Exploring the Nexus of Strategic Flexibility, Innovative Behavior, and Business Performance in SMEs: A Quantitative Investigation with a Focus on Innovative Behavior as a Mediator

Abstract

This study seeks to explore the interconnection among strategic flexibility, innovative behavior, and business performance within SMEs, focusing on the mediating role of innovative behavior. Employing a quantitative approach with a causal design, data collection involved surveys distributed to 130 senior managers of SMEs in East Java through cluster random sampling. Findings reveal that strategic flexibility positively influences both innovative behavior and business performance significantly. Moreover, innovative behavior serves as a mediator in the relationship between strategic flexibility and business performance. Nonetheless, limitations include cautious generalization due to the regional sample limitation to East Java and potential biases or inaccuracies from questionnaire usage. The practical implication underscores the significance of fostering strategic flexibility and an innovation culture within SMEs. Theoretically, this study enhances comprehension of the nexus among strategic flexibility, innovative behavior, and business performance in SMEs. Its notable contribution lies in furnishing empirical evidence supporting this relationship and uncovering the novel insight of innovative behavior's mediating role therein.