COVID-19 operational disruption and SMEs' performance: the moderating role of disruption orientation and government support

Abstract

Purpose

Despite the growing unforeseen and catastrophic events that disrupt business operations, empirical studies on the impact of operational disruption (OD) on small and medium enterprises' (SMEs) performance dimensions are limited. The study aims to investigate the moderating effect of disruption orientation (DO) and government support (GS) on the relationship between coronavirus disease (COVID-19) OD and SMEs' performance.

Design/methodology/approach

Quantitative survey method was used to collect data from 170 SMEs in Nigeria, through hand-delivery questionnaires. Partial least square (PLS) structural equation modeling (SEM) was employed to analyze the data.

Findings

The result shows no significant relationship between COVID-19 OD, DO and GS with SMEs' financial performance (FP). However, the relationship between COVID-19 OD and non-financial performance (NFP) is negatively significant. The relationship between DO and NFP is positively significant. DO and GS have insignificant relationship with FP. Finally, DO and GS does not moderate any of the relationships between COVID-19 OD and the dimensions of SMEs' performance.

Practical implications

The result implies that health-related disruptions such as COVID-19 affect only the NFP of SMEs. However, supply chain managers and SMEs are encouraged to adopt DO to enhance NFP of firms.

Originality/value

The current study is the first to evaluate the impact of health-related disruptions on the two major dimensions of SMEs' performance (FP and NFP) by incorporating the moderating role of internal (DO) and external (GS) factors in to a single framework. However, the paper revealed new theoretical and practical knowledge by illuminating the absence of significant relationship between COVID-19 OD and SMEs' FP, implying that COVID-19 disruption does not significantly affect SMEs' FP.

Citation

Mahmoud, M.A., Mahmoud, A., Abubakar, S.L., Garba, A.S. and Daneji, B.A. (2022), "COVID-19 operational disruption and SMEs' performance: the moderating role of disruption orientation and government support", Benchmarking: An International Journal, Vol. 29 No. 9, pp. 2641-2664. https://doi.org/10.1108/BIJ-03-2021-0131