Research on World Agricultural Economy

Micro Foundations of Dynamic Capabilities in Agri-Food MSMEs: Hierarchy of Management and Marketing Tactics for Competitive and Performance

Suryani Dewi

Faculty of Agriculture and Forestry, Universitas Sulawesi Barat, Majene 91411, Indonesia

Arnita Irianti

Universitas Sulawesi Barat

Arifhan Ady DJ

Universitas Sulawesi Barat

DOI: https://doi.org/10.36956/rwae.v7i3.2893

Received: 6 November 2025; Published: 3 July 2026

Abstract

The agility to respond to market dynamics determines the resilience and sustainable performance of agri-food micro, small, and medium enterprises (MSMEs), especially in developing countries. The lack of capabilities of professional and skilled human resources is an obstacle to MSMEs taking agile steps to grow. The purpose of this study is to investigate the micro foundations of the dynamic capability framework, namely, management and marketing tactics for improving the competitive advantage and business performance of MSMEs. Amid the development of digital marketing research, this study explores marketing tactics in their entirety and examines their integration with fundamental management aspects within organizations. The research approach uses a quantitative method design with Partial Least Squares Equation Modelling (PLS-SEM) to process survey data collected from 95 coconut product-based MSMEs in Indonesia. The analysis shows that the model has predictive power of 87.3% of the variance in business performance. The micro foundation variable has a strong influence on competitive advantage and business performance. The study’s key findings show that management is the most critical factor in driving performance improvement. This research advances the dynamic capabilities framework (DCF) literature by empirically demonstrating that managerial competence represents the dominant capability for seizing and reconfiguring resources in resource-constrained emerging economies. It provides robust quantitative evidence from a vital yet understudied sector. The findings urge policymakers and development organisations to prioritise managerial capacity building over purely digital marketing interventions to foster competitiveness and long-term sustainability in similar emerging agri-food markets.

Keywords: Business Performance; Coconut Industry; Competitive Advantage; Dynamic Capabilities; Management; Marketing Tactics; Micro‑Foundation; MSMEs Agribusiness

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