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Ethics-focused dynamic capabilities: a small business perspective

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  • Richard Arend

Abstract

Our analysis of survey data of US small and medium-sized enterprises (SMEs) explores (1) whether firms have ‘dynamic’ capabilities that change their ethics-focused operational capabilities; (2) what effects those dynamic capabilities have on both ethical and competitive performance; and, (3) whether those effects are contingent on a firm’s entrepreneurial characteristics. Our survey reveals that about a quarter of SMEs self-report high levels of these ethics-focused dynamic capabilities. We use hierarchical OLS to analyze the survey data to find that the general effect of these capabilities is positive on an SME’s ethical performance, and that the performance effects are contingent on an SME’s degree of entrepreneurial orientation and sensitivity to changes in the business context. The main implication is that the extent of heterogeneity in types, roles, and performance effects of ‘higher-than-operations-level’ capabilities is likely underestimated in current dynamic capabilities theory and application. Copyright Springer Science+Business Media, LLC. 2013

Suggested Citation

  • Richard Arend, 2013. "Ethics-focused dynamic capabilities: a small business perspective," Small Business Economics, Springer, vol. 41(1), pages 1-24, June.
    • Handle: RePEc:kap:sbusec:v:41:y:2013:i:1:p:1-24
    DOI: 10.1007/s11187-012-9415-2
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    2. Wohlgemuth, Veit & Wenzel, Matthias & Berger, Elisabeth S.C. & Eisend, Martin, 2019. "Dynamic capabilities and employee participation: The role of trust and informal control," European Management Journal, Elsevier, vol. 37(6), pages 760-771.
    3. Desirée Knoppen & Louise Knight, 2022. "Pursuing sustainability advantage: The dynamic capabilities of born sustainable firms," Business Strategy and the Environment, Wiley Blackwell, vol. 31(4), pages 1789-1813, May.
    4. Alexandra ZBUCHEA & Florina PÎNZARU, 2017. "Tailoring CSR Strategy to Company Size?," Management Dynamics in the Knowledge Economy, College of Management, National University of Political Studies and Public Administration, vol. 5(3), pages 415-437, September.
    5. Krzysztof Malik & Anna Jasińska-Biliczak, 2018. "Innovations and Other Processes as Identifiers of Contemporary Trends in the Sustainable Development of SMEs: The Case of Emerging Regional Economies," Sustainability, MDPI, vol. 10(5), pages 1-17, April.
    6. Tomás F. Espino-Rodríguez & Juan Carlos Ramírez-Fierro, 2019. "Dimensions of behavior and proactive improvement in hotel outsourcing relationships: the role of justice," Service Business, Springer;Pan-Pacific Business Association, vol. 13(3), pages 479-508, September.
    7. Maksim Belitski & Christina Guenther & Alexander S. Kritikos & Roy Thurik, 2022. "Economic effects of the COVID-19 pandemic on entrepreneurship and small businesses," Small Business Economics, Springer, vol. 58(2), pages 593-609, February.
    8. Tomás F. Espino-Rodríguez & Juan Carlos Ramírez-Fierro, 2018. "The Relationship Between Strategic Orientation Dimensions and Hotel Outsourcing and Its Impact on Organizational Performance. An Application in a Tourism Destination," Sustainability, MDPI, vol. 10(6), pages 1-17, May.
    9. Seok‐Beom Choi & Yunting Feng & Junjun Liu & Qinghua Zhu, 2019. "Motivating corporate social responsibility practices under customer pressure among small‐ and medium‐sized suppliers in China: The role of dynamic capabilities," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 26(1), pages 213-226, January.
    10. Aaron J. Staples & Thomas P. Krumel, 2023. "The Paycheck Protection Program and small business performance: Evidence from craft breweries," Small Business Economics, Springer, vol. 61(3), pages 931-956, October.
    11. Leon Guillén & Afcha Sergio & Chu Manuel, 2022. "Research on social responsibility of small and medium enterprises: a bibliometric analysis," Management Review Quarterly, Springer, vol. 72(3), pages 857-909, September.
    12. Bitencourt, Claudia Cristina & de Oliveira Santini, Fernando & Ladeira, Wagner Junior & Santos, Ana Clarissa & Teixeira, Eduardo Kunzel, 2020. "The extended dynamic capabilities model: A meta-analysis," European Management Journal, Elsevier, vol. 38(1), pages 108-120.
    13. Aracil, Elisa & Nájera-Sánchez, Juan-José & Forcadell, Francisco Javier, 2021. "Sustainable banking: A literature review and integrative framework," Finance Research Letters, Elsevier, vol. 42(C).
    14. Wohlgemuth, Veit & Wenzel, Matthias, 2016. "Dynamic capabilities and routinization," Journal of Business Research, Elsevier, vol. 69(5), pages 1944-1948.
    15. Rok Lee, 2021. "The Effects of Smart Factory Operational Strategies and System Management on the Innovative Performance of Small- and Medium-Sized Manufacturing Firms," Sustainability, MDPI, vol. 13(6), pages 1-17, March.
    16. Vallaster, Christine & Kraus, Sascha & Merigó Lindahl, José M. & Nielsen, Annika, 2019. "Ethics and entrepreneurship: A bibliometric study and literature review," Journal of Business Research, Elsevier, vol. 99(C), pages 226-237.
    17. Anna Remišová & Anna Lašáková, 2019. "Are Slovak Smes Ready To Take Responsibility For The Development Of Business Ethics?," Economy & Business Journal, International Scientific Publications, Bulgaria, vol. 13(1), pages 161-174.
    18. Stav Fainshmidt & Amir Pezeshkan & M. Lance Frazier & Anil Nair & Edward Markowski, 2016. "Dynamic Capabilities and Organizational Performance: A Meta-Analytic Evaluation and Extension," Journal of Management Studies, Wiley Blackwell, vol. 53(8), pages 1348-1380, December.

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    More about this item

    Keywords

    Ethics; Dynamic capabilities; SMEs; CSR; Entrepreneurship; Performance; Dual role; D22; L26; M13; M14;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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