Dynamic Capabilities Reconfiguration and Strategic Resilience in Sustaining MSME Business Viability in the Post-Disruption Economy Era

Abstract

Post-disruption business environmental turbulence and rapid artificial intelligence accelerations require Micro, Small, and Medium Enterprises (MSMEs) to transcend static operational routines by continuously reconfiguring dynamic capabilities. Sensing and seizing emerging market opportunities are imperative for cultivating strategic resilience to ensure long-term business viability. This study investigates the impact of dynamic capabilities reconfiguration on MSME business viability, examining strategic resilience as a mediating mechanism. An explanatory quantitative survey was administered to 190 MSME owners and executives across diverse sectors (culinary, retail trade, agribusiness, handicrafts, and digital services) in North Sulawesi who navigated and adapted through economic volatility. The empirical data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) in SmartPLS 4.0. The findings confirm that dynamic capabilities reconfiguration exerts a robust positive effect on strategic resilience (β = 0.612, p < 0.001) and business viability directly (β = 0.228, p < 0.001). Furthermore, strategic resilience significantly fosters business viability (β = 0.524, p < 0.001) and serves as a significant partial mediator linking dynamic capabilities to viability outcomes (β = 0.321, p < 0.001). The structural model explains 58.8% of the variance in strategic resilience (R² = 0.588) and 67.2% in business viability (R² = 0.672). These insights validate that an entrepreneur’s ability to reorganize supply networks and diversify digital revenue channels forms the foremost defense against enterprise failure.