The Role of Strategic Agility and Economic Environment’s Friendliness-Hostility in Explaining Success of Polish SMEs

The main purpose of this chapter is to present and discuss two elements influencing the success of Polish SMEs: perceived environmental hostility and strategic agility. Strategic agility has been operationalized through the distinction between firms applying mono-strategy (less agile firms, doing business with customers on similar terms) or multi-strategy (more agile firms, differentiating conditions depending on the customer) in two aspects: price level and product quality level. Environmental friendliness-hostility has been operationalized as the properties of the external (or macro) environment in which firms operate as perceived by respondents. This concept is measured by bipolar scales reflecting the continuum from “friendly” or “benign” to “hostile” environment.

Research results show that, in the case of pricing strategy, the majority of firms were multi-strategic, i.e., they applied two or more price levels for the same product. But for the product quality strategies, the situation is opposite and mono-strategic firms prevail. Results of ANOVA analyses revealed that multi-strategic firms achieved better results (profits, sales dynamics) in the case of pricing strategy, but not in the case of product quality strategy. Firms operating in friendly environment achieved better results compared to firms operating in neutral or hostile environment. The differences in results between mono- and multi-strategic firms were particularly strong in favor of multi-strategic firms (both for price strategy and to a lesser extent for quality strategy) in hostile environment. Stepwise regression analyses performed separately for exporters and non-exporters with the two explanatory variables (strategic agility and environment characteristics) and one control variable (size of enterprise) transformed into binary variables show that strategic agility and environment are significant but weak predictors of market performance.