ISSN: 2222-6990
Open access
Organizational agility (OA) is a crucial capability for SMEs to respond to the ever-changing external business environment. Although the human side is one of the key enablers of OA, especially competencies possessed by employees, which seems to be rarely explored in SMEs context. This study investigates the relationship between employee competencies (EC), OA, and firm performance (FP) through the lens of the dynamic capabilities view. Using data from 313 manufacturing SMEs in Malaysia and employing PLS-SEM, the proposed model was tested. The findings support the proposed hypotheses, confirming the positive impact of EC on FP and the mediating role of OA in the EC-FP relationship.
Abbaszadeh, M., Shirouyehzad, H., & Asadpour, M. (2023). A fuzzy QFD approach to prioritize capabilities and enablers of organizational agility based on its drivers: a case study. International Journal of Quality and Reliability Management, 40(8), 1859–1875. https://doi.org/10.1108/IJQRM-09-2021-0323
Abdelhamid, M., & Sposato, M. (2019). The role of organisational learning in creating an agile workforce in Dubai. International Journal of Work Organisation and Emotion, 10(3), 262–279. https://doi.org/10.1504/IJWOE.2019.105802
Ali, M., Munir, M., Azam, R. I., Lahore, P., & Fellow, I. (2021). How Do IT Competence and Business Competence Bring Organizational Agility? An Evidence from Pakistan. International Journal of Innovation, Creativity and Change, 15(6), 2021.
Anwar, M., & Shah, S. Z. A. (2021). Entrepreneurial orientation and generic competitive strategies for emerging SMEs: Financial and nonfinancial performance perspective. Journal of Public Affairs, 21(1), 1–17. https://doi.org/10.1002/pa.2125
Appelbaum, S. H., Calla, R., Desautels, D., & Hasan, L. (2017). The challenges of organizational agility (part 1). Industrial and Commercial Training, 49(1), 6–14. https://doi.org/10.1108/ICT-05-2016-0027
Atan, J., & Mahmood, N. H. N. (2019). The role of transformational leadership style in enhancing employees’ competency for organization performance. Management Science Letters, 9(Special Issue 13), 2191–2200. https://doi.org/10.5267/j.msl.2019.7.033
Bie?kowska, A., & Tworek, K. (2020). Job performance model based on Employees’ Dynamic Capabilities (EDC). Sustainability (Switzerland), 12(6). https://doi.org/10.3390/su12062250
Bueechl, J., Haerting, R., Pressl, M., & Kaim, R. (2021). Potentials and Barriers of Agility in Small and Medium Sized Enterprises Insights from qualitative research in Germany. 24th International Conference on Business Information Systems Main, 1(September), 367–380. https://doi.org/10.52825/bis.v1i.69
Calhoun, J. G., Dollett, L., Sinioris, M. E., Wainio, J. A., Butler, P. W., Griffith, J. R., & Warden, G. L. (2008). Development of an interprofessional competency model for healthcare leadership. Journal of Healthcare Management, 53(6).
Çetin, F., & Tolay, E. (2022). AGILITY AND AGILE ORGANIZATIONS FROM EMPLOYEES’PERSPECTIVES: A QUALITATIVE RESEARCH IN THE CONTEXT OF THE SAAS BUSINESS MODEL. Uluslararas? Yönetim ?ktisat ve ??letme Dergisi, 18(4), 1128–1149.
Chin, W. W. (1998). The partial least squares approach to structural equation modeling. In G. A. Marcoulides (Ed.), Modern Methods for Business Research (1st ed., p. 448). Psychology Press.
