AN INTEGRATED STRATEGIC MANAGEMENT FRAMEWORK FOR ENHANCING SME PERFORMANCE: THE ROLES OF STRATEGIC ORIENTATION, COST LEADERSHIP, AND OPEN INNOVATION
Abstract
The effective incorporation of strategic capacities is vital for the continuity of the organization, in the context of small and medium enterprises (SME) that are always under resource constraints, competitive pressure and technological changes. This study aimed to evaluate an integrated strategic management framework by examining the relative effects of strategic autonomy, competitive aggressiveness, cost leadership, open innovation, proactiveness, and risk taking on SME performance. A quantitative cross-sectional design was applied to secondary data from 283 Malaysian SMEs. Each construct was measured using five questionnaire items and represented by composite mean scores. Reliability analysis, descriptive statistics, Pearson correlation, multicollinearity diagnostics, and multiple linear regression with HC3 heteroscedasticity-robust standard errors were employed. All constructs demonstrated acceptable internal consistency, with Cronbach's alpha values ranging from 0.703 to 0.896. The regression model was statistically significant and explained 47.9% of the variance in firm performance. Cost leadership emerged as the strongest predictor, followed by proactiveness and strategic autonomy, whereas competitive aggressiveness, open innovation, and risk taking did not exhibit significant independent effects after adjustment. The findings indicate that SME performance is enhanced primarily through operational efficiency, proactive market behaviour, and managerial autonomy. Organizational benefits seem to be more pronounced for innovation-oriented and risk-based approaches when these approaches are accompanied by effective internal integration and implementation mechanisms and are suggested as practice-proof guidance for managers to strengthen their long-term competitiveness.
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