Purpose This paper aims to examine how the integration of sustainable business strategies, modern technologies, flexible processes and production capacity impacts the performance of small and medium-sized enterprises (SMEs) in emerging economies. By examining these dimensions within the framework of strategic innovation operations management, the research aims to understand how SMEs can enhance their competitiveness, adaptability and long-term sustainability. Design/methodology/approach The study focuses on the manufacturing sector in Mexico, applying a quantitative methodology to provide empirical evidence on the extent to which these operational factors contribute to improved organisational performance. The sample size consisted of 207 SMEs, and the PLS Smart version 4.0 software was used to analyse the relationship between these factors. The theoretical framework was developed based on the resource-based, contingency and dynamic capabilities theories. Findings The research confirms that the integration of sustainable business strategies within operations management exerts a significant and substantive impact on SME performance. The structural model demonstrates strong explanatory power, with an adjusted R² of 0.508, indicating that more than half of the variance in SME performance is accounted for by the proposed predictors. These findings provide robust empirical support for the theoretical framework and highlight the strategic relevance of embedding sustainability principles directly into operational decision-making processes. Such alignment strengthens SMEs’ adaptability, operational efficiency and competitive positioning in dynamic and resource-constrained markets. Research limitations/implications A key limitation of this study is the reliance on managers’ self-reported performance measures. Although perceptual indicators are common in SME research and often correlate with objective data, they may still be influenced by self-reporting bias, social desirability or retrospective judgement. Despite procedural safeguards, such as anonymity and validated multi-item scales, common method variance cannot be fully excluded. Results should therefore be interpreted with caution. Future research should triangulate perceptual assessments with objective financial indicators to enhance measurement robustness. Practical implications Strategic innovation in operations management enables SMEs to streamline processes, reduce costs and enhance quality, thereby improving their competitiveness. Aligning innovation with sustainable operational practices supports better resource allocation and performance. By adopting flexible and responsive models, SMEs can quickly adapt to market changes and disruptions. Cultivating an innovation-driven culture promotes continuous improvement, enhances employee engagement and fosters long-term sustainability. Benchmarking against key findings enables SMEs to identify areas for growth and implement strategies that enhance innovation and operational performance. Overall, strategic innovation empowers SMEs to make smarter decisions and build resilient, competitive and sustainable businesses in dynamic environments. Originality/value This study contributes to a deeper understanding of the association between strategic innovation operations management and organisational performance, specifically within the SME context. Its originality lies in measuring this relationship and considering the emerging demands for a combined focus on sustainability, adaptability, technological transformation and competitiveness in a rapidly evolving business environment. While prior research has often focused on large corporations, this study focuses on the integration of innovation operations management in SMEs, a segment of the economy that is frequently underexplored yet vital.
Castorena et al. (Mon,) studied this question.