RETHINKING RESOURCES: THE MEDIATING ROLE OF BRICOLAGE IN THE FINANCIAL SUCCESS OF SMES

Abstract

In today’s resource constraint environment, it has become very difficult for small and medium enterprises (SMEs) to gain success. Despite the recognition, the importance of SMEs in a developing country like Pakistan it has been observed that ratio of SMEs failure is 95% in their first five years. Grounded in the resource orchestration theory, this study investigates and tries to address the literature gap empirically that how resource bricolage mediates the relationship between financial resources and the financial performance of SMEs in Pakistan. Resource orchestration theory highlights the relation of financial resources in attaining success while on other hand also investigate the mediating role of resource bricolage which emphasizes on the efficient management, configuration, and utilization of financial resources. In this scarce environment, resource bricolage is the innovative and adaptable repurposing of existing financial resources to address new challenges may be an essential process by which financial resources are converted into better financial outcomes. Data were collected from a sample of Pakistani SMEs by using quantitative methodologies. The findings show that financial resources have a strong and significant influence on financial performance. More importantly, results also confirmed that the resource bricolage partially mediates these relationships, highlighting its role in translating SMEs resourcefulness into performance outcomes, suggesting that the creative and flexible deployment of financial resources amplifies the positive impact of financial capital on firm financial performance. The findings enriched the theoretical understanding of bricolage, determining how improvisation of resource bricolage concept transforms financial inputs into financial benefits. The study emphasizes the necessity of SME managers on cultivating a bricolage-oriented mindset that promotes flexibility, innovation, and resourcefulness. Overall, the study extends the discourse to the existing literature about resource orchestration by emphasizing the strategic management of scarce financial resources, rather than their absolute availability, as a key predictor of company performance.

Keywords: Resource Orchestration Theory, Financial Resources, Resource Bricolage, Financial Performance, SMEs.