Enhancing SMEs' Growth by Investing in Organizational Capital

Abstract

Objective: The objective of this paper is to verify the relationship between the share of investments in organizational capital (OC) within the total amount of investments and key performance indicators of SMEs.

Research, Design & Methods: Quantitative research based on the author’s theoretical model and was conducted on a group of 180 Polish SMEs with the use of a structured questionnaire. To verify the hypothesis measures of dispersion as well as correlation were used.

Findings: The share of investments in OC vary at particular growth stages and the highest is in decline stage. Investigated firms invest mostly in 'brand' and 'IT systems'. Investing in OC seems to be important mostly for SMEs that are in the prime stage. In this stage the share of investments in OC is correlated with almost all performance indicators. It suggests that OC can be treated as a source of competitive advantage and firms’ performance.

Implications & Recommendations: The appropriate share of investments in particular resources positively impact the effectiveness of decisions aimed at enhancing SMEs growth. Guidelines in what to invest help managers to plan their activities, especially while operating in a rapidly changing environment.

Contribution & Value Added: The study contributes to the stream of research devoted to SME growth factors. Despite the fact that there already are publications on the impact of particular resources on organisations’ success or failure, complex studies, including those concerning Polish SMEs, are much needed.

Keywords

SMEs, small and medium-sized enterprises, growth models, organiza-tional capital, investments, resources

Author Biography

Urban Pauli

Department of Human Capital Management, adjunct

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