Abstract

Several studies have explored firm performance in the post-Covid-19 pandemic era. However, there is not much research to find reports divulging the complex relationship dynamics between business intelligence, organizational and network learning, customer value anticipation, and creative economy-based small-medium enterprises (SMEs) performance in developing countries. This study aims to uncover the complexity of those relationships. The quantitative data were collected from 313 creative economy-based SMEs in East Java, Indonesia. Using PLS-SEM, this study disclosed that business intelligence practices could not directly impact SMEs’ performance. Business intelligence will be crucial to SMEs’ performance with the support of organizational learning as a mediator. The finding also confirmed the presence of serial mediation of organizational learning and innovation in the relationship between business intelligence and SMEs’ performance. However, the role of network learning and innovation is also important, considering their relatively large direct impact on SMEs’ performance. The theoretical implications of this research broke the boundaries of strategic management theory in resource-based view and knowledge-based view in the latest era, where creative economy-based SMEs have been able to mobilize resources to carry out business intelligence to realize innovation and high performance. Further research is suggested to explore the role of business intelligence in promoting specific performance areas, such as marketing performance, financial performance, and human resource management. In addition, it is advisable to choose more specific research subjects, including those in the culinary subsector, and pay attention to other areas, e.g., the demographics of respondents in the model as a control variable.

Introduction

The performance of small-medium enterprises (SMEs) in the post-pandemic era of Covid-19 has been in the spotlight of many scientists, e.g. Ref. [1] highlighted the declining performance of 273 SMEs at the company level operating in commercial, manufacturing, service, or construction industries in certain geographical areas in Finland due to a competitive mindset contaminated by high-performance growth aspirations [2], examined the impact of identity-based entrepreneurial passion on the performance of 193 established SMEs in Ghana [3], identified the mediating role of green product innovation between green entrepreneurial orientation, green transformational leadership, and the performance of 384 manufacturing SMEs operating in Amman, Jordan [4], discussed the export performance of 329 SMEs in Vietnam and how they are developing their internal skills to face external challenges arising from the digitalization process and the COVID-19 crisis [5], analyzed the role of learning in an organization while measuring and managing the sustainable performance of 710 manufacturing sector SMEs operating in Laos [6], examined the impact of international resources on the sustainable performance of 380 Pakistani SMEs through the mediating role of green entrepreneurial orientation [7], tested the influence of organizational creativity and open innovation on the performance of 206 SMEs spread across several regions in Indonesia., and [8] explored how 247 Vietnamese SMEs can leverage information technology (IT) to overcome crises, exploit innovative opportunities, adapt to changing market conditions, and drive new competitive initiatives. This is due to the prominent role of creative economy-based SMEs as the drivers of economic growth in Indonesia and other countries [9]. East Java is no exception; one of the regions contributing 14.92% of Indonesia’s national gross domestic product (GDP) [10]. This province has much potential in the creative economy sector, which is supported by 113 startups [11,12] to face the turbulent business environment as a result of accelerating digital transformation [13] during the Covid-19 pandemic. The number of creative economy-based SMEs will continue to grow, even from the activities of homemakers who are familiar with digital literacy and the ease of doing business today [14].

Conclusion

This research has attempted to investigate the link between business intelligence, organizational learning, network learning, customer value anticipation (CVA), innovation, and creative economy-based SMEs performance in East Java of Indonesia. The findings indicate that business intelligence does not directly impact SMEs’ performance because the data generated from business intelligence practices needs to be integrated into knowledge that must be learned through organizational learning. If this is offset by CVA, it will give birth to innovations that ultimately impact SMEs’ performance. Hence, even though the impact of serial mediation network learning and innovation presence on the relationship between business intelligence and performance is not supported by field data in this study, network learning still need attention to improve SMEs’ performance. The theoretical implications of this research break the boundaries of strategic management theory resource-based view (RBV) and knowledge-based view (KBV) in the latest era, where creative economy-based SMEs in developing countries have been able to mobilize resources to carry out business intelligence, even though in a simple way, to realize Innovation and high performance.

The limitation of this research is that it has yet to explore the causes of the insignificant effect of network learning on innovation. Thus, future research can conduct qualitative studies to obtain more in-depth information regarding the relationship between network learning with Innovation. In addition, this research still uses economy creative-based SMEs as samples, while future research is recommended to involve specific samples, for example, in the culinary sector only, the sector with the highest number in East Java. Researchers can also pay attention to other provinces, such as West Java, which has the largest creative economy exports in Indonesia. Further scholars are also expected to explore the role of business intelligence in more specific performance areas, such as marketing performance, financial performance, and human resource management, and include the demographics of respondents in the model as a control variable. The data distribution in PLS-SEM analysis is only possible to assess statistical significance using the Bootstrapping technique.

Abstract

We test whether firm sustainability positively affects access to bank credit. We carry out a panel data analysis of 125 listed Italian SMEs across 14 regions over 2017–2021. A quantitative score comprising 20 items grouped into three areas, disclosure, processes, and governance, is computed to determine the level of implementation of sustainable practices of sampled SMEs. Results show that SMEs with more sustainable orientation have greater access to bank credit and better ability to pay the cost of bank debt. This, in turn, reinforces bank-SME relationships. We contribute to the literature on SMEs, highlighting the relationship between sustainability and the availability of bank loans.

Introduction

Starting from the notions of sustainable development in the Brundtland Report published by the World Commission on the Environment in 1987 (WCED, 1987), further attention on sustainability has increased, culminating in several important initiatives such as the Paris Climate Agreements (COP 21) and the 2030 Agenda of the United Nations for Sustainable Development, both adopted in 2015. More recently, specific activities and regulations implemented by the European Union, including the EU Taxonomy and the European Green Deal, provide additional support for the green transition and integration of sustainability into company business models (BIS 2021).