Cho, H. E., Jeong, I., Kim, E., & Cho, J. (2022). Achieving superior performance in international markets: the roles of organizational agility and absorptive capacity. Journal of Business and Industrial Marketing, September 2021. https://doi.org/10.1108/JBIM-09-2021-0425
Chreptavi?ien?, V., & Starkut?, J. (2012). Relationship between Career and Competency: Verification of Theoretical Model Validity. Engineering Economics, 23(2), 163–173. https://doi.org/10.5755/j01.ee.23.2.1539
Crocitto, M., & Youssef, M. (2003). The human side of organizational agility. Industrial Management and Data Systems, 103(5–6), 388–397. https://doi.org/10.1108/02635570310479963
Devie, D., Kwistianus, H., Wellyani, C. V. P., & Goenadi, G. R. N. O. (2023). The Importance of Organizational Agility to Improve Performance: Evidence from the Hotel Industry in the Post-Covid-19 Era. Binus Business Review, 14(3), 271–284. https://doi.org/10.21512/bbr.v14i3.9363
Diamantopoulos, A., Sarstedt, M., Fuchs, C., Wilczynski, P., & Kaiser, S. (2012). Guidelines for choosing between multi-item and single-item scales for construct measurement: A predictive validity perspective. Journal of the Academy of Marketing Science, 40(3), 434–449. https://doi.org/10.1007/s11747-011-0300-3
Federici, E., Boon, C., & Den Hartog, D. N. (2021). The moderating role of HR practices on the career adaptability–job crafting relationship: a study among employee–manager dyads. The International Journal of Human Resource Management, 32(6), 1339–1367.
Felipe, C. M., Roldán, J. L., & Leal-Rodríguez, A. L. (2016). An explanatory and predictive model for organizational agility. Journal of Business Research, 69(10), 4624–4631.
Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39–50.
Friedman, H. H., & Gerstein, M. (2018). Employee adaptability and organizational agility: The secret Elixir that produces outstanding performance. Northeast Business & Economics Association, September 2015, 105–109.
Gaskin, J., Ogbeibu, S., & Lowry, P. B. (2023). Demystifying Prediction in Mediation Research and the Use of Specific Indirect Effects and Indirect Effect Sizes. In H. Latan, J. F. Hair, & J. R. Noonan (Eds.), Partial Least Squares Path Modeling: Basic Concepts, Methodological Issues and Applications (2nd ed., pp. 209–228). Springer International Publishing. https://doi.org/10.1007/978-3-031-37772-3
Gong, Y., Li, J., Xie, J., Zhang, L., & Lou, Q. (2022). Will “Green” Parents Have “Green” Children? The Relationship Between Parents’ and Early Adolescents’ Green Consumption Values. Journal of Business Ethics, 179(2), 369–385. https://doi.org/10.1007/s10551-021-04835-y
Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2021). A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM). SAGE Publications. https://books.google.com.my/books?id=6z83EAAAQBAJ
Hair, J. F., Ringle, C. M., & Sarstedt, M. (2011). PLS-SEM: Indeed a silver bullet. Journal of Marketing Theory and Practice, 19(2), 139–152.
Hair, J. F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When to use and how to report the results of PLS-SEM. European Business Review, 31(1), 2–24. https://doi.org/10.1108/EBR-11-2018-0203
Hassan, N. H., & Hassan, M. F. (2022). The role of information technology personnel competency ( ITPC ) towards organizational agility?: an empirical study on automotive organizations in Malaysia. August, 199–200.
Henseler, J., Ringle, C. M., & Sarstedt, M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation modeling. Journal of the Academy of Marketing Science, 43, 115–135.
Huang, Y., Yan, A., & Smith, R. (2019). Methodology for the development of knowledge management on organizational performance based on employees’ professional competence. Revista de Cercetare Si Interventie Sociala, 64, 85–96. https://doi.org/10.33788/rcis.64.7
Irfan, M., Salameh, A. A., Saleem, H., Tahir Naveed, R., Dalain, A. F., & Shahid, R. M. (2022). Impact of servant leadership on organization excellence through employees’ competence: Exploring a cross-cultural perspective. Frontiers in Environmental Science, 10(October), 1–13. https://doi.org/10.3389/fenvs.2022.985436
Joiner, B. (2019). Leadership Agility for organizational agility. Journal of Creating Value, 5(2), 139–149.
Kaur, S., & Kaur, G. (2020). Understanding the impact of human resource practices on employee competencies: evidence from Indian food processing industry. Employee Relations, 43(5), 957–978. https://doi.org/10.1108/ER-05-2020-0216
Kaur, S., & Kaur, G. (2022). Human resource practices, employee competencies and firm performance: a 2-1-2 multilevel mediational analysis. Personnel Review, 51(3), 1100–1119. https://doi.org/10.1108/PR-08-2020-0609
Kim, J., & Jung, H. S. (2022). The Effect of Employee Competency and Organizational Culture on Employees’ Perceived Stress for Better Workplace. International Journal of Environmental Research and Public Health, 19(8). https://doi.org/10.3390/ijerph19084428
Kock, N. (2015). Common method bias in PLS-SEM: A full collinearity assessment approach. International Journal of E-Collaboration (Ijec), 11(4), 1–10.
