Integrating Dynamic Capability and Conservation of Resources (COR) Theory in Driving SME Innovation: Evidence from the Indonesian Coffee Industry
DOI:
https://doi.org/10.59890/ijma.v4i4.57Keywords:
Dynamic Capability, Conservation of Resources Theory, Ambidextrous Innovation, SME Performance, Coffee Industry, IndonesiaAbstract
Dynamic Capability (DC) and Conservation of Resources (COR) Theory both emphasize an organization’s ability to mobilize and safeguard valuable resources in dynamic environments. This study integrates these two perspectives to examine how dynamic capabilities—through resource acquisition, utilization, and reconfiguration—contribute to innovation and business performance among Indonesian coffee SMEs. Using a quantitative, explanatory design, data were collected from 370 coffee entrepreneurs and analyzed using Partial Least Squares–Structural Equation Modeling (PLS-SEM). The results indicate that sensing, seizing, and reconfiguring capabilities significantly enhance ambidextrous innovation, which in turn improves overall business performance (β = 0.980; p < 0.01). Furthermore, innovation mediates the relationship between dynamic capability and performance (β = 0.859; p < 0.01). These findings extend COR Theory by demonstrating that dynamic capability acts as a mechanism for resource conservation and renewal, while empirically validating how resource orchestration enables innovation under constraints.
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