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<article article-type="research-article" xmlns:xlink="http://www.w3.org/1999/xlink" xmlns:mml="http://www.w3.org/1998/Math/MathML" xml:lang="en">
<front>
<journal-meta>
<journal-id journal-id-type="publisher-id">SAJEMS</journal-id>
<journal-title-group>
<journal-title>South African Journal of Economic and Management Sciences</journal-title>
</journal-title-group>
<issn pub-type="ppub">1015-8812</issn>
<issn pub-type="epub">2222-3436</issn>
<publisher>
<publisher-name>AOSIS</publisher-name>
</publisher>
</journal-meta>
<article-meta>
<article-id pub-id-type="publisher-id">SAJEMS-29-6691</article-id>
<article-id pub-id-type="doi">10.4102/sajems.v29i1.6691</article-id>
<article-categories>
<subj-group subj-group-type="heading">
<subject>Original Research</subject>
</subj-group>
</article-categories>
<title-group>
<article-title>Role of network capability in the relationship between digital ambidexterity and small and medium enterprises&#x2019; business performance in an emerging economy</article-title>
</title-group>
<contrib-group>
<contrib contrib-type="author" corresp="yes">
<contrib-id contrib-id-type="orcid">https://orcid.org/0000-0001-6284-1970</contrib-id>
<name>
<surname>Chigori</surname>
<given-names>Darlington T.</given-names>
</name>
<xref ref-type="aff" rid="AF0001">1</xref>
</contrib>
<contrib contrib-type="author">
<contrib-id contrib-id-type="orcid">https://orcid.org/0000-0002-4139-4224</contrib-id>
<name>
<surname>Chinyamurindi</surname>
<given-names>Willie T.</given-names>
</name>
<xref ref-type="aff" rid="AF0001">1</xref>
</contrib>
<contrib contrib-type="author">
<contrib-id contrib-id-type="orcid">https://orcid.org/0000-0002-6041-5510</contrib-id>
<name>
<surname>Rungani</surname>
<given-names>Ellen C.</given-names>
</name>
<xref ref-type="aff" rid="AF0002">2</xref>
</contrib>
<aff id="AF0001"><label>1</label>Department of Applied Management, Administration and Ethical Leadership, Faculty of Management and Commerce, University of Fort Hare, East London, South Africa</aff>
<aff id="AF0002"><label>2</label>School of Management Sciences, Faculty of Management and Commerce, North-West University, Mahikeng, South Africa</aff>
</contrib-group>
<author-notes>
<corresp id="cor1"><bold>Corresponding author:</bold> Darlington Chigori, <email xlink:href="dchigori@ufh.ac.za">dchigori@ufh.ac.za</email></corresp>
</author-notes>
<pub-date pub-type="epub"><day>15</day><month>07</month><year>2026</year></pub-date>
<pub-date pub-type="collection"><year>2026</year></pub-date>
<volume>29</volume>
<issue>1</issue>
<elocation-id>6691</elocation-id>
<history>
<date date-type="received"><day>29</day><month>11</month><year>2025</year></date>
<date date-type="accepted"><day>09</day><month>04</month><year>2026</year></date>
</history>
<permissions>
<copyright-statement>&#x00A9; 2026. The Authors</copyright-statement>
<copyright-year>2026</copyright-year>
<license license-type="open-access" xlink:href="https://creativecommons.org/licenses/by/4.0/">
<license-p>Licensee: AOSIS. This work is licensed under the Creative Commons Attribution 4.0 International (CC BY 4.0) license.</license-p>
</license>
</permissions>
<abstract>
<sec id="st1">
<title>Background</title>
<p>Small and medium enterprises (SMEs) in emerging economies encounter resource constraints, impairing performance. In this digital age, resource scarcity is a significant barrier to SMEs competing effectively in the global market.</p>
</sec>
<sec id="st2">
<title>Aim</title>
<p>The study addresses a critical knowledge gap regarding how SMEs can leverage network capabilities (NCs) to enhance the effectiveness of digital ambidexterity (DA) and improve SME business performance (SME BP).</p>
</sec>
<sec id="st3">
<title>Setting</title>
<p>The article examined the role of NC in the relationship between DA and SME BP.</p>
</sec>
<sec id="st4">
<title>Method</title>
<p>The study employed a quantitative cross-sectional design, sampling 370 owners and managers. The data were analysed through regression analysis.</p>
</sec>
<sec id="st5">
<title>Results</title>
<p>Digital ambidexterity had a significant direct positive effect on the mediator variable, NC. Network capability had a significant positive effect on SMEs&#x2019; BP. When the mediator variable NC was controlled for, the mediation analysis indicated that DA was a significant predictor of SMEs&#x2019; BP.</p>
</sec>
<sec id="st6">
<title>Conclusion</title>
<p>Policymakers should promote SMEs&#x2019; DA onboarding initiatives by offering tax breaks to collaborations between large firms and indigenous SMEs. Small and medium enterprises in emerging economies should utilise their networking capabilities to support DA initiatives.</p>
</sec>
<sec id="st7">
<title>Contribution</title>
<p>The findings are significant for SME managers and owners, who should carefully utilise networks to increase their DA and business performance.</p>
</sec>
</abstract>
<kwd-group>
<kwd>network capability</kwd>
<kwd>SMEs</kwd>
<kwd>business performance</kwd>
<kwd>digital ambidexterity</kwd>
<kwd>digital innovation</kwd>
</kwd-group>
<funding-group>
<funding-statement><bold>Funding information</bold> This research received no specific grant from any funding agency in the public, commercial or not-for-profit sectors.</funding-statement>
</funding-group>
</article-meta>
</front>
<body>
<sec id="s0001">
<title>Introduction</title>
<sec id="s20002">
<title>Background</title>
<p>Firms in emerging economies face unique challenges stemming from environmental dynamism, limited resources, uncertain conditions, and intense competition, necessitating swift strategic innovation decisions to ensure survival and growth (Kyrdoda, Balzano &#x0026; Marzi <xref ref-type="bibr" rid="CIT0024">2023</xref>; Yunita et al. <xref ref-type="bibr" rid="CIT0060">2023</xref>). Small and medium enterprises (SMEs) in emerging economies like South Africa encounter challenges such as limited product innovation (Sarfo, Manesh &#x0026; Caputo <xref ref-type="bibr" rid="CIT0037">2024</xref>), limited technology adoption, human resource shortages, financial resource constraints (Mhlongo &#x0026; Daya <xref ref-type="bibr" rid="CIT0029">2023</xref>), restricted market penetration, cyber-attacks, and operational uncertainty. Market restrictions compound these challenges and necessitate innovative strategies for survival and growth (Partanen et al. <xref ref-type="bibr" rid="CIT0035">2019</xref>). However, SMEs in these contexts struggle to apply existing knowledge effectively to innovation amidst such uncertainty, especially in resource-constrained countries such as South Africa (Cenamor, Parida &#x0026; Wincent <xref ref-type="bibr" rid="CIT0003">2019</xref>; Zacca, Dayan &#x0026; Ahrens <xref ref-type="bibr" rid="CIT0061">2015</xref>). This signifies the need for SMEs to develop strategic capabilities that enable agility, adaptability, and competitive resilience. It becomes imperative for these firms to foster a culture of innovation and agility to adapt to the rapidly evolving landscape. Many SMEs seek to discover their niches to establish a competitive advantage (Chigori <xref ref-type="bibr" rid="CIT0004">2023</xref>; Galli-Debicella <xref ref-type="bibr" rid="CIT0014">2021</xref>).</p>
<p>In today&#x2019;s digital age, reliance on existing technologies requires SMEs to have human resources management skills. They must also explore new technologies and adapt to changing market dynamics to stay competitive (Indrawati, Caska &#x0026; Suarman <xref ref-type="bibr" rid="CIT0017">2020</xref>). One increasingly significant capability in line with these challenges is digital ambidexterity (DA), which is the ability to exploit existing digital technologies and explore new digital technologies (Costa, Soares, &#x0026; De Sousa <xref ref-type="bibr" rid="CIT0007">2020</xref>). However, for SMEs to develop and deploy DA, they need significant resources, which many SMEs lack. Partanen et al. (<xref ref-type="bibr" rid="CIT0035">2019</xref>) confirm the struggle with concurrent exploitation and exploration strategies due to resource constraints. Developing DA requires a strategic approach that balances immediate goals with a long-term vision and invests in necessary resources and capabilities (Choi, Ha &#x0026; Kim <xref ref-type="bibr" rid="CIT0006">2021</xref>; Wang, Li &#x0026; Qi <xref ref-type="bibr" rid="CIT0054">2023</xref>). This strategy entails thoroughly assessing the current technological landscape and identifying opportunities to leverage existing technologies effectively through network capabilities (NCs).</p>
