Supply Chain Flexibility and Indigenous Practices: Pathways to SME Competitiveness in Indonesia

The business environment is more unpredictable and volatile for small and medium enterprises (SMEs) in emerging markets, and sometimes it is not possible to adopt traditional, capital-intensive solutions to build resilience. This study is intended to analyze the impact of Indigenous Management Practices (IMP) on Relational Capital, Supply Chain Flexibility, Competitiveness, and the firm performance of fish-processing SMEs in Indonesia. The data were collected from 420 fish-processing SMEs and analyzed using partial least squares structural equation modeling (PLS-SEM). Results show that Indigenous Management Practices, Relational Capital, and Supply Chain Flexibility each positively enhance firm competitiveness, which in turn drives firm performance. These capabilities help SMEs improve competitiveness and performance. Relational and flexible capabilities become even more important in uncertain market conditions, as environmental turbulence further enhances their importance. The study uses the resource-based view, the relational view, and contingency theory to explain indigenous practices as low-cost dynamic capabilities in a resource-constrained environment. The results offer valuable insights for managers and policymakers: sustainable competitiveness can also be attained through community-based coordination and trust-based routines.