Building upon the resource-based view of the firm, this study presents an empirical test of the impact of strategic flexibility and technological resources on the performance of small- and medium-sized enterprises (SMEs). A survey of small- and medium-sized manufacturing firms in the fabricated metal products sector found that synergy between strategic flexibility and technological resources had a positive and significant effect upon firm performance measured either by owners’ perception of overall performance or sales volume. The results indicated that SMEs should not only “have” technological resources but also be capable of using them to generate strategic options that help the firms maintain their competitiveness in the long run. At the same time, SMEs that possess strategic flexibility cannot fully recognize and maintain real options in positioning or repositioning itself in the markets without the use of complementary technological resources to create new innovations.
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