Model of Thai Small and Medium Sized Enterprises’ Organizational Capabilities: Review and Verification

Abstract

In today’s competitive environment, small and medium sized enterprises (SMEs) must focus on strengthening their organizational capabilities, considered to be a vital ingredient for building firms’ competitiveness. A number of factors may be deemed to be the drivers of organizational capabilities. Thus, this study was aimed at investigating and discussing those dimensions and their elements associated with organizational capabilities. The review of the literature indicates that the fundamental approach to build organizational capabilities rest heavily on organizational resources, organizational architecture, and organizational quality. The initial model was developed and proposed. Then, in-depth interviews with twenty Thai SMEs were carried out to verify the proposed model. Based on the in-depth interview results, key modifications were made to adjust the model and make it more practical. Financial resource, marketing resource, operational resource, and human resource are considered to be key elements of organizational resources whereas planning system, information system, compensation system, empowerment structure, learning culture, and teamwork culture are deemed to be key elements of organizational architecture. Finally, quality of the company and quality of products or services are believed to be key elements of organizational quality. Firms who can effectively and efficiently manage these elements of organizational capabilities will be able to compete and succeed in the market in the long run.