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Enterprise’s Strategic Agility and Resource Allocation Choice: A Case of SMEs in China

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  • Xiangsheng Dou

    (Southwest Jiaotong University)

  • Fizza Ishaq

    (Southwest Jiaotong University)

Abstract

Enterprises must optimize resource allocation to achieve their strategic objectives in the context of international competition. This paper proposes a comprehensive index to measure the strategic agility of small and medium-sized enterprises (SMEs) using the basic data of online surveys based on multiple indicators and Likert scale. Then, the paper constructs an econometric model to conduct empirical analysis with representative sample data from the SEMs in the computer, communication, and other manufacturing industries in China. The paper demonstrates the nature and measurement of strategic agility and the matching of resources with strategic agility and advances a theoretical framework that enterprises’ strategic agility determines the joint allocation of non-financial resources to support strategies. The results indicate that enterprises must jointly allocate their resources according to their strategic agility, only in this way can they achieve their strategic goals and outperform their competitors. The paper further develops the concept and idea of strategic agility level zone of effective zone, inert zone, and hyper-power zone, so that enterprises may adopt different strategic decision-making based on different zones. The paper contribute to the literature on interdependencies between strategic agility and resource allocation.

Suggested Citation

  • Xiangsheng Dou & Fizza Ishaq, 2025. "Enterprise’s Strategic Agility and Resource Allocation Choice: A Case of SMEs in China," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 16(1), pages 2229-2248, March.
    • Handle: RePEc:spr:jknowl:v:16:y:2025:i:1:d:10.1007_s13132-024-02046-0
    DOI: 10.1007/s13132-024-02046-0
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