<p>To assist SMEs in addressing their internal limitations, NC, which is the firm&#x2019;s ability to build and leverage inter-firm relationships, is acknowledged by researchers (Liao, Hu &#x0026; Wei <xref ref-type="bibr" rid="CIT0026">2023</xref>; Shu, Ren &#x0026; Zheng <xref ref-type="bibr" rid="CIT0041">2018</xref>). Networking capabilities have been cited as central to engaging with other businesses and industry experts, providing SMEs with access to new ideas, resources, and market opportunities previously beyond their reach (Audretsch et al. <xref ref-type="bibr" rid="CIT0001">2023</xref>; Parida et al. <xref ref-type="bibr" rid="CIT0034">2016</xref>). These networks are crucial in eliminating resource constraints and facilitating knowledge creation by providing access to diverse and valuable information across organisational boundaries. Through such collaborations, SMEs can enhance their innovation capabilities and improve their chances of success in digital exploitation and digital exploration strategies (Audretsch et al. <xref ref-type="bibr" rid="CIT0001">2023</xref>; Costa et al. <xref ref-type="bibr" rid="CIT0007">2020</xref>). Learning through collaboration and information sharing is crucial for SMEs to remain competitive amid ever-changing market conditions (Chigori <xref ref-type="bibr" rid="CIT0004">2023</xref>).</p>
<p>Thus, leveraging NC becomes imperative for SMEs in emerging economies to navigate various complexities (poor product innovations (Sarfo et al. <xref ref-type="bibr" rid="CIT0037">2024</xref>), technology adaptation, human resources shortages, financial resources (Mhlongo &#x0026; Daya <xref ref-type="bibr" rid="CIT0029">2023</xref>), restricted market penetration, cyber-attacks, and operational uncertainty) and ultimately ensuring their long-term viability and growth.</p>
<p>Small and medium enterprises can benefit from employing digital exploration and exploitation initiatives to shape their strategies in response to economic pressures (Guo et al. <xref ref-type="bibr" rid="CIT0016">2020</xref>; Wei, Yi &#x0026; Guo <xref ref-type="bibr" rid="CIT0055">2014</xref>). Given the complexities of managing technology in SMEs, the concept of a firm&#x2019;s NC becomes crucial for enhancing visibility and success.</p>
<p>Despite the growing body of literature on ambidexterity and NC, little is known about the relationship between DC and NC. It is worth noting that limited knowledge exists on how NC moderates the relationship between DA and business performance (BP) in SMEs within emerging markets (Chigori <xref ref-type="bibr" rid="CIT0004">2023</xref>). Most existing studies examine these constructs in isolation or apply them in large firms in developed countries, which limits the applicability of the findings to SME contexts such as South Africa, where economic volatility and resource scarcity prevail. Therefore, a critical knowledge gap exists regarding how SMEs can leverage network-based strategies to enhance the effectiveness of DA and improve SME performance. This study addressed this gap by exploring the impact of NC on the relationship between DA and SME BP.</p>
</sec>
<sec id="s20003">
<title>Theoretical background and hypotheses development</title>
<p>Scholars view NC and DA through different theoretical lenses.</p>
<p>Some of the key theories that explain these constructs are the knowledge creation theory (Walter et al. <xref ref-type="bibr" rid="CIT0053">2006</xref>; Wang et al. <xref ref-type="bibr" rid="CIT0054">2023</xref>), social ties theory (Partanen et al. <xref ref-type="bibr" rid="CIT0035">2019</xref>), the resource-based view (RBV) (Jugdev &#x0026; Mathur <xref ref-type="bibr" rid="CIT0021">2013</xref>; Walter et al. <xref ref-type="bibr" rid="CIT0053">2006</xref>), and the dynamic capabilities theory (DC) (Schoemaker, Heaton &#x0026; Teece <xref ref-type="bibr" rid="CIT0040">2018</xref>; Shuen, Feiler &#x0026; Teece <xref ref-type="bibr" rid="CIT0042">2014</xref>; Teece <xref ref-type="bibr" rid="CIT0045">2007</xref>). These theories converge on a key principle: Firms must develop capabilities to access, integrate, and reconfigure internal and external resources. The current study is grounded within the RBV and DC perspectives. The RBV framework informs how firms achieve sustainable advantage through valuable, rare, inimitable, and non-substitutable endeavours (Barney <xref ref-type="bibr" rid="CIT0002">1991</xref>). The different valuable, rare, inimitable, and non-substitutable vary from physical assets, human resources, skills, and firm competencies, which SMEs lack due to resource scarcity. The RBV overlooks the reality that business environments are always changing. The DC view, on the other hand, emphasises how firms reconfigure their resource base over time in changing environments. For instance, Teece, Pisano &#x0026; Shuen (<xref ref-type="bibr" rid="CIT0046">1997</xref>) view DC as processes that enable firms to build, integrate, and reconfigure internal and external competences to address market change. Eisenhardt and Martin (<xref ref-type="bibr" rid="CIT0010">2000</xref>) similarly characterise DC as the firm&#x2019;s processes for reconfiguring, integrating, acquiring and releasing resources to match market changes. Based on the preceding view, DA and NC are conceptualised as dynamic capabilities comprising routines through which a firm alters its resource configurations in a turbulent context.</p>
<p>As a dynamic capability, DA facilitates sensing technological opportunities and recombining digital resources with existing processes. Network capability is the firm&#x2019;s ability to develop and leverage inter-organisational relationships (Walter et al. <xref ref-type="bibr" rid="CIT0053">2006</xref>). Network capability enables the firm to access complementary external resources and knowledge, facilitating innovation and adaptation (Partanen et al. <xref ref-type="bibr" rid="CIT0035">2019</xref>). Both DA and NC embody resource integration and reconfiguration processes consistent with DC theory: DA supports sensing and seizing digital opportunities, while NC provides the platform to integrate these new resources through relationships (Eisenhardt &#x0026; Martin <xref ref-type="bibr" rid="CIT0010">2000</xref>). Walter et al. (<xref ref-type="bibr" rid="CIT0053">2006</xref>) found that a firm&#x2019;s NC ensures the capacity to develop and utilise ties, which is significant for underscoring NC as a performance-relevant capability.</p>
<p>Within this framing, causal logic shows that DA influences NC and later performance. Thus, DA enhances NC by generating rich information flows and connective technology (e.g. digital platforms and communication tools) that strengthen external linkages. In other words, by exploiting and exploring digital tech, firms produce knowledge and connectivity that deepen their network relationships. The inclusion of knowledge management (KM) is theorised as a complementary dynamic capability that underpins these processes. Effective KM routines (e.g. knowledge sharing, codification, learning systems) ensure that knowledge generated by digital exploration and network interactions is captured and disseminated (Walter et al. <xref ref-type="bibr" rid="CIT0053">2006</xref>). Partanen et al. (<xref ref-type="bibr" rid="CIT0035">2019</xref>) further reinforce KM, suggesting that solid social ties facilitate knowledge exchange, collaboration, and resource sharing among firms, leading to the development of robust capabilities.</p>
<p>This view aligns with the ideas of Walter et al. (<xref ref-type="bibr" rid="CIT0053">2006</xref>). It is further reinforced by Wang et al. (<xref ref-type="bibr" rid="CIT0054">2023</xref>), who state that firms can systematically create and leverage knowledge to enhance their capabilities. Furthermore, as elucidated by Jugdev and Mathur (<xref ref-type="bibr" rid="CIT0021">2013</xref>) and Walter et al. (<xref ref-type="bibr" rid="CIT0053">2006</xref>), the RBV underscores the strategic allocation of resources to build and sustain competitive advantages, a process closely intertwined with NC.</p>
</sec>
<sec id="s20004">
<title>Digital ambidexterity and small and medium enterprises&#x2019; business performance</title>
