The Influence of Dynamic Capabilities and Strategic Leadership on SMEs Performance in Emerging Markets

The performance of SMEs represents an interesting topic in the literature and the branch dedicated to emerging economies is still underdeveloped. In the context of business performance management, the focus should be on different mechanisms that generates competitive advantage for this type of business. Nowadays in many organizations, employees waste hours searching for information and strategies they need to gain competitiveness and to obtain performance. Competitive advantage is related to the resources that organizations hold and how they are managed to generate performance. The creation of a competitive advantage using a competitive strategy involves resources, capabilities, core competencies and a good strategic leadership. Dynamic capabilities increase the performance of SMEs through its internal competencies which are connected to innovative strategies that are flexible to market changes. The dynamic capabilities are managed by top management teams that focus on strategic changes, innovation and SMEs performance. Elements of strategic leadership such as strategic direction, resources, organizational culture, ethical practices and also a control system represent the key for a modern performance management. The aim of this paper is to emphasize the influence of dynamic capabilities on performance and the importance of strategic leadership as a source of competitive advantage through a performance management in a turbulent business environment.