Dynamic Capabilities and Growth of Small and Medium Tourism Enterprises during the COVID-19 Pandemic: The Role of Organisational Innovation

Abstract

The purpose of this research is to investigate the influence of dynamic capabilities on the growth of small and medium tourism enterprises (SMTEs) as well as the mediating effect of organisational innovation on the relationship between dynamic capabilities and business growth. Empirical evidence based on a survey conducted on a sample of 250 Zimbabwean SMTEs was used to test the study’s hypotheses. The findings illustrate that sensing, integrating and reconfiguration capabilities play a significant role in the growth of SMTEs, and that organisational innovation mediates the impact of dynamic capabilities on firm growth. This study demonstrates the benefits of understanding the relationship between the three types of dynamic capabilities, organisational innovation, and firm growth. The research offers managers insight into the aspects on which to focus their efforts to enhance their firm’s capacity to grow. While most of the prior studies have conceptually investigated the financial performance of uni-dimensional dynamic capabilities of large firms in the manufacturing sector, this study made a significant effort to quantitatively examine both the financial and non-financial growth potential of SMTEs in the tourism sector through three forms of dynamic capabilities.

Keywords

• dynamic capabilities
• sensing capability
• integration capability
• reconfiguration capability
• organisational innovation
• firm growth