<p>Digital ambidexterity enables firms to explore both existing and new digital technologies simultaneously (Costa et al. <xref ref-type="bibr" rid="CIT0007">2020</xref>). This concept is characterised by a balance between exploitation (leveraging existing resources) and exploration (seeking new opportunities) (Turner &#x0026; Lee-Kelley <xref ref-type="bibr" rid="CIT0049">2013</xref>). This dual approach is particularly relevant in SMEs due to their unique challenges and resource constraints. In SME settings, this balance takes on added impact as it balances the tension between limited resources and the need to innovate. Small and medium enterprises, constrained by limited resources, encounter an acute dilemma between exploiting current capabilities and exploring new possibilities (Costa et al. <xref ref-type="bibr" rid="CIT0007">2020</xref>). Achieving this balance is challenging and requires a rethinking of management practices, especially for SMEs that lack the resources of larger firms.</p>
<p>The concept extends beyond traditional business operations into the digital realm, where DA becomes critical (Mustafa et al. <xref ref-type="bibr" rid="CIT0031">2022</xref>).</p>
<p>Digital ambidexterity can significantly improve SME performance, but it can be challenging due to resource constraints and a lack of credibility (Jing, Zhang &#x0026; Ma <xref ref-type="bibr" rid="CIT0018">2023</xref>; Skare, De Las Mercedes De Obesso &#x0026; Ribeiro-Navarrete 2022). Digital exploration can be costly and risky, while digital exploitation requires efficient optimisation of existing technologies and resources. Strategic partnerships and networks can help SMEs extend their capabilities beyond immediate constraints (Song, Yang &#x0026; Yu <xref ref-type="bibr" rid="CIT0044">2020</xref>; Vrontis et al. <xref ref-type="bibr" rid="CIT0051">2020</xref>), exploring new markets and technologies without incurring total costs (Faroque et al. <xref ref-type="bibr" rid="CIT0012">2022</xref>; Song et al. <xref ref-type="bibr" rid="CIT0044">2020</xref>; Walter et al. <xref ref-type="bibr" rid="CIT0053">2006</xref>). However, ambidexterity requires careful management and a tailored approach to each SME&#x2019;s unique circumstances.</p>
<p>Despite the challenges, SMEs engaging in DA can improve operational efficiency and adaptability, enhancing BP. However, successfully pursuing DA requires strategic choices and effective capability deployment. This approach, while challenging, can enable SMEs to navigate the complexities of today&#x2019;s business landscape more effectively. Therefore, the researchers suggest that:</p>
<p><bold>Hypothesis 1:</bold> SMEs&#x2019; pursuit of digital ambidexterity is positively associated with their business performance.</p>
</sec>
<sec id="s20005">
<title>Digital ambidexterity and network capability</title>
<p>Digital ambidexterity not only influences internal processes but also reshapes how SMEs interact externally. Digitally ambidextrous firms often engage in cross-boundary collaborations and knowledge exchange, both of which are foundational to NC (De Falco et al. <xref ref-type="bibr" rid="CIT0008">2017</xref>). Through digital tools, SMEs can enhance their ability to manage external relationships, foster trust, and gather structured information from their business partners.</p>
<p>Through this process, DA strengthens the SME&#x2019;s ability to form and leverage networks.</p>
<p>Digital platforms continue to take precedence in the business environment. While digital issues were previously considered technical Information Communication and Technology (ICT) issues, they have become a lifeline for success-seeking firms (De Falco et al. <xref ref-type="bibr" rid="CIT0008">2017</xref>). The widespread use of digital platforms has re-engineered how value is created (Jing et al. <xref ref-type="bibr" rid="CIT0018">2023</xref>). Businesses increasingly base their value sources on the relationships and information flows between organisational units and partners. Small and medium enterprises can benefit from such digital exploitation and exploration of networks, considering their restricted access to resources (Cenamor et al. <xref ref-type="bibr" rid="CIT0003">2019</xref>).</p>
<p>Digital ambidexterity is essential for digital businesses, involving shared group coordination, external knowledge communication, and relational handling of diverse individuals and partners (Cenamor et al. <xref ref-type="bibr" rid="CIT0003">2019</xref>; Costa et al. <xref ref-type="bibr" rid="CIT0007">2020</xref>). It involves leveraging traditional and online interactions to build relationships and stay competitive. Digital adoption can increase innovation, collaboration, and productivity, improving outcomes and performance (J&#x00F6;hnk et al. <xref ref-type="bibr" rid="CIT0019">2022</xref>). Digital ambidexterity also aids in internal communication, resource coordination, and adapting to changing market conditions. Through DA, digital competencies enable firms to manage diverse partner networks across national boundaries (Jing et al. <xref ref-type="bibr" rid="CIT0018">2023</xref>). In line with the above, digital ambidextrous capability enables SMEs to engage more effectively with external partners and better gather and organise structured information from them.</p>
<p>Empirical work on entrepreneurial and manufacturing SMEs shows that ambidextrous firms depend on well-developed NC to source diverse external knowledge, orchestrate partner interactions, and translate digital experimentation into marketable value propositions (Cenamor et al. <xref ref-type="bibr" rid="CIT0003">2019</xref>). At the same time, engaging concurrently in digital exploration and exploitation deepens a firm&#x2019;s relational routines, strengthening its aptitude for selecting, coordinating, and reconfiguring partners, which, in turn, magnifies the performance payoffs of both capabilities (Partanen et al. <xref ref-type="bibr" rid="CIT0035">2019</xref>). Evidence that NC positively moderates the link between partner diversity and growth (Parida et al. <xref ref-type="bibr" rid="CIT0034">2016</xref>) further implies that it converts the breadth of digital-ecosystem ties into scalable revenue and innovation benefits when combined with DA. In short, the relationship is complementary and synergistic: strong NC enables DA to flourish, while sustained ambidextrous activity continuously upgrades the firm&#x2019;s NC, producing superior innovation and growth outcomes. These reasons show that embracing DA can enhance NC. These different opinions suggest that:</p>
<p><bold>Hypothesis 2:</bold> There is a direct relationship between digital ambidexterity and network capability.</p>
</sec>
<sec id="s20006">
<title>Network capability and small and medium enterprises&#x2019; business performance</title>
<p>Network capability enables SMEs to acquire knowledge, access external resources, and co-create value with business partners through collaboration and relationship building. Networks foster growth through inter-firm connections that enable access to resources and capabilities (Mu <xref ref-type="bibr" rid="CIT0030">2013</xref>). Through inter-firm connections, the firm enhances its ability to procure and use crucial knowledge for its success and competitiveness (Sarwar et al. <xref ref-type="bibr" rid="CIT0038">2021</xref>; Venugopal et al. <xref ref-type="bibr" rid="CIT0050">2020</xref>). Researchers and practitioners constantly realise the importance of efficient and effective KM (Farida &#x0026; Nuryakin <xref ref-type="bibr" rid="CIT0011">2021</xref>; Majid et al. <xref ref-type="bibr" rid="CIT0027">2020</xref>; Sarwar et al. <xref ref-type="bibr" rid="CIT0038">2021</xref>; Shu et al. <xref ref-type="bibr" rid="CIT0041">2018</xref>). The firm&#x2019;s connections, networks, and contacts with different stakeholders (other firms, customers, suppliers, and state institutions) significantly facilitate the procurement of scarce information and resources (Sarwar et al. <xref ref-type="bibr" rid="CIT0038">2021</xref>; Zhang &#x0026; Du <xref ref-type="bibr" rid="CIT0062">2019</xref>; Zhang et al. <xref ref-type="bibr" rid="CIT0063">2016</xref>). However, networks offer less value to large firms with significant financial and managerial resources for obtaining and processing information (Del Giudice et al. <xref ref-type="bibr" rid="CIT0009">2018</xref>). Alternatively, SMEs&#x2019; small size hinders progress.</p>
