Resource reconfiguration by surviving SMEs in a disrupted industry

Abstract

This paper investigates the strategies employed by surviving small and medium sized enterprises (SMEs) in a technologically disrupted industry facing continuous market decline. Using fuzzy-set qualitative comparative analysis, we discover multiple strategy combinations utilized by survivors to grow. Key findings suggest firms utilize ambidexterity, absorptive capacity, and agility to reconfigure their internal resources and reduce their reliance on the declining external network. This process increases self-reliance and returns higher rates of growth. These findings run counter to extant research which suggests increased network integration is a way for SMEs to overcome resource limitations. We attribute this difference to the context of firms operating in disrupted, declining markets. This study contributes to research on dynamic capability theory, warning against an over-reliance on external resources in a declining market and in doing so it provides practical paths for growth for SMEs facing disruption.