Managerial Innovation and Competitiveness Dynamics of SMEs in Morocco: A Structural Equation Modeling Approach

Abstract

Managerial innovation is a multidimensional concept referring to the introduction of new management practices, processes, structures, or techniques aimed at improving firms’ performance, competitiveness, and sustainability. Although managerial innovation has attracted growing attention in the strategic management literature, its organizational determinants have rarely been examined jointly, particularly among small and medium-sized enterprises (SMEs) in developing countries such as Morocco. This study seeks to address this research gap.

The study investigates three determinants of managerial innovation: market orientation, organizational learning, and absorptive capacity. Using structural equation modeling, it examines their effects on managerial innovation, competitive advantage, financial performance, and the long-term survival of Moroccan SMEs.

Of the 150 Moroccan firms contacted, 76 provided complete responses and were retained for partial least squares structural equation modeling (PLS-SEM). The findings highlight the importance of managerial innovation in strengthening SMEs’ competitive advantage (β = 0.827; p < 0.001), which, in turn, positively affects their financial performance (β = 0.705; p < 0.001). Specifically, the results indicate that Moroccan SMEs achieve better financial performance when they possess a strong competitive advantage. Competitive advantage also partially mediates the relationships between managerial innovation and financial performance and long-term survival, with variance accounted for (VAF) values of 20% and 25.77%, respectively. This research thus sheds light on the essential role of managerial innovation in enhancing the competitiveness and economic success of Moroccan SMEs.

JEL Classification: M10; O31; L25

Paper type: Empirical research article