How Relational Capabilities Matter? Organizational Context and Performance of Internationally Oriented SMEs

The article sheds light on the organizational context enhancing development of relational capabilities and examines the significance of relational capabilities for SMEs’ financial and non-financial performance. The firm relational capability is measured separately in customers’ and suppliers’ networks. The research results reveal that fostering internal social capital coupled with the usage of economic motivators augment a firm relational capability in a supplier network, which in turn is associated with better performance results, both financial and non-financial. The results on relational capability in a customer network with respect to performance are less conclusive, indicating that vertical ties that internationally oriented SMEs develop (with suppliers and customers) are not of equal importance.