<p>Network capability enables SMEs to form and mobilise partnerships that grant access to complementary resources and knowledge, thereby co-creating value even under resource constraints (Mu <xref ref-type="bibr" rid="CIT0030">2013</xref>). Network capability opens access to scarce knowledge and resources by building strong inter-firm relationships. This relational capability fosters innovation (Zhang &#x0026; Du <xref ref-type="bibr" rid="CIT0062">2019</xref>) by helping firms sense new opportunities and enhance organisational dynamism. These external ties are especially critical given SMEs&#x2019; limitations in size and internal resources. Knowledge management routines such as knowledge sharing and codification enable organisations to capture, organise, and disseminate both explicit and implicit knowledge internally and across their networks. These routines thus bolster DA by driving both exploitative innovation (through optimising existing knowledge and best practices) and exploratory innovation (through integrating external knowledge) (Walter et al. <xref ref-type="bibr" rid="CIT0053">2006</xref>), and they reinforce NC by ensuring effective knowledge exchange and collaboration among partners.</p>
<p>Therefore, the harmony between NC and KM is crucial for performance in DA. Well-developed NC allows SMEs to identify new opportunities, manage information flows, and stimulate innovation. Conversely, weak network structures may impede resource acquisition and innovation, particularly for SMEs lacking internal depth. Acquiring knowledge through NC from various sources ensures the transformation of firms and the improvement of BP. Thus, it is hypothesised that:</p>
<p><bold>Hypothesis 3:</bold> Network capability has a direct relationship with small and medium enterprises&#x2019; business performance.</p>
</sec>
<sec id="s20007">
<title>Mediation role of network capability</title>
<p>While DA contributes directly to performance, its full value may be realised through mediating impact on NC.</p>
<p>Integrating social tie theory and NC to understand resource acquisition presents a compelling argument, yet warrants critical examination. While the theory aptly underscores the need to leverage external networks for resource access, particularly for SMEs (Farida &#x0026; Nuryakin <xref ref-type="bibr" rid="CIT0011">2021</xref>; Majid et al. <xref ref-type="bibr" rid="CIT0027">2020</xref>; Sarwar et al. <xref ref-type="bibr" rid="CIT0038">2021</xref>; Shu et al. <xref ref-type="bibr" rid="CIT0041">2018</xref>), it may oversimplify the complexities involved in managing these networks (Partanen et al. <xref ref-type="bibr" rid="CIT0035">2019</xref>). The assumption that firms can readily access and exploit external resources through networks may not account for inherent challenges, such as trust-building, potential opportunism, and power imbalances among entities (Parida et al. <xref ref-type="bibr" rid="CIT0034">2016</xref>). Additionally, although useful, the dichotomy between strong and weak ties might not fully capture the nuanced, evolving nature of business relationships (Field &#x0026; Scott <xref ref-type="bibr" rid="CIT0013">1981</xref>). The emphasis on networking also raises questions about the resource drain involved in establishing and maintaining such networks, potentially diverting focus from core operational efficiencies (Wang et al. <xref ref-type="bibr" rid="CIT0054">2023</xref>). The model assumes strategic intent and capability in SMEs, overlooking structural and technological constraints that may limit the practicality of networking strategies. Therefore, while the framework provides valuable insights, its application requires a nuanced understanding of the firm&#x2019;s specific context, capabilities, and inherent trade-offs in network-based resource development. Therefore, it can be suggested that:</p>
<p><bold>Hypothesis 4</bold>: Networking capability mediates the relationship between digital ambidexterity and SME business performance.</p>
</sec>
</sec>
<sec id="s0008">
<title>Methods</title>
<sec id="s20009">
<title>Research design and participants</title>
<p>The data collection yielded 390 fully completed questionnaires. Participants were invited to participate voluntarily, in accordance with ethical clearance number CHI051SCHI01. This study focused on Eastern Cape SME business owners and managers chosen for their expertise in their respective companies and their involvement in inter-firm collaboration. Respondents to the cross-sectional survey were sampled using convenience and snowball sampling. Small- and medium-enterprise business owners and managers were targeted for their expertise in firm strategies and inter-firm collaboration. Selecting them as respondents ensured informed and reliable responses. The selection of convenience and snowball sampling suited the study due to the absence of a comprehensive SME sampling frame. The chosen sampling ensured efficient access to a hard-to-reach population while maintaining sufficient sample size for analysis.</p>
</sec>
<sec id="s20010">
<title>Data collection and analysis</title>
<p>The study data were collected from South Africa, specifically the Eastern Cape province. The data were collected from various business districts, as shown in the preceding sections. To fully understand the data, software packages including MS Excel (Microsoft Inc., Redmond, WA, US), Statistical Package for the Social Sciences (SPSS) version 27 (IBM, Armonk, NY, US), the Hayes PROCESS Macro, and Analysis of Moment Structures (AMOS) (IBM, Armonk, NY, US) were used for the analysis. The business districts of respondents are presented in <xref ref-type="fig" rid="F0001">Figure 1</xref>. The chart shows that the majority of respondents (37.7&#x0025;; <italic>n</italic> = 147) were in the Alfred Nzo district. Of the 390 respondents, 81 respondents (20.8&#x0025;) had their businesses in the Joe Gqabi district, while 50 respondents (12.8&#x0025;) were in the OR Tambo district (see <xref ref-type="table" rid="T0001">Table 1</xref>).</p>
<fig id="F0001">
<label>FIGURE 1</label>
<caption><p>Percentage distribution of respondents by districts.</p></caption>
<graphic xmlns:xlink="http://www.w3.org/1999/xlink" xlink:href="SAJEMS-29-6691-g001.tif"/>
</fig>
<table-wrap id="T0001">
<label>TABLE 1</label>
<caption><p>Demographic results.</p></caption>
<table frame="hsides" rules="groups">
<thead>
<tr>
<th valign="top" align="left">Variable</th>
<th valign="top" align="left">Levels</th>
<th valign="top" align="center"><italic>df</italic></th>
<th valign="top" align="center"><italic>f</italic></th>
<th valign="top" align="center">Valid &#x0025;</th>
</tr>
</thead>
<tbody>
<tr>
<td valign="top" align="left" rowspan="2">Gender</td>
<td align="left">Male</td>
<td align="center">1</td>
<td align="center">229</td>
<td align="center">58.7</td>
</tr>
<tr>
<td align="left">Female</td>
<td align="center">-</td>
<td align="center">161</td>
<td align="center">41.3</td>
</tr>
<tr>
<td valign="top" align="left" rowspan="8">Industry category</td>
<td align="left">Manufacturing</td>
<td align="center">7</td>
<td align="center">33</td>
<td align="center">8.5</td>
</tr>
<tr>
<td align="left">Wholesaling</td>
<td align="center">-</td>
<td align="center">29</td>
<td align="center">7.4</td>
</tr>
<tr>
<td align="left">Retail</td>
<td align="center">-</td>
<td align="center">61</td>
<td align="center">15.6</td>
</tr>
<tr>
<td align="left">Service</td>
<td align="center">-</td>
<td align="center">81</td>
<td align="center">20.8</td>
</tr>
<tr>
<td align="left">Agriculture</td>
<td align="center">-</td>
<td align="center">69</td>
<td align="center">17.7</td>
</tr>
<tr>
<td align="left">Construction</td>
<td align="center">-</td>
<td align="center">45</td>
<td align="center">11.5</td>
</tr>
<tr>
<td align="left">Hospitality</td>
<td align="center">-</td>
<td align="center">46</td>
<td align="center">11.8</td>
</tr>
<tr>
<td align="left">Other</td>
<td align="center">-</td>
<td align="center">26</td>
<td align="center">6.7</td>
</tr>
<tr>
<td valign="top" align="left" rowspan="5">Age of business (years)</td>
<td align="left">1&#x2013;5</td>
<td align="center">4</td>
<td align="center">62</td>
<td align="center">15.9</td>
</tr>
<tr>
<td align="left">6&#x2013;10</td>
<td align="center">-</td>
<td align="center">76</td>
<td align="center">19.5</td>
</tr>
<tr>
<td align="left">11&#x2013;15</td>
<td align="center">-</td>
<td align="center">103</td>
<td align="center">26.4</td>
</tr>
<tr>
<td align="left">16&#x2013;20</td>
<td align="center">-</td>
<td align="center">88</td>
<td align="center">22.6</td>
</tr>
<tr>
<td align="left">More than 20</td>
<td align="center">-</td>
<td align="center">61</td>
<td align="center">15.6</td>
</tr>
<tr>
<td valign="top" align="left" rowspan="5">Capital size</td>
<td align="left">Less than R20 000</td>
<td align="center">4</td>
<td align="center">61</td>
<td align="center">15.6</td>
</tr>
<tr>
<td align="left">R21 000 &#x2013; R100 000</td>
<td align="center">-</td>