From the perspective of banks, financial regulators are strengthening regulations in an attempt to encourage these institutions to support and promote sustainability practices. Recently banking supervisors have launched important appeals and recommendations to raise awareness on the potential effects of environmental risk, improve the understanding of climate risk measurement issues facing banks and on transitioning to a low-carbon and more circular economy. Specifically, increasing pressure is being exerted on all EU banks to integrate sustainability factors into the lending decision-making processes. In turn, increased commitment to climate issues could lead banks to develop a more effective environmental management system and environmental credit risk management which mediates bank riskiness and improves overall financial stability (EBA – European Banking Authority, 2020a, EBA – European Banking Authority, 2020b).

Conclusions, implications and future research lines

The ‘sustainability challenge’ represents a global issue that affects all companies, whether financial or non-financial, especially following the Covid-19 pandemic. Falling behind in this process of adaptation not only means losing a competitive advantage but also risking being pushed out of the marketplace altogether. This is true for banks, which are now being asked by regulators to rearrange all their main business processes (e.g., strategies, risk management, capital allocation, loan origination and monitoring, disclosure), adapting them to comply with specific ESG sustainability criteria. It is even more true, however, for non-financial firms, especially SMEs. These firms are a pillar of the European economy and a central player in value chains and community dynamics (Beck, 2013; Gomes and Pinho, 2023; Angilella and Mazzù, 2015). Thus, involving them in the sustainability process is vital to ensuring the success of the transition to sustainability in Europe. In addition, for SMEs, being included in the sustainability agenda is paramount to accessing key resources and opportunities, obtaining better financial conditions and entering into important partnerships (European Investment Bank-EIB, 2023).

Scholars have revealed that an increasing number of banks are starting to include ESG factors in their lending decisions (Scholtens, 2009, Goss and Roberts, 2011). Many financial intermediaries, facing the threats generated by ESG risks, tend to prefer lending to businesses that are more sustainable and, therefore, less risky (Weber, 2012). Academic research shows that this strategy is virtuous because granting credit to more sustainable companies creates value for banks in terms of a higher net interest margin and a reduction in default risk (Mirza et al., 2023). For these reasons, banks are also increasing their share of green operations by offering capital at lower cost to firms more compliant with environment goals (Attig et al., 2013, El Ghoul et al., 2018, Wellalage and Kumar, 2021).

Abstract

Machine learning can be effectively used to generate models capable of representing the dynamic of production processes of small and medium-sized enterprises. These models enable the estimation of key performance indicators, and are often used for optimizing production processes. However, in most industrial applications, modeling and optimization of production processes are currently carried out as separate tasks, manually in a very costly and inefficient way. Automated machine learning tools and frameworks facilitate the path for deriving models, reducing modeling time and cost. However, optimization by exploiting production models is still in infancy. This work presents a methodology for integrating a fully automated procedure that embraces automated machine learning pipelines and a multi-objective optimization algorithm for improving the production processes, with special focus on small and medium-sized enterprises. This procedure is supported on embedding the generated models as objective functions of a reference point based non-dominated sorting genetic algorithm, resulting in preference-based Pareto-optimal parametrizations of the corresponding production processes. The methodology was implemented and validated using data from a manufacturing production process of a small manufacturing enterprise, generating highly accurate machine learning-based models for the analyzed indicators. Additionally, by applying the optimization step of the proposed methodology it was possible to increase the productivity of the manufacturing process by 3.19 % and reduce its defect rate by 2.15 %, outperforming the results obtained with traditional trial and error method focused on productivity alone.

Introduction

Nowadays, generalized adoption of the new manufacturing paradigms involves the assimilation of key technologies such as intelligent data analysis and machine learning (ML), among others, aiming at the digital transformation of enterprises [ 46 , 56 ]. This digital transformation is crucial to keep up with the competition, especially in the case of small and medium-sized manufacturing enterprises (SMEs). One contemporary target is to create a highly reconfigurable, decentralized, dynamic, self-organizing, and real-time (or near real-time) decision-making infrastructure enabling to analyze customer expectations and reach their targets [ 20 ]. By applying these transformations, SMEs should be capable of monitoring and improving their key performance indicators (KPIs) [ 67 ]. However, in practice, SMEs face several difficulties in applying these technologies, mostly related to the transition and maintenance costs, innovation complexity, and personnel training [ 50 ]. Additionally, due to limited human and computational resources, time constraints and complexity of the optimization processes, SMEs usually focus their efforts on a single productivity objective, despite being more desirable to consider and optimize multiple objectives, which leads not only to more efficient but also a more sustainable and environmentally friendly production. Due to these obstacles, a large number of SMEs don’t count yet with the necessary tools to continue with their digital transformation. In this context, the development of tools for generating useful information and smart recommendations of production systems in SMEs is almost mandatory in a high-competitive market and has a large number of potential adopters [ 12 , 42 ].

Conclusions

This work presents an automated machine learning methodology for optimizing manufacturing processes in SMEs by combining the standard tasks of AutoML tools, such as data preprocessing, feature selection, model training, and hyperparameter optimization, with preference-based multi-objective optimization. For this purpose, the basic AutoML workflow is used to generate models for each of the KPIs of the production process and, then, a new automated optimization step is introduced for using the generated models as objective functions, resulting in optimal parametrizations of the production process. By simplifying the way of interacting with this methodology, it is possible that manufacturing SMEs with low availability of highly-skilled personnel or limited computing power can benefit from advanced technologies making easier the digitalization and application of Industry 4.0 paradigm.

The methodology was implemented and validated in a production process where, firstly, the most relevant features for modeling each key performance indicator were automatically selected based on the Pearson’s correlation coefficient, allowing to reduce the dimensionality of the data. Then, models of key performance indicators were generated and their architecture/hyperparameters optimized. Generated models were compared to models obtained through other AutoML frameworks offering similar results, with values of MSE = 2.585 and R2 = 0.999, and MSE = 6 × 10−5 and R2 = 0.735, respectively. Finally, the models were used as objective functions in the R-NSGA-II algorithm for finding optimal parametrizations of the production process, yielding an improvement in both KPI, reducing scrap by 2.15 % and increasing throughput by 3.19 %, with regard to the baseline of conventional parametrization considering only a single productivity target. These improvements contribute to a higher production rate while, at the same time, the number of defective components is reduced, which underscore the potential of the proposed methodology to significantly boost overall efficiency and profitability for SMEs by optimizing their production processes more holistically.

