Linking environmental scanning and organizational innovation with competitive advantage: evidence from Egyptian SMEs

Abstract

Purpose: COVID-19 and its economic consequences have provoked critical views on worldwide sustainable management, especially in the Arab world. Post-COVID-19, sustainability becomes important because the pandemic taught humanity to set aside differences and work together to support the global sustainability agenda. On the organizational level, sustaining an organization's competitive advantage is a key to surviving a crisis. Therefore, this study explores the impact of environmental scanning on sustaining Egyptian manufacturing SMEs' competitive advantage through organizational innovation.Design/methodology/approach: The study adopts a cross-sectional design to collect data. A self-administered questionnaire was used to collect data from a sample of 249 Egyptian SMEs. The smart partial least square structural equation modeling technique (PLS-SEM) was employed to test hypotheses.Findings: Organizational innovation has an effect on competitive advantage. There is no direct effect of environmental scanning on competitive advantage. However, organizational innovation fully mediates the relationship between environmental scanning and competitive advantage.Research limitations/implications: The sample size was small, covering only Egyptian manufacturing SMEs. The results may differ in the service sector and in other countries. The study was cross-sectional and could not trace long-term effects of environmental scanning and organizational innovation on competitive advantage.Practical implications: In the face of crises, Egyptian SMEs' managers should regularly scan their environments to build organizational innovation and in turn sustain their competitive position.Originality/value: This study is amongst the first to investigate the role played by environmental scanning in sustaining Egyptian SMEs competitive advantage through the mediation of organizational innovation amidst the COVID-19 epidemic.