The fit between firm capability and business model for SME growth: a resource orchestration perspective

Despite the increasing attention on the role of the business model in affecting firm performance, knowledge of how to leverage the influence of business models remains scarce. Drawing on resource orchestration theory, we theorize how firm capabilities, such as technology capability and marketing capability, moderate the relationship between the business model and firm performance in the context of small and medium-sized enterprises (SMEs). Matched survey data and objective performance data were collected from 140 Chinese manufacturing SMEs in two waves to test our model. The results reveal that the interaction of the efficiency-centered business model with technology capability and the interaction of the novelty-centered business model with marketing capability both positively impact SME performance. Theoretical and practical insights on how firm capabilities can leverage the performance impact of business models are discussed.