Abstract

Artificial intelligence (AI) and other advanced technologies are increasingly recognized as essential catalysts for enhancing productivity due to their capability to transform nearly all operations within and outside firms. However, the empirical research on how AI assimilation may promote firm-level outcomes such as absorptive capacity (AC), customer agility (CA), and firm performance (FP) is still in its infancy. Drawing from the dynamic capability view and using 417 valid responses collected through cross-sectional methods from small and medium-sized enterprises (SMEs) in Lebanon, this study examines the effect of AI assimilation on firm performance. The mediating roles of AC and CA were investigated. The moderating role of organizational agility (OA) was also explored. The findings support the hypothesized assumptions that continual advancement of technology evolves the industrial organizations’ performance with CA and AC as parallel mediators, partially mediating the link between AI assimilation and FP and OA as a moderator, moderating the positive relationship between AI and CA and between AI and FP. The findings provide crucial insights for practitioners and advance the dynamic capability view framework. They provide compelling evidence that enriches the understanding of AI assimilation, demonstrating its positive impact on critical organizational outcomes and yielding performance benefits for SMEs.

Introduction

The modern era requires modern solutions, and existing businesses are deploying technologies to meet customers’ expectations [1]. Customers want quick responses, which necessitates the use of fast-moving systems and responsiveness. From this standpoint, firms are introducing AI technologies to establish a CA system that can quickly respond to an ever-changing business environment. Through such technologies, firms can improve problem-solving abilities, boost productivity and efficiency in customer service and other fields [2], and improve their performance and productivity [[3], [4], [5], [6], [7], [8], [9]].

The use of AI technology to assist organizations in attaining and maintaining a competitive edge relies on the complete assimilation of such technology throughout business processes [10]. This is due to IT assimilation’s crucial role in enabling end-to-end business operations to develop and maintain business value [10,11]. Existing literature has acknowledged that it can be counted on to enhance organizational performance [12] and foster supply chain agility and business value [13]. However, most of the existing literature focuses on only two facets of assimilation: the crucial factors of assimilation [10,14] and IT-based outcomes [10,15].

Conclusion, limitations, and future research

6.1. Conclusion
This article contributes to emerging studies on AI at the organization level by examining the effect of AI assimilation on FP, which so far has received limited attention, particularly in the context of developing economies, which remains under-researched, calling into question the generalizability of the findings and theories in this research area. Our study is an initial effort to address this issue. This study also offers insights into the mediating role of CA and AC on the link between AI assimilation and FP. We found that OA moderates the link between AI assimilation and CA and AI assimilation and FP in the SME context.

6.2. Limitations and directions for future research
This article has some limitations that future studies should take note of. First, the sample obtained is limited to SMEs in Lebanon because of cultural and technological disparities between nations; the conclusion of the present research may not be generalizable to other nations. Hence, future research should collect data from multi-cultural nations to boost the generalizability of the findings. Second, a complimentary qualitative or longitudinal study that gives more information about the causal relationship between AI assimilation and FP via CA could enhance our understanding of the topic. Third, several contextual constructs, such as uncertainty, structure, and culture, could exist between AI assimilation and FP and moderate this relationship. Finally, research regarding AI technologies in obtaining business value is still very scarce in developing economies; more empirical studies are required to broaden our understanding.

Abstract

     This paper focuses on the relation between business innovation modes and environmental innovation. Over time firms have recognized the importance of prioritizing innovation to gain competitive advantages in open markets. Yet, in more recent times with the more recent international agreements on environmental sustainability (rounds in Doha in 2004; Copenhagen in 2009; Paris in 2016; and Glasgow in 2021), innovation needs to be guided through new boundaries and requirements that individual businesses and the business system as a whole face. One of these boundaries is nature and its resources which require significant protection as part of the international priority agenda on climate change agreed by most countries with the 2016 Paris Agreement on the Environment and recently confirmed with COP26. As firms are found to adopt alternative archetypical strategies of innovation, some science-driven (STI innovation mode) and others practice-driven (DUI innovation mode), we investigate whether any of these strategic modes is beneficial in relation to the capacity of the firms to produce eco-innovations, and which one is more beneficial in relation to which type of eco-innovation (e.g. technological and non-technological innovation). This analysis is seen in relation to the size of the firms as SMEs typically rely on practice and interactive-based innovation activities (DUI mode). This may help design environment protection-orientated policies that focus on specific drivers, thus making policy action efficient and effective. The analysis is based on the Community Innovation Survey (CIS) database for European countries. Our findings support the view that both STI and DUI drivers support eco-innovation through technological nuances that work also in the specific case of SME environmental innovation.

Introduction

     Environmental protection and sustainability have become a priority across the world economy from the Bruntland Report (WCED, 1987) and Rio de Janeiro earth summit in 1992 and the following international agreements in Kyoto, Doha, Copenhagen up to the recent Paris Agreement in 2016 and COP26 in Glasgow. Environmental protection and the control of climate change have become crucial goals of the United Nations (United Nations, 2021). Simultaneously, innovation has become a clear priority for economic development as it represents the key driver for competitiveness in the current globalized markets (Hollanders et al., 2009; Edler and Fagerberg, 2017). However, innovation and environmental sustainability do not necessarily go hand in hand. The “weak sustainability” approach would entail the possibility to compensate for part of the depleted natural resources for some other form of capital (i.e. human capital or physical capital) within the overall “constant capital rule” (Wall, 2013). This dilemma motivates our work on the relation between firm-level innovation and environmental sustainability. In this study we utilize the “business innovation modes” framework that is derived from the literature on innovation systems (Jensen et al., 2007; Amara et al., 2008; Asheim and Parrilli, 2012) to analyze critical behaviours and strategies of innovation across firms that belong to specific production and innovation systems. We explore whether the two archetypical business innovation modes (science and technology based or STI, and innovation based on learning-by-doing, by-using and by-interacting or DUI) are critical for environmental innovation and to what extent (see Jensen et al., 2007; Parrilli et al., 2020). In addition, we analyze whether the behaviour of small and medium-sized enterprises (SMEs) differs from the general trend and to what extent. This evidence can help identify policy actions that might have an impact on eco-innovation across SME.