Lai, H., Pitafi, A. H., Hasany, N., & Islam, T. (2021). Enhancing Employee Agility Through Information Technology Competency: An Empirical Study of China. SAGE Open, 11(2). https://doi.org/10.1177/21582440211006687
Levy, P. S., & Lemeshow, S. (2013). Sampling of populations: methods and applications. John Wiley & Sons.
Liu, Z., & Huo, H. (2024). The Impact of ERP Assimilation on Mass Customization Capability: A Dynamic Capabilities View. IEEE Access, 12(March), 36778–36792. https://doi.org/10.1109/ACCESS.2024.3364390
Lu, Y., & Ramamurthy, K. (2011). Understanding the link between information technology capability and organizational agility: An empirical examination. MIS Quarterly: Management Information Systems, 35(4), 931–954. https://doi.org/10.2307/41409967
McKelvie, A., & Davidsson, P. (2009). From resource base to dynamic capabilities: An investigation of new firms. British Journal of Management, 20(SUPP. 1). https://doi.org/10.1111/j.1467-8551.2008.00613.x
Memon, M. A., Ting, H., Cheah, J.-H., Thurasamy, R., Chuah, F., & Cham, T. H. (2020). Sample Size for Survey Research: Review and Recommendations. Journal of Applied Structural Equation Modeling, 4(2), i–xx. https://doi.org/10.47263/jasem.4(2)01
Mikalef, P., & Pateli, A. (2017). Information technology-enabled dynamic capabilities and their indirect effect on competitive performance: Findings from PLS-SEM and fsQCA. Journal of Business Research, 70, 1–16.
Mossholder, K. W., Bennett, N., Kemery, E. R., & Wesolowski, M. A. (1998). and Work Reactions?: The Mediational Role of Procedural Justice. Journal of Management, 24(4), 533–552.
Motwani, J., & Kataria, A. (2024). Organization agility: a literature review and research agenda. International Journal of Productivity and Performance Management. https://doi.org/10.1108/IJPPM-07-2023-0383
Nadzim, S. Z. A., & Halim, H. A. (2022). The Mediating Role of Employee Agility on The Relationship between Digital Competency and Employee Performance among Civil Servants in Malaysian Public University. An International Journal, 14(3s), 1457–1470.
Nguyen, T., Le, C. V., Nguyen, M., Nguyen, G., Lien, T. T. H., & Nguyen, O. (2024). The organisational impact of agility: a systematic literature review. In Management Review Quarterly (Issue 0123456789). Springer International Publishing. https://doi.org/10.1007/s11301-024-00446-9
Nijssen, M., & Paauwe, J. (2012). HRM in turbulent times: How to achieve organizational agility? International Journal of Human Resource Management, 23(16), 3315–3335. https://doi.org/10.1080/09585192.2012.689160
Otoo, F. N. K. (2019). Human resource management (HRM) practices and organizational performance: The mediating role of employee competencies. Employee Relations, 41(5), 949–970. https://doi.org/10.1108/ER-02-2018-0053
Park, S., & Park, S. (2019). Employee adaptive performance and its antecedents: Review and synthesis. Human Resource Development Review, 18(3), 294–324.
Podsakoff, P. M., MacKenzie, S. B., Lee, J.-Y., & Podsakoff, N. P. (2003). Common method biases in behavioral research: a critical review of the literature and recommended remedies. Journal of Applied Psychology, 88(5), 879.
Potnuru, R. K. G., Sahoo, C. K., & Sharma, R. (2019). Team building, employee empowerment and employee competencies: Moderating role of organizational learning culture. European Journal of Training and Development, 43(1–2), 39–60. https://doi.org/10.1108/EJTD-08-2018-0086
Sabuhari, R., Sudiro, A., Irawanto, D., & Rahayu, M. (2020). The effects of human resource flexibility, employee competency, organizational culture adaptation and job satisfaction on employee performance. Management Science Letters, 10(8), 1775–1786.
