Resource-based model for small innovative enterprises

• Published in: Management decision 2020-12, Vol.58 (8), p.1525-1541
• Main Authors: Maiti, Moinak, Krakovich, Victor, Shams, S.M. Riad, Vukovic, Darko B.
• Format: Article
• Language: English
• Subjects: Competition; Competitive advantage; Equity financing; Innovations; Small & medium sized enterprises-SME; Small business; Strategic management
• ISSN: 0025-1747; 1758-6070
• DOI: 10.1108/MD-06-2019-0725

PurposeThe paper introduces a resource-based linear programming model for resource optimization in small innovative enterprises (SIE).Design/methodology/approachThe model is grounded on resource-based view on the firm and dynamic capabilities approach. Linear programming technique is used to provide the actual framework to the resource-based model.FindingsThe paper introduces a new resource-based linear programming model for resource optimization in small innovative enterprises. The conceptual model is grounded on resource-based view (RBV) and dynamic capabilities strategy. The RVB of firm and firm strategy is based on the concept of economic rent. Linear programming technique is used to provide the actual framework to the resource-based model. In developing the versatility concept, study suggests a distinct sight regarding resource fungibility. Study classifies resources into multipliable, rentable and expendable resources to increases adequacy of the model. The developed model includes both tangible and intangible assets such as human capital. The survival rate of SIE in the early stages of life cycle is very low due to the competition among SIEs. In this regard, the greatest advancement of the developed resource-based linear programming model is its simplicity and versatility which is much desirable for the SIE especially in their initial stages of the life cycle. Kelliher and Reinl (2009) argued that micro firms have unique advantage over bigger firms in following term: rate of learning or redeployment of strategy in micro firms is faster than the rate of change in their environment. One very significant feature of the developed resource-based linear programming model is that mathematically the proposed model could easily be transformed into mixed integer or stochastic linear programming models to meet the time variant requirement of small firms especially when it expands its operation.Research limitations/implicationsThe survival rate of SIE in the early stages of life cycle is very low due to the competition among SIEs. In this regard, the greatest advancement of the developed resource-based linear programming model is its simplicity and versatility which is much desirable for the SIE especially in their initial stages of the life cycle. Kelliher and Reinl (2009) argued that micro firms have unique advantage over bigger firms in following term: rate of learning or redeployment of strategy in micro firms is faster than the rate of change in their envi