Conclusions and discussion

5.1. Main findings

     Overall, our analysis produces relevant findings in relation to the impact of specific STI and DUI drivers on the eco-innovation practices and performance of all firms and the SMEs in particular. In this study we have identified important eco-innovation patterns across the whole sample of firms and the SMEs. Small variations are visible across different firm sizes. One of the main findings is about the predominance of technological eco-innovation across firms, and particularly process eco-innovation that is practiced by around 50% of the SMEs. Simultaneously, product eco-innovation is practiced by around 40% of the SMEs. In relation to the modes of innovation there is still a significant percentage of firms that do not adopt any innovation mode (20% across the whole sample and 22% across SMEs). A tiny percentage adopts the STI innovation mode (9%) while the expected majority adopts the DUI mode (32% across SMEs). A very interesting outcome however is that a significant proportion of firms and SMEs are already implementing the STI&DUI mode together (36% of SMEs). In the econometric analysis this combined mode is the most effective across all types of innovation output. These findings show the yet extreme heterogeneity of firm/SME behavior in relation to the new environmental objectives set by the Paris 2016 and COP26 Agreements on Climate Change 2016, and the United Nations Development Goals (Daddi et al., 2012; Marin et al., 2015; Del Rio et al., 2017).

Abstract

     In the literature, studies have evidenced the efforts adopted by firms to develop digital technology with the hope of achieving sustainable decisions and competitive performance. However, studies have yet to provide an extensive explanation of the mechanisms used by firms in their digital technology adoption to impact and enhance value, particularly among small and medium enterprises (SMEs). In this regard, accounting information has served as a fundamental basis for business decision-making and the extensive use of digital technology has paved the way for the efficiency and effectiveness of accounting functions in modifying information relating to such functions. More specifically, a digital accounting system (DAS) enables the reporting and processing of large transaction amounts and generates the data required for analysis. However, despite these advantages, SMEs have been slow in their adoption and usage of DASs. Accordingly, this study drew upon resource-based view theory and the technology-organization-environment framework to propose an integrated model for examining the determinants and impact of using DAS among SMEs. The proposed model encapsulates the use and performance aspect of DAS. The study utilized a self-administered survey questionnaire as the primary data collection instrument. Data from 183 SMEs in Jordan were analyzed using partial least squares-structural equation modeling. The findings reveal that compatibility, organizational readiness, top management support and government support all had significant effects on DAS usage, which, in turn, had a positive and significant effect on DAS performance. With regard to the moderating effects, COVID-19 was found to have a moderating role on the DAS usage–DAS performance relationship. The study findings explain the way firms can enhance their DAS use to obtain optimum performance, thereby contributing to the literature on the antecedents and effects of using current information technology/information systems. The study recommends that the government of Jordan prepare and carry out a campaign concerning the importance of DASs for SMEs.

Introduction

     Businesses have been largely affected by the COVID-19 pandemic, which has forced them to transform their processes and rethink business elements and technology use to remain sustainable while at the same time adapting to changing guidelines and current procedures [1]. Organizational leaders and managers have found COVID-19 to be disruptive, world changing and the ultimate test of their decision-making; this notion holds true for political leaders, senior business management, healthcare operational-level managers and the like. Evidently, the pandemic is the biggest challenge so far when it comes to making decisions in a manner that is timely and accurate [2,3]. For businesses, COVID-19 has led to the emergence of novel challenges in how to handle the repercussions brought on by the crisis and how to make decisions for efficiently and effectively managing the pandemic. Decision-making and system usage comprise the top challenges, which if ignored could lead to catastrophic outcomes [4,5].

Since 2020, researchers such as Lohapan [6], Ainasrallah and Saleem [7] and Hasbolah et al. [8] have indicated the use of technology, such as digital accounting systems (DAS), in addressing difficult and uncertain situations brought on by the COVID-19 pandemic all over the world. Technology use is actually deemed one of the top strategies that businesses can adopt [9,10]. In a world where the COVID-19 pandemic is viewed as a reason to develop and use appropriate technology, demand is met by businesses through their use of effective and up-to-date technology [11,12]. This has resulted in novel business models, online businesses and e-commerce platforms [12]. The pandemic has also led to the promotion and upgrade of technology and automation infrastructure systems such as the DAS infrastructure [13].

Conclusions

     The objectives of the current study were to investigate the drivers of DAS adoption and the role of DAS adoption on the performance of system, as well as the moderation influence of COVID-19 on the relationship between DAS adoption and performance. The low adoption level and performance found in prior research motivated the present study. The low level of adopting DAS and system value were also found to explain weak IMPACT (performance). This empirical research presents a distinguished contribution by examining the role of DAS adoption in enhancing system impacts and value.

     The topic of DAS adoption in the Jordanian context is becoming more important, particularly considering the agenda of the Jordanian government in moving toward a contemporary and digital business environment. The effective usage of DAS is critical for every business in every industry. With the purpose of accomplishing effective adoption, SMEs must consider the potential drivers that might influence the adoption processes, given that several digital systems have failed owing to a low-level of usage.

     Almost a majority of hypotheses proposed have an impact on the use of DAS. Furthermore, this plays a significant role in enterprises’ decision to implement DAS. DAS has undoubtedly been beneficial to organizations that have implemented it, including reducing labor costs, saving time, providing useful information to leaders and improving professional qualifications. In almost all cases, they are satisfied with the quality of services provided by DAS. Those respondents to the survey who are willing to utilize all resources and encourage their employees to work with DAS are positive indicators for the Jordanian economy. Furthermore, DAS has proven to be a superior technology for managing large amounts of data. DAS will therefore become more widely used in the future. As a result of the complex COVID situation, many office workers, especially those in the accounting, auditing and management departments, are required to work from home. As a result, they are unable to communicate directly with each other. Additionally, organizations must maintain and protect data at all times. As a result of this trend, the use of DAS is on the rise.

