Among the many approaches to leadership, servant leaders stand out for the emphasis they place on the importance of service to their followers, the organization, and the broader community. We develop and test a multilevel mediation model, in which the relationship between servant leadership and team performance is sequentially transmitted through individual‐level organizational citizenship behavior (OCB) and team‐based internal social capital. Multilevel structural equation modeling was applied to a sample of 343 teams, reflecting 835 respondents from various departments at 171 hotels in Spain; both top‐down (between team leaders and individual employees) and bottom‐up relationships (individual employee behavior and team outcomes) were assessed. As anticipated, individual‐level OCB and group‐level internal social capital fully mediated the positive effect of servant leadership on team performance. Our findings illustrate that servant leadership in the team‐based business enterprise context can foster virtuous individual‐level OCB to help build task‐focused community, in which leaders, followers, and teams can flourish for the common good. Thus, managers should know that serving their team members first and foremost is a positive for the flourishing of all involved. As such, policymakers should pursue communication and training initiatives to encourage the practice of servant leadership.

Despite the limited resources of small and medium-sized enterprises (SMEs), they can still manage to be competitive and survive in the current environment by implementing competitive strategies that lead to innovation and improve their market performance. The aim of this study is to examine and analyse the effect of business strategy on market performance in Spanish small and medium-sized entrepreneurial enterprises, and the mediating effect of innovation is explored as a solution to business crises. In addition, we analyse the moderating effect that the perceived risk of COVID-19 may have on this relationship, as well as whether the commercialisation capacity of SMEs exerts an impact and improves performance based on innovation. Taking 1,842 Spanish entrepreneurial firms with fewer than 250 employees as a reference and using partial least squares structural equation modelling (PLS-SEM), our study shows that entrepreneurial SMEs that apply a competitive strategy can achieve enhanced innovation. Moreover, this innovation has a direct and positive effect on the market performance of SMEs, and this effect is greater under higher marketing capability. Our findings suggest a heterogeneous effect on the impact of the perceived risk of COVID-19 on the strategy-innovation relationship. In entrepreneurial SMEs that adopt a differentiation strategy, the perceived risk has an enhancing impact, while in entrepreneurial SMEs that follow cost strategies, the effect is negative.

Small and medium-sized enterprises (SMEs) play a crucial role in supporting the country’s economy. However, Spanish SMEs have not developed their full potential. It is thus essential for managers to seek and adopt better strategies to be more successful. In today’s turbulent environments, digital transformation strategy is considered an important strategic competitive resource. Given its importance, managers are encouraged to develop their capabilities to deal with digitilization efficiently, leading them to be more innovative and obtain higher levels of organizational effectiveness. There is extensive research in the literature on the effect of digitalization strategy on organizational effectiveness, with it being considered a composite construct. Little research has been conducted, however, to examine the independent effects on its economic, human resources and internationalization dimensions. Based on the Input-Mediator-Output framework, this study aims to highlight the mechanisms through which digital transformation strategy improves organizational effectiveness. Specifically, this article examines (1) the direct effect of SMEs’ digital transformation strategy and organizational effectiveness on their economic, human resources and internationalization dimensions, and (2) the mediating role of firm innovation in these relationships. To test our hypotheses, we randomly selected SMEs operating in Spain from the INE 2022 database. The selection framework used was the SABI database developed by Faedpyme (2023). Once the data were filtered, information was obtained for 1,113 SMEs. To test our hypothesis, we used structural equation modeling (SEM) based on partial least squares (PLS) and Smart PLS 4.0.9.9. PLS-SEM is a robust statistical technique that allows for the positing of direct and mediated relationships simultaneously between the study variables. Our results revealed that digital transformation strategy has a positive impact on the economic, human resources and internationalization dimensions of organizational effectiveness. Furthermore, we found that firm innovation partially mediates the positive influence of digital transformation strategy and the three dimensions of organizational effectiveness. Thus, SMEs that wish to improve their effectiveness should orient their strategy towards higher levels of firm innovation. Testing this model contributes to the literature in two ways. First, it sheds new light on how digital transformation strategy fosters higher levels of organizational effectiveness in SMEs, specifically, in its economic, human resources and internationalization dimensions, which have not hitherto been analyzed in the literature. Second, our results add to the organizational effectiveness theory, which is dominated by research on large firms. They also extend the evidence that digital transformation strategy and firm innovation are positive for organizational effectiveness in SMEs.

Purpose: This article focusses on the hybrid strategy, a simultaneous combination of cost leadership and differentiation strategy. The study aims to examine the impact of hybrid strategy on firm performance through its anticipated positive effects on process and product innovation. In addition, we study the moderating role of adaptive capacity in the direct relationships of hybrid strategy with process and product innovation.Design/methodology/approach: Structural equation modelling was used to analyse 1,842 Spanish firms with fewer than 250 employees. We randomly selected small and medium-sized enterprises (SMEs) operating in Spain from the Spanish Central Business Directory (2021) database. The overall sample design was based on stratified sampling.Findings: We found that hybrid strategy is positively related to firm performance and to process and product innovation. Additionally, in firms implementing hybrid strategies, process innovation fostered firm performance. Finally, adaptive capacity strengthened the relationships of hybrid strategy with process and product innovation. This sheds light on how and when hybrid strategy is most effective in fostering SME performance.Practical implications: We highlight that SMEs need to establish strategies that use diverse resources and capabilities and not just generate competitive advantage using one strategy (cost leadership or differentiation strategy). This requires an agile and flexible systems and structures.Originality/value: Our research provides novel results by proposing the adoption of hybrid strategies instead of pure strategies (cost leadership and differentiation strategy) as a way for SMEs to survive during crises. Unlike “stuck in the middle” strategies, our study demonstrates the importance of hybrid strategies in a comprehensive model that links them to innovation and firm performance, with adaptive capacity being a determining factor.