ICT Powered Strategic Flexibility System Dynamic Model: A Pillar for Economic Development in Micro and Small Enterprises

Abstract

Resource-Based View (RBV) of the firm in strategic management literature focuses on firm internal endowments in terms of resources, capabilities and dynamic capabilities for their development. By establishing a learning mechanism, where they are able to adapt and influence the environment, enterprises build a dynamic competence and sustainable competitive advantage. This paper posits that this dynamic competence or strategic flexibility as referred to by strategic management scholars is a phenomenon that needs to be understood by scholars and practitioners in MSEs so that effective intervention programs can be designed. The paper argues that by treating strategic flexibility as a CAS provides a methodology within which models based on known theories in strategic management are employed and tested using system dynamics. The paper also posits that System Dynamics (SD) modeling is a good modeling methodology that captures the dynamism in a CAS. The paper therefore presents a conceptual model for strategic flexibility and a system dynamic model that reveals the variables in play and their relationships. In so doing the paper exposes influence points in the CAS that act as intervention points by practitioners in strategic flexibility of firms. The paper presents ICTs as interventions at the influence points and presents a generic strategic flexibility system dynamic model that brings to play the impact of ICT.