Internationalization Performance Of Thai Textile And Garment Smes: The Role Of Organizational Capabilities

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Date
2016-03
Authors
Paochoo, Rapeepan
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Universiti Sains Malaysia
Abstract
Small and Medium Enterprises (SMEs) is a core driver of a nation economy. However, some small businesses could not maintain superior performance in foreign marketplaces. Organizational capabilities are considered as a critical factor to achieve desired performance as propagated by resource-based theory. The study aims to investigate the effects of four organizational capabilities (i.e., marketing, networking, innovation, and management capabilities) on internationalization performance of textile and garment SMEs in Thailand. Moreover, the antecedents of organizational capabilities are examined namely international entrepreneurial orientation (IEO) and sufficiency economy philosophy (SEP). Strategic flexibility is treated as a moderating variable on the linkages between four organizational capabilities and internationalization performance. Data were collected from 113 owners/managers of exporting SMEs in textile and garment industry. PLS-SEM technique was utilized for data analysis. The findings of the study revealed that IEO and SEP are significantly related to organizational capabilities. Two kinds of capabilities, which are networking and management capabilities, have positive effects on internationalization performance. Besides that, the moderating role of strategic flexibility on the linkages between four organizational capabilities and internationalization performance was found to be non-significant. Hence, it is recommended that SME owners/managers need to instill IEO and SEP into the companies in order to develop their organizational capabilities of firms and then grasp business success in international markets.
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Marketing
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