Saha, N., Gregar, A., & Sáha, P. (2017). Organizational agility and HRM strategy: Do they really enhance firms’ competitiveness? International Journal of Organizational Leadership, 6(3), 323–334. https://doi.org/10.33844/ijol.2017.60454
Salman, M., Ganie, S. A., & Saleem, I. (2020a). Employee Competencies as Predictors of Organizational Performance: A Study of Public and Private Sector Banks. Management and Labour Studies, 45(4), 416–432. https://doi.org/10.1177/0258042X20939014
Salman, M., Ganie, S. A., & Saleem, I. (2020b). The concept of competence: a thematic review and discussion. European Journal of Training and Development, 44(6–7), 717–742. https://doi.org/10.1108/EJTD-10-2019-0171
Santoro, G., Messeni-Petruzzelli, A., & Del Giudice, M. (2021). Searching for resilience: the impact of employee-level and entrepreneur-level resilience on firm performance in small family firms. Small Business Economics, 57(1), 455–471. https://doi.org/10.1007/s11187-020-00319-x
Siegel, M., & Booth, C. (2020). Six dimensions of the agile enterprise. In PwC.
Tallon, P. P., & Pinsonneault, A. (2011). Competing perspectives on the link between strategic information technology alignment and organizational agility: insights from a mediation model. MIS Quarterly, 463–486.
Teece, D. J. (2007). Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal, 28(13), 1319–1350.
Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Knowledge and Strategy, 18(7), 77–116. https://doi.org/10.1093/0199248540.003.0013
Teece, D., Peteraf, M., & Leih, S. (2016). Dynamic Capabilities and Organizational Agility. California Management Review, 58(4), 13–35.
Todericiu, R. (2021). The Impact of Intellectual Capital on the SMEs Performance: A Study of the Romanian Central Region SMEs. In Studies in Business and Economics (Vol. 16, Issue 1, pp. 198–209). https://doi.org/10.2478/sbe-2021-0016
Troise, C., Corvello, V., Ghobadian, A., & O’Regan, N. (2022). How can SMEs successfully navigate VUCA environment: The role of agility in the digital transformation era. Technological Forecasting and Social Change, 174(April 2021), 121227. https://doi.org/10.1016/j.techfore.2021.121227
Wageeh, N. A. (2016). Organizational Agility: The Key to Organizational Success. International Journal of Business and Management, 11(5), 296. https://doi.org/10.5539/ijbm.v11n5p296
Wohlgemuth, V., Wenzel, M., Berger, E. S. C., & Eisend, M. (2019). Dynamic capabilities and employee participation: The role of trust and informal control. European Management Journal, 37(6), 760–771. https://doi.org/10.1016/j.emj.2019.02.005
Zhang, J., & Quoquab, F. (2022). Documenting the knowledge of pro-environmental travel behaviour research: a visual analysis using CiteSpace. Journal of Tourism Futures, ahead-of-print.
Zhang, J., Quoquab, F., & Mohammad, J. (2023). What Do We Know About Plastic Pollution in Coastal/Marine Tourism? Documenting Its Present Research Status from 1999 to 2022. SAGE Open, 13(4), 1–17. https://doi.org/10.1177/21582440231211706
Zhang, J., Quoquab, F., & Mohammad, J. (2024). Plastic and sustainability: a bibliometric analysis using VOSviewer and CiteSpace. Arab Gulf Journal of Scientific Research, 42(1), 44–67. https://doi.org/10.1108/AGJSR-10-2022-0225
Zhou, J., Bi, G., Liu, H., Fang, Y., & Hua, Z. (2018). Understanding employee competence, operational IS alignment, and organizational agility – An ambidexterity perspective. Information and Management, 55(6), 695–708. https://doi.org/10.1016/j.im.2018.02.002
Zighan, S. M., & Dwaikat, N. Y. (2023). Exploring organisational agility in SMEs. International Journal of Entrepreneurship and Small Business, 49(4), 561–576. https://doi.org/10.1504/ijesb.2023.10058249
Zongyuan, L., Singh, H. S. A. M., & Jiale, Z. (2025). Exploring the Impact of Employee Competencies on Firm Performance in Manufacturing SMEs in Malaysia: A Dynamic Capabilities View. International Journal of Academic Research in Business and Social Sciences, 15(1), 470–485.
Copyright: © 2025 The Author(s)
Published by HRMARS (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode