Organization-stakeholder relationship and performance of Iranian SMEs

Purpose: This study aims to explore the direct and indirect effects of organizational stakeholder’s relationship on performance through innovativeness and risk-taking among small and medium enterprises (SMEs). Design/methodology/approach: This study used the cluster sampling method to select the study sample and the questionnaire survey approach to 580 SMEs established in Tehran. A total of 150 completed questionnaires were returned. Partial least squares-structural equation modeling was administered to analyze data via the SmartPLS 3.0 software. Findings: The survey outcomes revealed that organization-stakeholder relationship had an indirect effect on performance through innovativeness and risk-taking. The results indicated positive links for organization-stakeholder relationship and innovativeness, as well as the organization-stakeholder relationship to risk-taking. Practical implications: This research is beneficial for entrepreneurs who wish to learn about the specific resources significant for venture growth, to devise effective strategies to expand their relationship with stakeholders and to consider the significance of the correlations established, in this study, through innovativeness and risk-taking. Originality/value: This research is one of the few attempts that have addressed the importance of innovativeness and risk-taking as the key mechanisms to transform the advantages of organization-stakeholder relationships to enhance performance.