Abstract

This study aims to examine the effect of the environmental accounting strategy on sustainability performance and explore waste management as a mediation between environmental accounting strategy and the sustainability performance of Micro, Small and Medium Enterprises (MSMEs). Research data was collected from 194 MSMEs in East Java Indonesia through online and offline questionnaires. The data analysis is performed with PLS-SEM. The results of the study found that the MSME’s environmental accounting strategy had an effect on sustainability performance, and it was proven that MSME’s waste management mediated the effect of environmental accounting strategy on MSME sustainability performance. The originality of this research is the development of research instruments, which combine from various sources from previous researchers, GRI standards and Indonesian Government Regulations so that they can contribute Environmental Management Accounting literature and practical contributions to MSMEs and related institutions in determining sustainability performance strategies. This research implication supports the goals of the Indonesian Government’s Sustainability Development Goals (SDGs) regarding SDGs Goal number 12 Responsible consumption and production. The government needs to establish a waste management policy to improve environmental problems. The implications of future research can collect larger data and can compare the MSMEs between emerging countries. Also, MSMEs need to establish strategic Environmental Accounting so that it has an impact on sustainability performance.

Introduction

Companies produce goods or services using raw materials and other materials in the production process. As a result, it impacts material waste, product, and packaging waste. The impact on economic sustainability can reduce sales and operating profits because consumers prefer environmentally friendly products. The impact on environmental sustainability not only can reduce environmental damage such as soil and water pollution and increased global warming but also decrease in employee welfare along with a decrease in operating profit.

Moreover, management’s understanding and knowledge of environmental accounting strategies and waste management are essential in achieving business sustainability in companies, including Micro, Small, and Medium Enterprises (MSMEs). The negative impacts of MSMEs include environmental pollution from production waste. As many as five industries are the biggest producers of B3 (Toxic Hazardous Materials) waste in Indonesia, namely: the metal, chemical, electricity, sugar, and paper industries. As stated by the Deputy Chairperson of Investment in East Java, Turino Junaidi, said that the amount of MSME waste is large, but the level of investment for the waste treatment industry is still small (www.kompasiana.com). For example, from 71 SMEs making tofu in Jombang, almost all of the soybean waste is disposed of together on village roads before finally being dumped into the river. As a result, it polluted the environment in three villages and even polluted surface water and well water. (www.jatim.kompas.tv/article/126221). Therefore, the environmental problems are mostly caused by the impact of economic and social activities of companies, including Micro, Small Medium Enterprises (MSMEs). Polluted water sources, polluted air, deforested forests, and global warming have damaged the environment. People’s awareness demands the importance of protecting environmentally friendly production processes and being concerned with business continuity than the short-term goal of profit.

Conclusion and implication of the research

Indonesia is concerned with Green Accounting because MSMEs waste is quite high and poor waste management. The East Java government has the second largest MSMEs in Indonesia and has a problem with industrial waste. However, it does not take maximum responsibility for product waste and an impact on low sustainability performance. This indicates the need for an Environmental Accounting strategy to support policies to minimize environmental costs related to environmental prevention costs for waste reduction employee training, environmental prevention costs for waste recycling training, environmental detection costs for environmentally friendly product inspection, internal failure costs for waste treatment and failure costs. external for cleaning polluted environment. This research implication supports the goals of the Indonesian Government’s Sustainability Development Goals (SDGs) regarding SDGs Goal number 12 Responsible consumption and production. The government needs to establish a waste management policy to improve environmental problems. Therefore all parties, namely: entrepreneurs including MSMEs, government, private sector, communities including financial institutions have the same responsibility to carry out activities and run a business with due regard to production that is responsible for the environment and society.

Abstract

     This paper investigates the transformation of information sharing and multi-tier supply chain management (MSCM) from the perspective of small and medium-sized enterprises (SMEs) in the context of Industry 4.0. SMEs are typically sharing less information digitally, are less active in conducting MSCM, but must be integrated in digital supplier networks to achieve supply chain transparency or traceability. For this purpose, this paper empirically analyzes SMEs from the manufacturing industry in Austria and Germany are investigated regarding information sharing and MSCM. The responses are analyzed to test three hypotheses, using 81 replies from manufacturing SMEs in Austria and Germany. The three hypotheses investigate the upstream and downstream MSCM practices of SMEs as well as which kind of information is shared with and by SMEs. The results help to understand and reveal potential barriers for information sharing besides technical possibilities to SMEs in order to be actively involved in MSCM.

Introduction and background

     Digital information sharing across supply networks represents a relevant topic since it enables data-based potentials such as in the concept of Industry 4.0 or for using Artificial Intelligence [1,2]. However, many companies do not recognize the importance of data availability and data quality yet. This is particularly true for small and medium-sized enterprises (SMEs), which are often impeded by missing trust, standardization, data exchange interfaces, or technological readiness [3-6] and do not recognize the relevance of digital technologies for their business [7]. Likewise, digital information sharing in multi-tier supply chain management (MSCM) is still in its early stages of development.

     This research investigates information sharing and subsequent data analysis in MSCM, focusing on SMEs. It aims at determining basic characteristics, e.g., size and vertical network position (up- or downstream), of early adopters of data-based MSCM. Raw material suppliers and upstream suppliers have a higher probability of being pressured by large buyer companies, which demand information sharing [2]. Hence, we argue that data based MSCM is more likely to be implemented in the upstream supply chain (H1). Moreover, five categories of information were evaluated if they are shared with SMEs or by SMEs (H1a and H1b): a) inventory level, b) state of delivery, c) expected delay, d) forecast data, and e) production plan

Discussion and Conclusion

Interpretation of Results

     From the interviews, we derived the motives of SMEs for carrying out MSCM and to share data. Mainly, SMEs aim to serve customer requests and to be able to fulfil their own production plan. This is in line with Arend and Wisner [14], who found that conducting supply chain management (SCM) is negatively related to SME performance since they do not implement SCM thoroughly enough or do it because they are forced by more powerful partners while not having benefits for themselves. Hence, before SMEs are able to conduct profitable MSCM, data exchange must be established with mutual benefits for supply chain partners [2]. In addition, we found that not all kinds of information may be relevant for partners in the supply network. For SMEs, binary notes would often suffice, e.g., whether the delivery is on time or not.