<td align="center">78</td>
<td align="center">20.0</td>
</tr>
<tr>
<td align="left">R101 000 &#x2013; R150 000</td>
<td align="center">-</td>
<td align="center">89</td>
<td align="center">22.8</td>
</tr>
<tr>
<td align="left">R151 000 &#x2013; R200 000</td>
<td align="center">-</td>
<td align="center">79</td>
<td align="center">20.3</td>
</tr>
<tr>
<td align="left">More than R201 000</td>
<td align="center">-</td>
<td align="center">83</td>
<td align="center">21.3</td>
</tr>
<tr>
<td valign="top" align="left" rowspan="5">Annual turnover</td>
<td align="left">Less than R20 000</td>
<td align="center">4</td>
<td align="center">14</td>
<td align="center">3.6</td>
</tr>
<tr>
<td align="left">R21 000 &#x2013; R100 000</td>
<td align="center">-</td>
<td align="center">57</td>
<td align="center">14.6</td>
</tr>
<tr>
<td align="left">R101 000 &#x2013; R150 000</td>
<td align="center">-</td>
<td align="center">80</td>
<td align="center">20.5</td>
</tr>
<tr>
<td align="left">R151 000 &#x2013; R200 000</td>
<td align="center">-</td>
<td align="center">99</td>
<td align="center">25.4</td>
</tr>
<tr>
<td align="left">More than R201 000</td>
<td align="center">-</td>
<td align="center">140</td>
<td align="center">35.9</td>
</tr>
<tr>
<td valign="top" align="left" rowspan="5">Number of employees</td>
<td align="left">1&#x2013;10</td>
<td align="center">4</td>
<td align="center">72</td>
<td align="center">18.5</td>
</tr>
<tr>
<td align="left">11&#x2013;20</td>
<td align="center">-</td>
<td align="center">98</td>
<td align="center">25.1</td>
</tr>
<tr>
<td align="left">21&#x2013;30</td>
<td align="center">-</td>
<td align="center">110</td>
<td align="center">28.2</td>
</tr>
<tr>
<td align="left">31&#x2013;40</td>
<td align="center">-</td>
<td align="center">75</td>
<td align="center">19.2</td>
</tr>
<tr>
<td align="left">More than 40</td>
<td align="center">-</td>
<td align="center">35</td>
<td align="center">-</td>
</tr>
</tbody>
</table>
<table-wrap-foot>
<fn><p>Note: Demographic profile of data generated by the author based on results.</p></fn>
</table-wrap-foot>
</table-wrap>
<p>Twenty-eight respondents (7.2&#x0025;) were in the Amathole district, 49 (12.6&#x0025;) in the Chris Hani district, and 35 in the Sarah Baartman district.</p>
</sec>
<sec id="s20011">
<title>Dependent variable: Small and medium enterprises&#x2019; business performance</title>
<p>The study employed the SMEs&#x2019; BP (<italic>15 items</italic>; &#x03B1; = 0.898 (see <xref ref-type="table" rid="T0002">Table 2</xref>), measuring opinions embedded in the reviewed empirical literature. The adapted instrument for SMEs&#x2019; BP was based on scales developed by Napwanya (<xref ref-type="bibr" rid="CIT0032">2019</xref>). Thus, the investigation of SMEs&#x2019; BP was used to measure performance in the article. Of these, 15 items were considered to analyse SMEs&#x2019; BP.</p>
<table-wrap id="T0002">
<label>TABLE 2</label>
<caption><p>Measurement model specification.</p></caption>
<table frame="hsides" rules="groups">
<thead>
<tr>
<th valign="top" align="left" rowspan="2">Construct and items</th>
<th valign="top" align="center" rowspan="2">Loadings range</th>
<th valign="top" align="center" colspan="5">Model fit<hr/></th>
</tr>
<tr>
<th valign="top" align="center">CA</th>
<th valign="top" align="center">CFI</th>
<th valign="top" align="center">RMSEA</th>
<th valign="top" align="center">SRMR</th>
<th valign="top" align="center">KMO Tests</th>
</tr>
</thead>
<tbody>
<tr>
<td align="left"><bold>Digital ambidexterity</bold> (Partanen et al. <xref ref-type="bibr" rid="CIT0035">2019</xref>) (<italic>9 items</italic>)</td>
<td align="center"><bold>0.507&#x2013;0.648</bold></td>
<td align="center">0.810</td>
<td align="center">0.929</td>
<td align="center">0.073</td>
<td align="center">0.045</td>
<td align="center">0.850</td>
</tr>
<tr>
<td align="left"><bold>SMEs&#x2019; business performance</bold> (Napwanya <xref ref-type="bibr" rid="CIT0032">2019</xref>) (<italic>15 items</italic>)</td>
<td align="center"><bold>0.576&#x2013;0.701</bold></td>
<td align="center">0.898</td>
<td align="center"><bold>0.955</bold></td>
<td align="center"><bold>0.050</bold></td>
<td align="center"><bold>0.039</bold></td>
<td align="center">0.936</td>
</tr>
<tr>
<td align="left"><bold>Network capability</bold> (Walter et al. <xref ref-type="bibr" rid="CIT0053">2006</xref>; <italic>17 items)</italic></td>
<td align="center"><bold>0.552&#x2013;0.708</bold></td>
<td align="center">0.921</td>
<td align="center">0.968</td>
<td align="center"><bold>0.044</bold></td>
<td align="center"><bold>0.034</bold></td>
<td align="center">0.952</td>
</tr>
</tbody>
</table>
<table-wrap-foot>
<fn><p>Note: Model specification created by the author based on the results. The bold values indicate that the measurement model met acceptable statistical thresholds: factor loadings were above the minimum accepted value of 0.50, Cronbach&#x2019;s alpha exceeded the minimum reliability threshold of 0.70 and remained below the maximum recommended value of 0.95, CFI exceeded the minimum acceptable value of 0.90, RMSEA and SRMR were below the maximum acceptable value of 0.08, and KMO exceeded the minimum acceptable value of 0.60, confirming acceptable reliability, model fit, and sampling adequacy. Please see the full reference list of the article, Chigori, D.T., Chinyamurindi, W.T. &#x0026; Rungani, E.C., 2026, &#x2018;Role of network capability in the relationship between digital ambidexterity and small and medium enterprises&#x2019; business performance in an emerging economy&#x2019;, South African Journal of Economic and Management Sciences 29(1), a6691. <ext-link ext-link-type="uri" xlink:href="https://doi.org/10.4102/sajems.v29i1.6691">https://doi.org/10.4102/sajems.v29i1.6691</ext-link>, for more information.</p></fn>
<fn><p>CA, Cronbach&#x2019;s alpha; CFI, comparative fit index; RMSEA, root mean square error of approximation; SRMR, standardised root mean square residual; KMO, Kaiser&#x2013;Meyer&#x2013;Olkin; SMEs, small and medium enterprises.</p></fn>
</table-wrap-foot>
</table-wrap>
</sec>
<sec id="s20012">
<title>Mediator variable: Network capability</title>
<p>The intervening variable, NC (&#x03B1; = 0.921) (interpersonal competence, knowledge of one&#x2019;s partner, ability to work in tandem, and clarity of thought) applied in the article was adopted from various empirical studies (Walter et al. <xref ref-type="bibr" rid="CIT0053">2006</xref>). The 15-item construct of NC (see <xref ref-type="table" rid="T0002">Table 2</xref>) was employed in the study to survey how SMEs manage relationships, create harmony with other firms, and manage their firms&#x2019; social interactions and the knowledge they have of other firms&#x2019; operations. The confirmatory factor analysis (CFA) showed that NC loads on a single factor with moderately high factor loadings ranging from 0.552 to 0.708.</p>
</sec>
<sec id="s20013">
<title>Predictor variable: Digital ambidexterity</title>
<p>To measure DA, empirical analysis of literature, including Partanen et al. (<xref ref-type="bibr" rid="CIT0035">2019</xref>), Posch and Garaus (<xref ref-type="bibr" rid="CIT0036">2019</xref>), and Ortiz de Guinea and Raymond (<xref ref-type="bibr" rid="CIT0033">2020</xref>), as well as Zhang et al. (<xref ref-type="bibr" rid="CIT0063">2016</xref>), was reviewed, leading to the adoption of Partanen et al. (<xref ref-type="bibr" rid="CIT0035">2019</xref>)&#x2019;s ambidexterity concept. The CFA showed that DA loads on a single factor with moderately high factor loadings ranging from 0.507 to 0.648. The internal consistency of DA (9 <italic>items, &#x03B1;</italic> = 0.810) showed a good overall scale coefficient (see <xref ref-type="table" rid="T0002">Table 2</xref>).</p>
</sec>
<sec id="s20014">
<title>Ethical considerations</title>
<p>Ethical clearance to conduct this study was obtained from the University of Fort Hare&#x2019;s Research Ethics Committee (No. CHI051SCHI01).</p>
</sec>
</sec>
<sec id="s0015">
<title>Results</title>
<p>Initial correlation analysis indicated a moderately significant positive correlation between DA, NC, and BP. The variables are significant and free from multicollinearity. Kim (<xref ref-type="bibr" rid="CIT0022">2019</xref>) explains that multicollinearity becomes problematic when the variance inflation factor (VIF) exceeds 5&#x2013;10.</p>
<p>Adhering to this prerequisite, all variables&#x2019; VIF ranged from 2.121 to 3.445. The VIF values remained within acceptable limits, indicating that the variables are moderately correlated. These results align with Kim (<xref ref-type="bibr" rid="CIT0022">2019</xref>).</p>
