Design management capabilities and performance of small and medium-scale enterprises

Abstract

This paper examines how innovation mediates the relationship between design management capabilities (DMCs) and firm performance. While these concepts have attracted attention in strategic management literature, how they interact to drive the success of small and medium-scale enterprises (SMEs) is not fully understood. Drawing on the dynamic capability perspective, and empirical data from SMEs in Ghana, the proposed model was validated. Survey data were gathered from 209 managers/owners of SMEs in Ghana. Structural equation modeling (SEM) was used to examine the proposed relationships in the model. The findings revealed that there is an insignificant but positive link between design management capabilities and the performance of businesses. Also, innovation is seen to fully mediate the design management capability–firm performance relationship. The results confirmed that SMEs that exhibit good innovative skills in addition to demonstrating design management capabilities can perform well in the market. Studies on design management capability–firm performance relationship is quite rare in the African context. Thus, this paper provides a contemporary view to help stakeholders achieve sustainable benefits by understanding the dynamics of design management capabilities–firm performance relationship.