     In summary, it can be argued that SME must invest primarily in the area of data structures and availability in order to create the basis for data-based analyses. Particularly regarding network partners that are not directly connected to the company, there is a great need for data so that the entire structures can be analyzed and optimized. It is noticeable that there are differences between the companies in many areas of analysis, which result from the size of the company. Differences are particularly noticeable regarding data availability and the application of analyses in the supply chains. Larger companies are better equipped in terms of data availability and perform more analytics – presumably because they work more intensively with data and therefore also rate the potential higher than smaller ones. Likewise, larger companies have more power in the network and can therefore de facto secure better data availability from their network partners.

Abstract

     This paper responds to the lack of empirical evidence on how enterprise risk management (ERM) and the financial performance of small and medium-sized enterprises (SMEs) are related. Structural equation modeling is used to explore new mediators in the relationship between ERM and SME financial performance. The results show that organizational culture (mission dimension) and strategic risk management performance are full and positive mediators between ERM and financial performance. These research results highlight the fact that the implementation of ERM in an enterprise does not by itself generate the expected effects without the existence of a mature organizational culture and the monitoring of strategic risk management performance. These findings are particularly relevant for SMEs with “pretend ERM” that lacks the strategic and operational components. ERM also helps to transform the negative effect of foreign capital in SME equity on financial performance into a positive effect.

Introduction

     Increasing levels of uncertainty call for proactive risk management in all organizations. The parallel crises triggered by the COVID-19 pandemic (Chakraborty and Maity 2020) and the military conflict in Ukraine have impacted most industries and businesses, unlike the Great Recession of the late 2000s, which primarily affected the financial sector (Gertler and Gilchrist 2018). Systematic risk has long been underestimated in advanced economies (Pagach and Wieczorek-Kosmala 2020). In such a situation, an intuitive assessment of risk outcomes, as often performed by smaller enterprises, is not enough (Grondys et al. 2021). Companies face new challenges and find it harder to maintain their profitability and competitiveness. Therefore, holistic enterprise risk management (ERM) is becoming increasingly important in small and medium-sized enterprises (SMEs).

     Nonfinancial SMEs are mostly unregulated. Thus, there is little pressure to implement a comprehensive risk management system. Nevertheless, in recent years, SMEs have started implementing formal risk management processes to increase their competitiveness (Wirahadi and Pasaribu 2022). ERM improves the quality of the information about enterprise risk profiles. The adoption of ERM reduces systematic risk. The purpose of ERM is to reduce the probability of losses and, therefore, reduce the need to borrow external resources, which positively impacts the expected cost of capital (Berry-Stölzle and Xu 2018).

Conclusion and implications

     Regarding the theoretical implications, this study reveals new mediators between ERM and the subjective financial performance of SMEs. The PLS-SEM method is suitable for analyzing complex relationships and testing causal relationships. Exploring indirect pathways can reveal consequential effects and help managers and owners understand various relationships. Complicated ERM indices (e.g., Gordon et al. 2009) are not suitable for the nonfinancial sector because the input variables for calculating such indices are difficult or impossible to obtain. The model works with the direct and indirect effects of ERM implementation. The indirect effects show the crucial role of organizational culture (mission dimension) and evaluations of strategic risk management performance in the relationship between ERM and the subjective financial performance of SMEs.

     From the management perspective, it is essential to establish functional and integrated processes for ERM implementation. ERM must be integrated with the organizational culture and the performance monitoring systems in the SME. Managers and owners should emphasize the functional implementation of ERM, not just a pretend ERM (Syrová and Špička 2022a) that lacks all the elements of an ERM approach. The ERM system must not be a “facade without the substance” that does not contribute to better planning and decision-making processes (Dvorski Lacković et al. 2022).

Abstract

     Today, more and more enterprises are achieving co-innovation across borders by joining digital platforms. However, many SMEs face difficulties in developing and benefiting from strong digital platform capability (DPC) due to limited experience, resources, and funds, which hinders innovation opportunities. This study constructs a model to explore how SMEs can enhance their innovation performance (IP) by adopting digital platforms based on resource orchestration theory. We then introduce ecological institutional norms (EIN) as the moderating variable to observe whether effective platform governance impacts enterprises’ value co–creation (VCC) and IP. We conduct a questionnaire survey on 346 SMEs in China’s manufacturing industry that participate in digital platforms, and the regression analysis and the bootstrap test results indicate that (1) DPC has a significantly positive impact on IP; (2) DPC has a significantly positive impact on VCC; (3) VCC partially mediates DPC and IP; (4) EIN positively moderate the relationship between DPC and VCC and positively moderate the mediating effect of VCC. These findings add to the literature on digital platforms theoretically and fill the gap in research on how participation in digital platforms can enhance enterprises’ innovation and development from the perspective of SMEs. Finally, the study has important managerial implications for SMEs to cultivate DPC, carry out VCC, and participate in platform governance.

Introduction

     Innovation is a critical component for enterprises to take the leading edge and occupy a dominant competitive position in the market in the context of information technology development and industrial integration [1,2]. In the digital economy age, digital technology provides infrastructural support for economic development [[3], [4], [5]]. However, most small and medium–sized enterprises (SMEs) in China lack core technologies and the digital divide further increases the resistance to breaking through low–end lock–in. SMEs need to deeply integrate into the digital economy and explore new value growth points through digital process transformation and cross–border integration based on network effects. Therefore, digital platforms and the internal digital business ecosystem (DBE), which can break the boundaries of time, space, and organization with the support of digital technology, are gradually attracting attention [[6], [7], [8]]. Industry leaders such as Ali, Tencent, and Haier are trying to build digital platforms and DBEs to break organizational barriers and achieve technological collaborative innovation [9]. However, most of the current research on digital platforms is centered on large enterprises, with less attention given to SMEs [10,11].