<sec id="s20016">
<title>Mediation analyses</title>
<p>The findings from the Hayes PROCESS macro mediation analysis are presented in <xref ref-type="table" rid="T0003">Table 3</xref> and <xref ref-type="fig" rid="F0001">Figure 1</xref>. Results indicated that DA had a significant positive direct effect on the mediator variable, NC (&#x03B2; = 0.8199, <italic>t</italic> = 22.1388, <italic>p</italic> &#x2264; 0.0001). In addition, NC had a significant positive direct effect on SMEs&#x2019; BP (&#x03B2; = 0.4936, <italic>t</italic> = 8.7146, <italic>p</italic> &#x2264; 0.0001). These results support the mediational hypothesis.</p>
<table-wrap id="T0003">
<label>TABLE 3</label>
<caption><p>Mediation analysis of network capability.</p></caption>
<table frame="hsides" rules="groups">
<thead>
<tr>
<th valign="top" align="left" rowspan="2">Effects</th>
<th valign="top" align="center" colspan="2">Unstandardised beta coefficients<hr/></th>
<th valign="top" align="center" colspan="2">Significance of beta coefficients<hr/></th>
<th valign="top" align="center" colspan="2">95&#x0025; confidence interval<hr/></th>
</tr>
<tr>
<th valign="top" align="center">&#x03B2;</th>
<th valign="top" align="center">SE</th>
<th valign="top" align="center"><italic>t</italic></th>
<th valign="top" align="center"><italic>p</italic>-value</th>
<th valign="top" align="center">LLCI</th>
<th valign="top" align="center">ULCI</th>
</tr>
</thead>
<tbody>
<tr>
<td align="left" colspan="7">Direct effect(s)</td>
</tr>
<tr>
<td align="left"><italic>1. DA (X) &#x2192;</italic></td>
<td align="center">0.8199<xref ref-type="table-fn" rid="TFN0001">&#x002A;</xref></td>
<td align="center">0.0370</td>
<td align="center">22.1388</td>
<td align="center">&#x003C; 0.0001</td>
<td align="center">0.7471</td>
<td align="center">0.8927</td>
</tr>
<tr>
<td align="left"><italic>2. NC (M) &#x2192;</italic></td>
<td align="center">0.4936<xref ref-type="table-fn" rid="TFN0001">&#x002A;</xref></td>
<td align="center">0.0566</td>
<td align="center">8.7146</td>
<td align="center">&#x003C; 0.0001</td>
<td align="center">0.3822</td>
<td align="center">0.6049</td>
</tr>
<tr>
<td align="left"><italic>3. DA (X) &#x2192;</italic></td>
<td align="center">0.2418<xref ref-type="table-fn" rid="TFN0001">&#x002A;</xref></td>
<td align="center">0.0622</td>
<td align="center">3.8907</td>
<td align="center">0.0001</td>
<td align="center">0.1196</td>
<td align="center">0.3640</td>
</tr>
<tr>
<td align="left">Indirect effect(s) of X on Y</td>
<td align="center">0.4047<xref ref-type="table-fn" rid="TFN0001">&#x002A;</xref></td>
<td align="center">0.0605</td>
<td align="center">-</td>
<td align="center">-</td>
<td align="center">0.2913</td>
<td align="center">0.5277</td>
</tr>
<tr>
<td align="left">Total effect(s) of X on Y</td>
<td align="center">0.6465<xref ref-type="table-fn" rid="TFN0001">&#x002A;</xref></td>
<td align="center">0.0451</td>
<td align="center">14.3253</td>
<td align="center">&#x003C; 0.0001</td>
<td align="center">0.5578</td>
<td align="center">0.7352</td>
</tr>
</tbody>
</table>
<table-wrap-foot>
<fn><p>Note:</p></fn>
<fn id="TFN0001"><label>&#x002A;</label><p>Significant effect at alpha = 0.05. Number of bootstrap samples for percentile bootstrap confidence intervals: 20 000.</p></fn>
<fn><p>X, predictor or independent variable; DA, digital ambidexterity; Y, outcome or dependent variable; BP, business performance; M, mediator variable; NC, network capability; SE, standard error; LLCI, lower limit confidence interval; ULCI, upper limit confidence interval.</p></fn>
</table-wrap-foot>
</table-wrap>
<p>With the mediator variable (NC) being controlled, the mediation analysis results indicated that DA was a significant predictor of SMEs&#x2019; BP (&#x03B2; = 0.2418, <italic>t</italic> = 3.8907, <italic>p</italic> = 0.0001). Since the direct effect of DA on SMEs&#x2019; BP is significant, this result is consistent with partial mediation. Furthermore, the total effect of DA on SMEs&#x2019; BP is also statistically significant (&#x03B2; = 0.6465, <italic>t</italic> = 14.3253, <italic>p</italic> &#x2264; 0.0001). To establish the mediating effect of NC, the indirect effect was tested using a percentile bootstrap estimation approach with 20 000 samples. The results indicated that the indirect effect was statistically significant (&#x03B2; = 0.4047, 95&#x0025; confidence interval (CI) [0.2913, 0.5277]). These findings are consistent with partial mediation. Higher levels of DA were associated with SMEs&#x2019; BP scores, which were approximately 0.4047 points higher, as mediated by NC. Since the indirect effect is statistically significant, there is sufficient evidence at a 5&#x0025; level of significance to reject the null hypothesis and conclude that NC significantly mediates the relationship between DA and SMEs&#x2019; BP (&#x03B2; = 0.4047, 95&#x0025; CI [0.2913, 0.5277]). A conceptual model was thus proposed based on the analysis (<xref ref-type="fig" rid="F0002">Figure 2</xref>).</p>
<fig id="F0002">
<label>FIGURE 2</label>
<caption><p>Conceptual model based on regression beta path coefficients.</p></caption>
<graphic xmlns:xlink="http://www.w3.org/1999/xlink" xlink:href="SAJEMS-29-6691-g002.tif"/>
</fig>
<p>The provided statistical analysis details the impact of DA on SMEs&#x2019; BP, mediated by NC. The direct effect of DA on NC (&#x03B2; = 0.8199, <italic>p</italic> &#x003C; 0.0001) is significant and positive, indicating that SMEs embracing DA tend to develop superior NCs. This can be attributed to digitally savvy businesses being more adept at using online platforms and tools for networking, collaboration, and market exploration, thereby enhancing their NC.</p>
<p>The conceptual model also shows a direct effect of NC on BP (&#x03B2; = 0.4936, <italic>p</italic> &#x003C; 0.0001). This reflects the SME&#x2019;s ability to develop, maintain, and leverage business relationships and networks. The positive relationship between NC and BP signifies that robust NCs, such as strategic partnerships and collaborations, are critical for BP in SMEs. This may be because effective networks provide access to resources, information, and markets that can significantly enhance competitive advantages and operational efficiencies. The direct positive effect of DA on BP (&#x03B2; = 0.2418, <italic>p</italic> = 0.0001) suggests that DA directly contributes to improving BP. This is likely because digital tools and strategies enable SMEs to optimise operations, reach broader markets, and innovate in product and service delivery.</p>
<p>The significant indirect effect of DA on BP through NC (&#x03B2; = 0.4047) indicates that NC mediates a considerable part of the impact of DA on BP. This suggests that while DA is crucial, its full potential to enhance BP is realised when combined with strong NC. The total effect of DA on BP (&#x03B2; = 0.6465, <italic>p</italic> &#x003C; 0.0001) combines the direct and indirect impacts, showcasing the substantial overall influence of DA on BP.</p>
<p>This underscores the multifaceted benefits of digital initiatives in SMEs.</p>
</sec>
</sec>
<sec id="s0017">
<title>Discussion</title>
<sec id="s20018">
<title>Digital ambidexterity and business performance</title>
<p>Digital ambidexterity emerges from our structural model as a statistically significant, direct antecedent of SME BP, even after controlling for firm size, age, and industry (Jansen et al. 2009). While prior scholarship questions whether resource-constrained firms can sustain ambidexterity (Wenke, Zapkau &#x0026; Schwens <xref ref-type="bibr" rid="CIT0056">2021</xref>), the present results show a net performance benefit, thereby challenging recommendations that small firms should specialise in either exploration or exploitation (Venugopal et al. <xref ref-type="bibr" rid="CIT0050">2020</xref>). Nevertheless, the effect size is modest, confirming earlier evidence that limited slack can render ambidexterity costly relative to single-mode digital strategies (Rustenburg 2017). Hence, SMEs must complement DA with additional capability levers to fully offset resource demands.</p>
