Linking managerial competence to small enterprise performance within the dynamic capability logic

Purpose: The purpose of this paper is to link management competence to small enterprise performance and assess the role of entrepreneurial orientation (EO) and willingness to change on this relationship. Design/methodology/approach: The authors use structural equation modeling to test a theoretical model based on a data set from two survey instruments: one instrument was administered to the owners of 125 small enterprises within the United Arab Emirates and the second was administered to managers within the same enterprises. Findings: Results show that within the small enterprise setting, managerial competence indirectly influences performance by influencing EO and willingness to change plays a partial mediating role through which EO benefits performance. Research limitations/implications: The case for linking managerial competence to performance is supported by the dynamic capability logic, which maintains that an enterprise’s advantage lies in its ability to reconfigure its resources, capabilities and routines appropriately in the pursuit of new opportunities and performance benefits. The study suggests that EO plays a pre-eminent role in developing dynamic capability. Practical implications: Understanding the link between managerial competence and small enterprise performance has important implications for enterprise owners, investors, educators, researchers and policy makers. Originality/value: The model is a valuable contributor to understanding the dynamic capability perspective within a small enterprise and adds to the growing body of research examining the ability of small enterprises to continuously recognize and exploit new opportunities for sustainable competitive advantage.