Innovating through Bricolage under Resource Constraints

Small and medium enterprises substantially accelerate the global economy and serve as a backbone to developing countries' economies. However, firms operate under severe resource constraints, and the lack of innovation and entrepreneurial orientation has sparked the failure rate in recent years. The current literature does not provide sufficient information on how firms operate under such constraints. Therefore, to fill the gap in research, we highlighted the role of “bricolage,” defined as “making do with whatever is at hand,” and posit it as the ultimate solution to deal with the crisis SMEs face due to lack of innovation. By drawing perspective from a resource-based and dynamic capabilities perspective, the present study has explored the impact of bricolage on innovation performance using data from 383 SMEs operating in Pakistan. Considering the hostility of the market, we have framed dynamic capabilities, entrepreneurial orientation, and environmental volatility as mediators and moderators’ factors in our model. The structural equation modelling technique was used to test the hypotheses. Evidence of benefits suggests that bricolage promotes innovation performance and entrepreneurial orientation through moderation and dynamic capabilities indirectly influencing the process. However, environmental volatility does not moderate the dynamic capabilities and innovation performance linkage. The study highlighted the significance of bricolage, which helps firms excel in resource constraints by “utilizing, recombining” the existing resources to create innovative outcomes. The study provides theoretical and practical implications to the relevant stakeholders.