ISSN: 2226-3624
Open access
In the disruptive era defined by rapid technological advancements, globalisation, and volatile market conditions, Small and Medium Enterprises (SMEs) face unique challenges and opportunities. This concept paper explores the critical factors influencing strategic decision-making in Malaysian SMEs, focusing on leadership, cost management, supply chain management, and digitalisation. Anchored in the theoretical frameworks of the Upper Echelons Theory, Resource-Based View (RBV), and Dynamic Capabilities Theory, the study presents a conceptual framework highlighting the interplay between internal capabilities and external pressures. The paper emphasises the pivotal role of leadership in driving resilience and innovation, cost management in optimising resources, supply chain innovations in enhancing adaptability, and digital transformation in fostering strategic agility. By addressing gaps in the literature and contextualising findings within Malaysia's socio-economic landscape, this paper provides actionable insights for SME leaders and policymakers. It advocates for future empirical research to validate the framework and explore the synergistic effects of these factors, offering practical strategies for SMEs to navigate disruption and achieve long-term competitiveness.
Achbah, R. (2024). Manager characteristics and SMEs's structuring decisions: In-court vs. out-of-court restructuring. Review of Entrepreneurship, 3(2), 45-71.
Amaya, A., Campoverde, J., & Granda, M. (2024). The effect of dynamic capabilities on MSMEs digitalisation: Exploring the moderating role of firm age. Journal of Technology Management & Innovation, 19(1), 40–50.
Arshad, A., Rasli, A., Arshad, A., & Zain, Z. (2016). Transformational Leadership and Business Performance: An Insight from Technology-based SMEs in Malaysia. 34-42.
Ates, A., & Bititci, U. (2009). Strategy management in small to medium-sized enterprises: Evidence from UK manufacturing SMEs. European Operations Management Association Conference.
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120.
Bell, P., & Chen, J. (2015). The close integration of pricing and supply chain decisions has strategic and operational benefits. Annals of Operations Research, 257, 77 - 93.
Business Today. (2024). Malaysia SMEs are trailing behind: Riddled with productivity challenges compared to global counterparts. Retrieved from https://www.businesstoday.com.my/2024/01/21/malaysia-smes-are-trailing-behind-riddled-with-productivity-challenges-compared-global-counterparts
?ervinka, T. (2023). Digital Transformation of Strategic Management of SMEs in the Czech Republic. European Journal of Interdisciplinary Studies.
Chelliah, S., Sulaiman, M., & Yusoff, Y. (2010). Internationalisation and Performance: Small and Medium Enterprises (SMEs) in Malaysia. International Journal of Biometrics, 5, 27.
Cheng, W. H., Kadir, K. A., & Bohari, A. M. (2014). The strategic planning of SMEs in Malaysia: A view of external environmental scanning. International Journal of Business and Society, 15(3), 437–446.
Chin, Y., & Lim, E. (2018). Policies and Performance of SMEs in Malaysia. Journal of Southeast Asian Economies, 35, 470 - 487.
Cristofaro, M., Bao, Y. J., Chiu, S., Hernández-Lara, A. B., & Perez-Calero, L. (2023). Editorial: Affect and cognition in upper echelons' strategic decision making: Empirical and theoretical studies for advancing corporate governance. Frontiers in Psychology, 13, 1081095.
Dass, M., & Johar, M. (2022). Leveraging the Use of Online Marketplace for SMEs in Malaysia. Journal of Management & Science.
Hambrick, D. C., & Mason, P. A. (1984). Upper echelons: The organisation as a reflection of its top managers. Academy of Management Review, 9(2), 193–206.
Hami, N., Yamin, F., Shafie, S., Muhamad, M., & Ebrahim, Z. (2018). Sustainable Manufacturing Practices among SMEs in Malaysia. International Journal of Technology.
Hassan, Z., & Olaniran, S. O. (2020). The impact of strategic leadership on organisational performance of small and medium enterprises (SMEs) in Malaysia. Journal of Business and Retail Management Research, 14(3), 127–135.
Huang, X. (2009). Strategic decision making in Chinese SMEs. Chinese Management Studies, 3, 87-101.
Ivanov, D., & Dolgui, A. (2020). A digital supply chain twin for managing disruptions. International Journal of Production Research, 58(11), 3381–3392.
