The impact of organizational learning, on firm performance in the context of manufacturing SMES in Malaysia, mediating role of innovation capability

Abstract

There is a considerable signal from empirical studies that many factors influence firm performance. The purpose of this conceptual paper is to review the impact of one (1) important variable which is (organizational learning) on the performance of manufacturing SMEs operating in Malaysia. This conceptual paper explored the mediation role of innovation capability. The conceptual framework was developed after a systematic review of past literature. The present paper found the important influence of the study’s variables on firm performance. Furthermore, the study provided some understanding of how organizational learning affects SMEs' performance in Malaysia. Organizational learning plays an important role in influencing a Manufacturing SME's firm performance. Despite that, the mediation role of innovation capability is expected to strengthen the relationship between organizational learning and firm performance. The paper emphasizes the critical value of organizational learning and innovation capability for SMEs owner/managers consideration when acting on behalf of their company; failing which the SMEs could experience poor performance. Resource-Based View (RBV) theory was used to underlie the conceptual framework. In addition, some implications of this conceptual model for theory and practice are discussed.