Linking Top Management Team Potency, Corporate Social Responsibility, and Firm Performance in SMEs: The Role of Environmental Dynamism

Abstract

This study empirically validates the characteristics choices performance of upper echelons theory (UET) in small and medium-sized enterprises (SMEs) context. Specifically, the current study examines how SME’s top management team potency (TMTP) affects the strategic corporate social responsibility (CSR) choice to improve corporate growth. Furthermore, the moderator role of environmental dynamism (ED) on TMTP-CSR has also been investigated. Survey data gathered from 686 SMEs in China were analyzed. The results show a robust partial mediation effect of CSR on SME’s growth. Furthermore, ED was also found to positively moderate TMTP - CSR. Implications and future research directions are provided.