Lim, C. H., & Teoh, K. B. (2021). Factors influencing SME business success in Malaysia. Annals of Human Resource Management Research, 1(1), 41–54.
Motloung, M., & Lew, C. (2023). Drivers and consequences of strategic leader indecision: An exploratory study in a complex case. Leadership & Organization Development Journal, 44*(4), 453–473.
Muhammad, M., Char, A., Yasoa', M., & Hassan, Z. (2009). Small and Medium Enterprises (SMEs) Competing in the Global Business Environment: A Case of Malaysia. International Business Research, 3, 66.
Musa, H., & Chinniah, M. (2016). Malaysian SMEs Development: Future and Challenges on Going Green. Procedia - Social and Behavioral Sciences, 224, 254-262.
OECD. (2021). The digital transformation of SMEs. OECD Studies on SMEs and Entrepreneurship.
Papadakis, V., Lioukas, S., & Chambers, D. (1998). Strategic decision-making processes: The role of management and context. Strategic Management Journal, 19, 115-147.
Ramdan, M., Aziz, N., Abdullah, N., Samsudin, N., Singh, G., Zakaria, T., Fuzi, N., & Ong, S. (2022). SMEs Performance in Malaysia: The Role of Contextual Ambidexterity in Innovation Culture and Performance. Sustainability.
Rehman, S. U., Jabeen, F., Shahzad, K., Riaz, A., & Bhatti, A. (2024). Industry 4.0 technologies and international performance of SMEs: Mediated-moderated perspectives. International Entrepreneurship and Management Journal, 21, Article 25.
Remali, A. M., Ismail, A. A., Salleh, F. A. S., Halid, M. H., & Hassanuddin, M. I. M. (2020). Strategic management accounting and decision-making in small medium enterprises in Malaysia. In European Proceedings of Social and Behavioural Sciences, 95, 137–145.
Ruan, M., Baskaran, A., & Zhou, S. (2021). Mainland Chinese Immigrant-owned SMEs in Malaysia: Case Studies. Millennial Asia, 13, 5 - 34.
Sagala, G. H., & ?ri, D. (2024). Toward SMEs digital transformation success: A systematic literature review. Information Systems and e-Business Management, 22(3), 667–719.
Saleh, A., & Ndubisi, N. (2006). An evaluation of SME development in Malaysia.
Saputra, M. H., Utomo, M. N., & Ariansyah, K. (2024). Small and medium-sized enterprises dynamic capabilities and competitive advantage: The mediating effect of digitalisation. Entrepreneurial Business and Economics Review, 12(3), 45–60.
Sharma, G. D., Kraus, S., Talan, A., Srivastava, M., & Theodoraki, C. (2024). Navigating the storm: The SME way of tackling the pandemic crisis. Small Business Economics, 63(2), 221–241.
Sued, N. M. N. (2020). Barriers of supply chain digitalisation from the perspective of Malaysian SMEs. Journal of Technology Management and Technopreneurship, 8(1), 1–6.
Teece, D. J. (2020). Fundamental issues in strategy: Time to reassess? Strategic Management Review, 1(1), 103–139.
Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509–533.
The Edge Malaysia. (2024). Challenges ahead for SMEs. Retrieved from https://theedgemalaysia.com/article/challenges-ahead-smes
The Star Malaysia. (2024). MSMEs face increasing challenges due to rising logistics costs. Retrieved from https://www.thestar.com.my/business/business-news/2024/12/10/msmes-face-increasing-challenges-due-to-rising-logistics-costs
Tornatzky, L. G., & Fleischer, M. (1990). The processes of technological innovation. Lexington Books.
Massow, M., & Canbolat, M. (2014). A strategic decision framework for a value-added supply chain. International Journal of Production Research, 52, 1940 - 1955.
Zaman, S., Khan, S., & Kusi?Sarpong, S. (2023). Investigating the relationship between supply chain finance and supply chain collaborative factors. Benchmarking: An International Journal.
Mat, T. Z. T., Yahya, N., & Jusoh, R. (2025). Navigating Disruption: Strategic Decision-Making for Resilient Malaysian SMEs. International Journal of Academic Research in Economics and Management Sciences, 14(1), 01–14.
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