for greater robustness and generalizability of the results.

Keywords: SMEs; strategies; value creation; business environment; moderating role; innovation; governance

JEL classification: M21, L25, L26, O16

Paper type: Empirical research