Influence of Organizational Capability on Competitive Advantage in Small and Medium Enterprises (SMEs)

• Main Authors: Sarminah Samad, Nurul Nadia Abdul Aziz, Junainah Jaidi and Yas
• Format: Article
• Language: English
• Published: Medwell Journals 2016
• Subjects: HD Industries. Land use. Labor; HD58.7-58.95 Organizational behavior, change and effectiveness. Corporate culture
• Online Access: https://eprints.ums.edu.my/id/eprint/21820/1/Influence%20of%20Organizational%20Capability%20on%20Competitive%20Advantage%20in%20Small%20and%20Medium%20Enterprises%20%28SMEs%29.pdf; https://eprints.ums.edu.my/id/eprint/21820/
• Institution: Universiti Malaysia Sabah

Previous studies have revealed that various factors have been linked to competitive advantage. Competitive advantage is one of the important topic to be addressed as it able to create value of customers and increase organizational performance. This ability will help organization to sustain its product position in the market. Though some studies have related competitive advantage with organizational capability factor, less research has been carried on processed food Small and Medium Enterprises (SMEs) in Malaysia. The aim of this study was to examine the influence of organizational capability (quality relationship and financial capability) on competitive advantage of processed food SMEs in Malaysia. The study constructs a Structure Equation Model (SEM) to answer the hypotheses and objectives of the study. Data in the study was collected from a sample of 110 processed food SMEs industry in Malaysia. The obtained data were analyzed using SPSS and Amos Version 22. Descriptive and inferential statistics were employed to answer the objectives and hypotheses of the study. Through an empirical test of the processed food SMEs in Malaysia, this study draws the following conclusions or results:quality relationship has a positive influence on competitive advantage; financial capability has a positive influence on competitive advantage; organizational capability has a positive significant contribution on competitive advantage and quality relationship has more influence than financial capability on competitive advantage. Findings from this study serve as a guideline in business activities to strengthen the competitive advantage of SMEs industry.Findings, implications and recommendations for future research from this study are discussed.