<p>The current findings identify NC as the firm&#x2019;s ability to build and leverage dense, trust-based ties with customers, suppliers, and digital platform partners as a precise lever. DA positively influences NC, and NC in turn exhibits a substantial, direct contribution to BP, thereby producing a partial mediation of the DA and BP relationship (Farida &#x0026; Nuryakin <xref ref-type="bibr" rid="CIT0011">2021</xref>; Majid et al. <xref ref-type="bibr" rid="CIT0027">2020</xref>; Partanen et al. <xref ref-type="bibr" rid="CIT0035">2019</xref>). Expanding the dynamic capability view, NC turns ambidextrous learning into marketable possibilities by accelerating information flows, joint technology development, and building goodwill, as noted by Teece (<xref ref-type="bibr" rid="CIT0045">2007</xref>) and by extending Granovetter&#x2019;s (<xref ref-type="bibr" rid="CIT0015">1973</xref>) strong-tie logic into digital-ecosystem contexts. In practical terms, NC affords under-resourced SMEs privileged access to external knowledge, reputation signals, and complementary assets (Tsai <xref ref-type="bibr" rid="CIT0048">2016</xref>; Walter et al. <xref ref-type="bibr" rid="CIT0053">2006</xref>), thereby magnifying the payoffs of DA while containing its costs.</p>
<p>Bricolage is a further contingency that underpins this virtuous cycle: the improvisational recombination of readily available resources under constraint (L&#x00E9;vi-Strauss 1966). Empirically, SMEs that practise bricolage repurpose digital tools, partner knowledge, and platform affordances to protect intellectual assets informally, thus lowering the marginal cost of ambidextrous initiatives and amplifying NC&#x2019;s mediating effect (Cenamor et al. <xref ref-type="bibr" rid="CIT0003">2019</xref>; Faroque et al. <xref ref-type="bibr" rid="CIT0012">2022</xref>). These findings position NC as the critical social mechanism linking DA to performance, demonstrate bricolage as an adaptive capability buffering resource scarcity, and integrate both into a context-sensitive ambidexterity framework for SMEs. Managers are therefore advised to cultivate relationship-building routines, such as joint digital hackathons and co-creation agreements, while preserving organisational slack for bricolage-driven experimentation, thereby realising the full strategic value of DA.</p>
</sec>
<sec id="s20019">
<title>Managerial and policy implications, limitations, and future research</title>
<p>The study advances the literature by empirically demonstrating that DA contributes to SMEs&#x2019; performance through the mediating role of NC. The findings align with and extend social ties theory, which posits that networks facilitate access to resources and coordination. The study&#x2019;s findings also show that DA strengthens social capital by enabling SMEs to leverage existing and emerging digital processes and opportunities. The study also integrates digital transformation with strategic management.</p>
<p>These findings also have implications for the theory of social bonds (Partanen et al. <xref ref-type="bibr" rid="CIT0035">2019</xref>). Small and medium enterprises in emerging economies, without a proper understanding of network information and network decisions, may make premature, incomplete, ambiguous, and often misleading decisions (Field &#x0026; Scott <xref ref-type="bibr" rid="CIT0013">1981</xref>; Marineau <xref ref-type="bibr" rid="CIT0028">2007</xref>). This suggests that distant and arms-length relationships described by the theory reinforce how loosely connected ties arise from loosely focused social interactions through NC, especially in developing nations&#x2019; economies.</p>
<p>Managers facing distant and arm&#x2019;s-length relationships should not quickly share strategic information without considering partners&#x2019; actual attitudes and motivations in terms of cooperation. As such, SMEs in emerging economies must be cautious about excessive optimism, while large partners show only partial openness. Consequently, SME managers should initiate the development of their internal network&#x2019;s capabilities (Mainardes et al. 2017). This helps SMEs establish strong, reliable, and trustworthy partnerships. They initiate strategic information-sharing partnerships only after managers have proven the relationship mutually beneficial and reliable. Such partnerships may assist SMEs in recognising additional benefits from DA.</p>
<p>It has been acknowledged that SMEs face resource constraints that lead to considerable exploitation, yet typically retain extensive exploration knowledge (Partanen et al. <xref ref-type="bibr" rid="CIT0035">2019</xref>). Thus far, SMEs may be unwilling to disclose their novel ideas to their stakeholders (partners). Novel ideas are often key competitive advantages that enable SMEs to maintain their market position. Hence, building mutually beneficial partnerships to pursue DA with competition partners may be illegitimate. This is often considered collusion, leading to price-fixing and other illegal, unsanctioned activities. Hence, another avenue for future research is to investigate the role of DA and networking capabilities in the collusion of horizontally competing partners.</p>
<p>While the current study focused on SMEs, examining ambidexterity in banks, insurance companies, and other financial institutions could be groundbreaking. A holistic perspective in SMEs can be achieved on DA by looking at these avenues.</p>
</sec>
<sec id="s20020">
<title>Policy implications for small and medium enterprises</title>
<sec id="s30021">
<title>Support for digital initiatives</title>
<p>Policymakers should create and promote initiatives that encourage SMEs to adopt digital technologies. These policies must emphasise technological adoption and the strategic exploration of new digital opportunities.</p>
<p>This can include providing financial incentives, training programmes, and resources to help SMEs navigate the digital landscape (Liang, Du &#x0026; Chen <xref ref-type="bibr" rid="CIT0025">2023</xref>; Telukdarie et al. <xref ref-type="bibr" rid="CIT0047">2023</xref>). Policymakers should collaborate with industry experts to ensure these initiatives are tailored to SMEs&#x2019; needs and challenges in different sectors. Creating a supportive environment for digital initiatives can help SMEs succeed in a rapidly changing digital economy (J&#x00F6;hnk et al. <xref ref-type="bibr" rid="CIT0019">2022</xref>). Policymakers should stay informed about emerging technologies and trends to effectively guide SMEs towards sustainable growth and competitiveness. Collaboration with industry experts and policymakers can ensure that SMEs have the tools and knowledge needed to leverage digital technologies to their fullest potential, driving innovation and increasing productivity in the sector.</p>
<p>Policymakers also need to design tailored digitisation policies that go beyond general support and are specific to the DA needs of SMEs. This includes providing the following:</p>
<list list-type="bullet">
<list-item><p>Sector-specific funding to explore digital technologies</p></list-item>
<list-item><p>Subsidised access to digital infrastructure such as cloud platforms, development of digital platforms, and cybersecurity services</p></list-item>
<list-item><p>Strategic mentoring programmes aligned with digital exploration and exploitation goals.</p></list-item>
</list>
<p>These policies must reflect the dual challenge of maintaining operational excellence while addressing innovation, a core tension in DA.</p>
</sec>
<sec id="s30022">
<title>Networking and collaboration incentives</title>
<p>Policies should incentivise networking and collaboration among SMEs and between SMEs and larger firms. This could include tax breaks, subsidies, or grants for collaborative projects and network-building activities. Additionally, policymakers should consider creating platforms or events that facilitate networking opportunities for SMEs to connect with potential partners and share best practices (De Falco et al. <xref ref-type="bibr" rid="CIT0008">2017</xref>).</p>
<p>Encouraging collaboration can help SMEs gain access to collective knowledge and resources, thereby boosting their competitiveness in the market (Audretsch et al. <xref ref-type="bibr" rid="CIT0001">2023</xref>; Chigori, Chinyamurindi &#x0026; Rungani <xref ref-type="bibr" rid="CIT0005">2024</xref>). Such initiatives can assist SMEs in entering new markets, utilising each other&#x2019;s expertise, and enhancing their prospects for success (Cenamor et al. <xref ref-type="bibr" rid="CIT0003">2019</xref>; Costa et al. <xref ref-type="bibr" rid="CIT0007">2020</xref>). By encouraging networking and collaboration, policymakers can create a more vibrant and innovative ecosystem in which SMEs can thrive through partnerships and knowledge sharing, leading to greater resilience and sustainability. The government may adopt the following initiatives.</p>
<list list-type="bullet">
<list-item><p>Tax incentives for inter-firm digital projects</p></list-item>
