Does Being Resourceful Lead to Better Performance? The Essential Role of Customer Responsiveness Capability

Abstract

Despite their substantial contribution to economic growth, small and medium enterprises (SMEs) in developing countries face significant resource scarcity that undermines their financial and market performance. Entrepreneurial bricolage, a novel recombination of available resources, emerges as an effective strategy through which SMEs navigate constraints. Though the connection between entrepreneurial bricolage, market orientation, and performance get scholars attention, our understanding of the mediating process of translating bricolage into customer value creation and performance is limited. Rooted in the RBV, customer responsiveness capability, the competence to provide timely customer solutions, has been associated with large companies enjoying strategic resources. This study examined whether entrepreneurial bricolage predicts customer responsiveness capability and ultimately leads to performance. Using a stratified random sampling, we selected 290 SMEs operating in Ethiopia. We collected primary data from owners using a standardized questionnaire between August 2022 and February 2023. Data analysis was conducted using structural equation modeling with Jamovi. The results demonstrate that entrepreneurial bricolage improves an SME's ability to respond to customers, even though bricolage itself has a negative direct effect on performance. However, when customer responsiveness serves as a mediator, it transforms the relationship, leading to an overall positive effect on performance. Therefore, we found competitive mediation in the entrepreneurial bricolage, customer responsiveness capability, and performance relationships. Entrepreneurial bricolage is, thus, a "double-edged sword." It results in positive outcomes when firms convert it into quick customer solutions. Contrary to the widely held belief, bricolage is detrimental to performance if firms lack the competence to respond to customer needs.