The relationship of strategic network partner fit characteristics, open innovation and organisational performance of small and medium enterprises in Malaysia

Effectively planning for market turbulence and working with partners, as well as focusing on strategic network partner fit characteristics and open innovation are critical to small and medium enterprises success. However, this practice is lacking among Malaysian small and medium enterprises. Poor selection of partner qualities and delay in the implementation of open innovation influence firm’s performance. Therefore, this research aims to investigate the impact of strategic network partner fit characteristics and open innovation on the performance of small and medium enterprises, and the moderating role of open innovation on the relationship between the strategic network partner fit characteristics and the performance. Interorganisational relationships and resource-based theories underpinned the proposed model. Online questionnaires were distributed to 500 small and medium-sized owners or managers of multiple sub-sectors with 123 data were successfully collected. Data were analyzed using partial least squares-structural equation modeling via SmartPLS.mThis study found that strategic network partner fit characteristics and open innovation had a positive and significant impact on small and medium enterprises performance. In addition, open innovation moderates the relationship between strategic network partner fit characteristics and the performance of small and medium enterprises. This study helps to support small and medium enterprises in selecting the right network partners to reduce costs and minimize risks of local and international activities. Strengthened by inter-organisational relationship and resource-based theories, the model, open innovation (inbound and outbound) moderates the characteristics of strategic network partner fit (complementarity, compatibility and commitment) to enhance small and medium enterprises performance.