     Resource orchestration theory suggests that static enterprise resources cannot meet the needs of enterprise development. Thus, the ability to allocate, integrate, and utilize resources is key to establishing a sustainable competitive advantage [12]. Joining a digital platform does not directly generate benefits: enterprises can only achieve efficient value creation when they actively and spontaneously allocate resources in a digital platform [[13], [14], [15]]. Based on the digital platform scenario, some scholars have pointed out that digital platform capability (DPC) involves combining the resources obtained by enterprises based on information and communication technology (ICT) with other internal and external resources [16]. A stronger DPC can enhance online communication, collaboration, and marketing for efficient and cost–effective resource expansion, which further increases the identification and integration opportunities of critical shared knowledge. It also facilitates enterprises to reallocate internal and external resources to flexible respond to rapidly shifting market environment [[17], [18], [19]]. However, due to the disadvantages in resources, capital, experience, and other aspects, SMEs’ cooperative innovation with other enterprises in the digital platform is often accompanied by risks such as leakage of core resources and misaligned partnerships [20,21]. As a result, many managers of SMEs are resistant and reluctant to join digital platforms. In light of these contradictions, some intriguing questions arise: Can SMEs actually benefit from digital platforms? How does DPC affect the innovation performance (IP) of SMEs?

Discussion

     This study proposes a moderated mediating model to explore the relationship between DPC and IP and how governance mechanisms in the DBE environment impact the above relationship. Focusing on SMEs, we collected 346 valid questionnaires, tested the theoretical assumptions using empirical analysis, and found some interesting conclusions.

     First, DPC has a significantly positive impact on SMEs’ IP. The result is consistent with resource orchestration theory, which proposes that the orchestration, combination, and flexible allocation of heterogeneous resources can help enterprises maintain their long–term competitive advantage [100]. This suggests that stronger digital platform integration capability enables SMEs to quickly access the large amount of heterogeneous resources aggregated in digital platforms [18] and to accelerate the speed of value feedback between subjects through digital channels [50], continuously optimizing the information quality on the platform. At the same time, we found that DPC positively influences VCC. Stronger digital platform integration capability can effectively monitor and evaluate data elements and strengthen the quality of plans developed jointly between subjects [72]; it can reduce the cooperation risk [71] and effectively promote the willingness of subjects to engage in joint problem solving; it can provide more critical information and promote the flexibility of SMEs to adjust their relationships with partners [16]. Stronger digital platform reconfiguration capability can reduce the cooperation cost [57] and enhance the willingness to engage in joint planning among platform subjects; it can optimize the allocation of platform resources [13] and improve the efficiency of cooperating subjects in joint problem solving; it can make platform subjects behave in a loosely coupled state [60] and promote enterprises’ flexibility and mobility to adjust existing cooperative relationships.

Abstract

     While the strategic use of social media (SM) for enhancing firm performance has attracted much attention, little is known about it through the lens of business-to-business (B2B) small and medium-sized enterprises (SMEs). Building on the market-driven view and the dynamic capabilities view of competitive strategy, we examine SM use in a framework of market-sensing and customer-linking capabilities that influence firm performance. Our research model posits that market orientation stimulates SM use to enhance market-sensing capability thereby facilitating two customer-linking capabilities, namely customer relationship management and brand management, which collectively contribute to greater marketing performance and financial performance. Our research model is empirically tested using a survey of 143 UK B2B SMEs. The findings broadly support our theorization in which the strategic use of SM, an essential part of market-sensing capability, enhances customer-linking capabilities. Interestingly, although SM use influences brand management capability, its suggested influences on both customer relationship management capability and marketing performance occur only through the mediation of brand management capability. Both customer-linking capabilities positively influence marketing performance and in turn financial performance. Our findings provide novel conceptual and empirical advancement of how market-centric B2B SMEs strategically use SM to enhance their market-sensing and in turn customer-linking capabilities, and hence firm performance.

Introduction

     With the increased digitalization of marketing activities, marketing professionals are increasingly adopting social media (SM) as a strategic tool to effectively engage with customers and broader stakeholders (e.g. Chaker, Nowlin, Pivonka, Itani, and Agnihotri, 2022; Pardo, Pagani, and Savinien, 2022); develop new products (Du, Yalcinkaya, and Bstieler, 2016); increase brand awareness (Deng, Wang, Rod, and Ji, 2021); co-create value (Itani, Krush, Agnihotri, and Trainor, 2020); and improve firm performance (Cheng, Liu, Qi, and Wan, 2021). More and more researchers suggest that firms must have an SM presence since the strategic use of SM is increasingly seen to enhance firm competitiveness (e.g. Cartwright, Liu, and Raddats, 2021; Tiwary, Kumar, Sarraf, Kumar, and Rana, 2021).

     The likely gains from SM technologies are particularly evident in business markets where customers are more informed and less dependent on interactions with salespeople (Ancillai, Terho, Cardinali, and Pascucci, 2019). For example, leading large firms such as Adobe, IBM, and Maersk Line are increasingly using digital channels and SM to facilitate effective dialogue with customers (Ancillai et al., 2019). The growing evidence suggests that SM can be strategically used to facilitate an effective dialogue with customers (Kovac, 2016), create brand awareness, or differentiate the focal brand from the competition (e.g. Deng et al., 2021; Swani, Brown, and Mudambi, 2020), provide customer care, and/or improve firm performance, among others (e.g. Salo, 2017; Tiwary et al., 2021).

Conclusion

     Overall, our study examined the much-advocated and under-investigated strategic use of SM for enhanced B2B marketing strategy. We opted to focus on the B2B SME context where it argued that due to the resource-constrained operating environment experienced by SMEs, the use of SM platforms will be particularly beneficial due to easiness of implementation, low-cost accessibility, and cost-efficiency. We promised our inquiry on the dynamic capabilities view and Day’s (1994) seminal framework of capabilities in market-driven firms and theorized that the strategic use of SM provides a meaningful link between market orientation and CLC. Overall, our research model captures how the strategic use of SM strengthens MSC to effectively seize market opportunities through (re)developing two key CLC that drive enhanced marketing performance and in turn financial performance. Overall, the strategic use of SM remains a fertile ground for further inquiry in B2B marketing strategy context.

