Developing Dynamic Capabilities in Emerging Markets : Comparative Multiple Case Studies of Cameroonian and Zambian SMEs

Abstract: ABSTRACT Small and Medium Size Enterprise (SMEs) have long been recognised as the major drivers of economic activities due to their entrepreneurial traits of being innovative which lead to job creation, sustaining economic growth, export expansion, and efficient allocation of resources in line with their competitive goals and their respective country’s objectives. In their pursuit as major economic drivers in their respective economies, SMEs are barely exposed to hostile environments triggering fierce competition from Multinational Corporations. This has entailed that SMEs need to enhance their capabilities in such environments to sustain their competitive advantage by reconfiguring their internal and external competences and resources in response to changing environments. Surprisingly, literature on how SMEs develop dynamic capabilities in such markets is limited and inconsistent. Therefore, this thesis explores how SMEs develop dynamic capabilities in emerging markets specifically in African markets.   The central purpose of the study is to explore how SMEs in emerging markets such as Africa develop dynamic capabilities to compete alongside MNCs. Building on prior researches which conceptually suggested that market orientation, learning orientation, and entrepreneurial orientation in separate cases, enables SMEs to build dynamic capabilities in dynamic environments, this study explored this viewpoint through a qualitative case study data. Comparative multiple case studies are developed in order to have a holistic understanding of how SMEs across sectors develop dynamic capabilities. The study employs empirical data collected through the use of semi-structured interviews in which samples are purposively selected from 10 firms from separate industries in Africa, in which five were drawn from Cameroon and other five drawn from Zambia. The study follows a qualitative-deductive approach.   Findings indicate that SMEs develop dynamic capabilities in emerging market principally through the lenses of market orientation and learning orientation. While entrepreneurial orientation is found lacking the potential to enable SMEs build-up the required dynamic capabilities due to the fact that it places huge demand on SMEs who are short of adequate financial resources to meet up with the contingencies of being fully entrepreneurial. That is to say, market orientation and learning orientation other than entrepreneurial orientation are the enablers of dynamic capabilities in emerging market. The findings contribute to existing literature by building an empirically-grounded synthesis of the constructs of market orientation, learning orientation and entrepreneurial orientation involved in the development of dynamic capabilities which validates earlier claims on the development of dynamic capabilities in dynamic environment. Second, the results contribute to theory by advancing an original model which brings together all standalone models in the field of dynamic capabilities development into one, thereby harmonising the polarisation of facts. Furthermore, the findings bear potential for researchers and entrepreneurs intending to invest in emerging markets such as Africa.   To improve on this study, we suggest undertaking a related cross-comparative case study on similar grounds which takes into account homogeneity and age parameters at industry level from two or more countries. We believe this might provide an additional explanation on how SMEs in emerging markets develop dynamic capability and may also shed more light on whether age of a firm has an effect on the build-up of dynamic capabilities.