Organizational learning as a repercussion for firm's success: a study on SMEs

Small and Medium Enterprises (SMEs) are forced to find ways to survive in the current competitive business environment via its available resources. One important question that requires an immediate answer is how to optimize the firm resources so that it can achieve more success in years to come. On this ground, this study focuses on the Malaysian SMEs by suggesting a theoretical and practical approach towards enhancing their performance. Despite billions of Malaysian Ringgit spent by the government, the impact on SMEs’ performance is still unimpressive, thus, motivating this study. Using a non-financial approach to measure SMEs’ performance; the relationship between a firm’s resources, namely production technology, staff training, and networking application towards SMEs’ performance are studied. In addition, organizational learning is introduced as a mediator between a firm’s resources and SMEs’ performance. The population of this study consists of Malaysian SMEs in the manufacturing industry. This study employs a quantitative research method where 152 questionnaires were used for data analysis. The relationships between variables were tested using Partial Least Squares-Structural Equation Modeling (PLS-SEM) software. The result shows that staff training and networking application have a significant relationship with SMEs’ performance and both variables are mediated by organizational learning to SMEs’ in Malaysia. Thus, the Malaysian SMEs’ performance is highly dependent on staff training and networking application that suit the current business environment. It is suggested that SMEs should take advantage of any opportunity that might help them to intensify networking and provide a relevant training for staff, which is in line with the current needs of SMEs. The findings of this study are expected to provide valuable insights for SMEs, the government, and stakeholders, in formulating better business strategies. In addition, it provides a basis for SMEs to develop their strategic planning and implementing actions that may help them to achieve their desired goals. Since this is a quantitative based study, future researchers may embark on a qualitative study as it may provide more valuable insights into SMEs’ performance