Abstract

Although the importance of fostering organizational creativity and open innovation is becoming more widely acknowledged, there are still few empirical evidence on the impact of creativity and innovation on enhancing SMEs performance. Moreover, previous study argued that the effect of creativity and innovation is still inconclusive, especially in SMEs. SMEs sometimes perceive that research and development is a costly activity and it doesn’t view as the activity that can directly improve performance. This study aims to examine the effect of organizational creativity and open innovation on SMEs performance. Data used in this study was collected from 206 SMEs located in several regions of Indonesia. The collected data then being analysed using PLS-SEM and this study found that all the hypotheses constructed were accepted. The findings indicate that organizational creativity and open innovation are significantly and positively influence SMEs performance. On the other hand, this study also treats organizational creativity as a second order variable that is formed from a combination of individual creativity, group creativity, internal environment, and knowledge creation where most study only consider individual and group creativity as aspect that formed organizational creativity. The result of this study provide evidence that organizational creativity that is formed by those four aspects has the ability to directly improve SME performance. Theoretically, this study contribute to the debate on how organizational creativity and open innovation can directly improve SMEs performance. Practically, this study provides insight to SMEs manager regarding how organizational creativity and open innovation can contribute to SMEs performance.

Introduction

Every organization will try to obtain optimal performance to achieve organizational goals while being superior to its competitors (Pap et al., 2022). However. the performance of an organization is determined by its ability to innovate both in producing a product or service (Rumanti et al., 2021). Organizational performance is a concept that includes all activities within an organization or company, both those that produce products and services. Organizational performance refers to the implementation of the organization’s vision, mission, goals, and activities (Pap et al., 2022) which are supported by the concept of innovation, one of which is open innovation (Lopes et al., 2022). Innovation is one of the drivers in the organization in an effort to accelerate optimal organizational performance while at the same time reflecting the main goals of the organization (Rumanti et al., 2021). Organizational performance is a key construct in management research and has received a lot of attention from interested parties in an organization (Scaliza et al., 2022, Rumanti et al., 2022, Singh et al., 2021). Organizational performance is also supported by the existence of an innovation related to the creation of new services and products, especially innovation that is open, namely open innovation. Organizational performance can be influenced by the organization’s ability to innovate, especially from external parties (open innovation) (Rumanti et al., 2022).

Conclusion

6.1. Main result
This study was able to identify organizational performance through organizational creativity and open innovation. Each plays a role in achieving more optimal organizational performance and supporting organizational goals. Through the research model produced in this study, the relationship and influence of organizational creativity and open innovation will be identified on organizational performance as well as the analysis and implications of both implications for relevant theory or science as well as implications for managerial activities within the organization. The magnitude of the influence of organizational creativity and open innovation on organizational performance will become a reference in evaluating organizational creativity and open innovation processes that will support the performance of Indonesian SMEs. Where construction is studied in the context of SMEs, a sample of 206 SMEs is obtained using a purposive sampling technique. The results of this study provide empirical evidence showing a positive effect of organizational creativity and open innovation on organizational performance. Organizations that prioritize and actively cultivate a creative and innovative culture will likely see increased overall performance. These two main variables have been proven to improve the performance of an organization to reach optimal points in a more challenging business environment. This can be achieved through various means, such as encouraging employee participation in the innovation process, enhancing the individual creativity of employees, and promoting a learning-oriented culture.

Abstract

     Although research underlines the need for SMEs to innovate their Business Model, they face considerable challenges in exploring external business opportunities and experimenting/developing their available resources in unexpected ways. We posit that one way that SMEs can innovate their Business Model is through exaptation, a discontinuous evolutionary process that allows utilizing and adapting existing resources in new application domains. Using a case study approach, we investigate the case of a SME that has successfully innovated its Business Model through exaptation. We then discuss how three key exaptation processes lead to value creation, delivery and capturing, thus supporting Business Model Innovation in SMEs.

Introduction

     Business Model Innovation (BMI) has been described as “the search for new logics of the firm and new ways to create and capture value for its stakeholders” (Casadesus‐Masanell and Zhu, 2013, p. 464). In this perspective, firms can create and exploit new opportunities linked to their innovative Business Model (BM) by adopting different approaches. Firms might add novel activities through backward or forward integrations, connect activities in a novel way, or modify one or more parties dedicated to any of the activities (Amit and Zott, 2012). For example, firms can choose to alter the set of elementary activities they perform and rely on the resources or technological capabilities of external parties (such as individual, organizations, universities) to develop a new value proposition (Chesbrough, 2007; Saebi and Foss, 2015).

     Researchers underline that BMI is becoming even more important for success than product/service or process innovation (Johnson et al., 2008; Amit and Zott, 2012). However, practitioners have little guidance on how to design innovative BMs (Foss and Saebi, 2017; Teece, 2018). This is particularly true for Small and Medium-Enterprises (SMEs), the main actors in innovation processes and technological development at the local, regional, and even national level (Lee et al., 2012). Accordingly, recent international policies have emphasized the need for SMEs to redefine their BM to sustain and promote their competiveness. In this perspective, BMI is a potentially relevant tool allowing SMEs to resolve the trade-off between innovation costs and benefits, enabling them to create, deliver, and capture new value.

Conclusions

     Prior research has emphasized the pressing challenge for SMEs to exploit, define, and implement an innovative BM to remain competitive. Anecdotal evidence shows that innovative BMs are closely linked to exaptation, observed as an important mechanism to use resources in ways for which they were not originally intended (Dew et al., 2004; Cattani, 2006). This might be particularly fruitful for SMEs that have some difficulties in “thinking outside the box” (Gassmann et al., 2013, p. 2), but at the same time, specific advantages in developing new products and businesses (Vanhaverbeke, 2017). Prior BMI studies have mainly focused on large firms and start-ups, but seldom on SMEs, and to the best of our knowledge, no studies have hitherto focused explicitly on the processes to be implemented to sustain BMI through exaptation in SMEs.

     This study has investigated how SMEs might innovate their BM through exaptation. In analyzing the exaptation process in SMEs, we advance knowledge on how and why exaptation favors BMI. In addition, our study highlights how each stage of exaptation process contributes to BMI by means of value creation, value delivery and value capturing.