The learning strategies and capacities of SMEs: an exploratory study in China

Small and medium-sized enterprises (SMEs) played a critical role in China’s market economy transformation after thousands of state-owned enterprises closed down. Firm knowledge learning in Chinese SMEs has increasingly attracted scholarly attention, as knowledge acquisition is a critical element of the business performance of Chinese SMEs. However, none of the previous studies have identified how learning strategies and learning capacities influence tacit and explicit knowledge acquisition in Chinese SMEs to improve their business performance; that is the gap this study is designed to fill. This study explores the influence of learning strategies from both the human and social capital perspectives. Additionally, the impact of learning capacities on the learning process is also examined. Qualitative in-depth interview-driven research on four sample Chinese SMEs from the non-manufacturing sector was conducted. Sixteen interviews, including with the owner-managers and senior management, provide the study’s data sources. This study confirms that knowledge acquisition, especially tacit knowledge, occurs mainly through informal experience learning and government, business, and social network ties. Additionally, learning capacities have a moderating effect on the learning process in SMEs. This analysis of learning capacities offers valuable insight into why SMEs find it difficult to acquire tacit knowledge and to articulate and store firm explicit knowledge. The proposed framework also makes practical contributions. It assists SME owners in managing their internal resources (human and financial) and external resources (social networks) to develop their competitive advantages and grow their businesses by acquiring knowledge.