The Role of Dynamic Cloud Capability in Improving SME’s Strategic Agility and Resource Flexibility: An Empirical Study

Abstract

This research explores how the cloud’s technological capability helps small and medium enterprises (SMEs) adapt to challenging business environments, providing long-term sustainability and strategic agility. The article uses a theoretical and quantitative empirical approach, known as the positivist research paradigm, in offering a unique capability called dynamic cloud capability that leverages the cloud’s technological capabilities. Based on the quantitative analysis of 222 Australian Information and Communication Technology (ICT) SMEs, dynamic cloud capability favourably improves the flexible allocation of resources (resource fluidity) and the ability to adapt business models (strategic agility). Additionally, because of the successful mediating effect of resource fluidity, it is inferred that dynamic cloud capability allows for the flexible allocation of resources leading to improved strategic agility. Hence, adopting dynamic cloud capability in an organisation’s strategy would be particularly appealing to ICT SMEs as it has been verified to enhance adaptability to a challenging business environment and flexible allocation of resources.