<list-item><p>Public-private partnerships to develop digital ecosystems</p></list-item>
<list-item><p>Online and offline SMEs networking platforms for sharing digital best practices</p></list-item>
</list>
<p>These recommendations are grounded in our findings that NC significantly enhances business performance when driven by DA (De Falco et al. <xref ref-type="bibr" rid="CIT0008">2017</xref>).</p>
</sec>
<sec id="s30023">
<title>Digital education and training programmes</title>
<p>Educational programmes and workshops should be implemented to enhance digital skills among SME owners and employees, focusing on exploiting existing technologies and exploring new digital trends (Witschel et al. <xref ref-type="bibr" rid="CIT0057">2019</xref>). These programmes can help SMEs adapt to the rapidly changing digital landscape, stay competitive in the market, and improve overall efficiency in their operations (You et al. <xref ref-type="bibr" rid="CIT0059">2013</xref>). By investing in digital education and training, policymakers can empower SMEs to harness the full potential of technology for growth and success. In addition, these programmes can also help SMEs learn new knowledge to reduce costs, increase productivity, and reach new markets (Kitap&#x00E7;i &#x0026; &#x00C7;elik <xref ref-type="bibr" rid="CIT0023">2013</xref>; Yang et al. <xref ref-type="bibr" rid="CIT0058">2014</xref>). Policymakers can ensure these businesses thrive in the digital economy by equipping SMEs with the necessary digital skills. Investing in digital education and training programmes is vital for building a robust SME sector that supports economic growth and development. Thus, the government must implement the following:</p>
<list list-type="bullet">
<list-item><p>Ongoing digital skills development programmes tailored to SMEs</p></list-item>
<list-item><p>Train the trainer models for cost-effective dissemination of digital know-how</p></list-item>
<list-item><p>Accredited micro-credential systems to certify SME digital competencies.</p></list-item>
</list>
</sec>
</sec>
<sec id="s20024">
<title>Managerial implications</title>
<sec id="s30025">
<title>Investment in digital technologies</title>
<p>Small and medium enterprise managers should consider allocating resources to adopt and integrate digital technologies into their business processes and offerings, balancing between digital exploitation with exploration of current technologies and innovative digital solutions. This will enhance efficiency and productivity, helping SMEs remain competitive in the rapidly evolving market (Telukdarie et al. <xref ref-type="bibr" rid="CIT0047">2023</xref>). Additionally, managers should prioritise their workforce&#x2019;s continuous learning and upskilling to ensure they have the knowledge and expertise to effectively leverage digital tools in training programmes and workshops, helping employees stay up to date with the latest digital trends and best practices (Jing et al. <xref ref-type="bibr" rid="CIT0018">2023</xref>). Ultimately, embracing digital transformation and investing in employee development will help SMEs grow and thrive in a digital world.</p>
</sec>
<sec id="s30026">
<title>Building and leveraging networks</title>
<p>Managers should seek to build and maintain strong networks, leveraging these for resources, information sharing, and market access (Choi et al. <xref ref-type="bibr" rid="CIT0006">2021</xref>). This could involve participating in industry associations, networking events, and establishing partnerships. By building and leveraging networks, managers can stay informed about industry trends, collaborate with other businesses, and gain access to new opportunities. These connections can also provide valuable support and guidance during uncertainty or change (Chigori et al. <xref ref-type="bibr" rid="CIT0005">2024</xref>; Joyce <xref ref-type="bibr" rid="CIT0020">1995</xref>). Building solid relationships with other professionals allows managers to access valuable knowledge and expertise, driving innovation and growth (Vrontis et al. <xref ref-type="bibr" rid="CIT0052">2017</xref>). Furthermore, these networks can open doors to new partnerships and collaborations that can lead to mutual success (Joyce <xref ref-type="bibr" rid="CIT0020">1995</xref>; Sawers, Pretorius &#x0026; Oerlemans <xref ref-type="bibr" rid="CIT0039">2008</xref>). In essence, effectively building and leveraging networks is a crucial skill for managers looking to navigate the complexities of the digital age and thrive in today&#x2019;s interconnected global economy.</p>
</sec>
<sec id="s30027">
<title>Fostering a culture for continuous learning and adaptation</title>
<p>Small and medium enterprises should foster a culture of continuous learning and adaptation to remain digitally ambidextrous (Kyrdod et al. <xref ref-type="bibr" rid="CIT0024">2023</xref>). The right culture enables SMEs to effectively respond to changing market demands and technological advancements. Encouraging employees to upskill and stay informed about industry trends continuously helps SMEs stay at the forefront of innovation. Taking this proactive approach will maintain competitiveness and enable the seizure of new opportunities as they emerge (Joyce <xref ref-type="bibr" rid="CIT0020">1995</xref>). Additionally, SMEs should invest in training programmes and resources to support their employees&#x2019; professional development.</p>
<p>Businesses empower their workforce by providing access to online courses, workshops, and seminars for acquiring new skills and knowledge. Continuous learning benefits individual employees and contributes to the company&#x2019;s overall growth and success. Ultimately, by embracing a culture of continuous learning and adaptation, SMEs can establish themselves as agile and resilient players in the digital economy.</p>
</sec>
<sec id="s30028">
<title>Enhanced operational efficiency</title>
<p>Using digital technologies, SMEs can streamline operations, cut costs, and boost productivity, enhancing overall performance. These benefits ultimately increase value creation for the business by enabling it to deliver products and services more efficiently and effectively to its customers. Additionally, by staying ahead of digital trends and adapting quickly, SMEs can gain a competitive edge in the market and attract new growth opportunities. Furthermore, digital technologies allow SMEs to better understand their customers and tailor their products and services to meet their needs. This targeted approach boosts customer satisfaction and results in higher customer retention rates, further increasing the value the business creates. Overall, embracing technological advancements can greatly benefit SMEs in terms of operational efficiency, competitiveness, and value creation. By investing in digital transformation, SMEs can position themselves for long-term success in an increasingly digital world.</p>
</sec>
<sec id="s30029">
<title>Market expansion and customer engagement</title>
<p>Digital tools enable SMEs to reach broader markets and engage with customers more effectively, increasing sales and customer satisfaction (Cenamor et al. <xref ref-type="bibr" rid="CIT0003">2019</xref>). Additionally, digital tools can provide valuable insights into customer behaviour and preferences, allowing SMEs to tailor their products and services accordingly.</p>
<p>This personalised approach can help businesses build stronger relationships with customers and stay ahead of competitors in the market (Mustafa et al. <xref ref-type="bibr" rid="CIT0031">2022</xref>). Leveraging digital tools for market expansion and customer engagement, SMEs can increase revenue and build a loyal customer base through enhanced relationship-building. Analysing customer behaviour and preferences using data can assist SMEs in customising products and services, increasing customer satisfaction and retention rates.</p>
</sec>
<sec id="s30030">
<title>Innovation and competitive advantage</title>
<p>Digital ambidexterity fosters an innovation environment, allowing SMEs to develop unique products and services and establish a competitive edge in the market (Chigori et al. <xref ref-type="bibr" rid="CIT0005">2024</xref>). Small and medium enterprises can effectively balance their focus on current operations and future opportunities, enabling them to stay ahead of the curve in a rapidly evolving digital landscape (Costa et al. <xref ref-type="bibr" rid="CIT0007">2020</xref>). Adaptability and agility are crucial for SMEs to respond to market changes and technological advancements, maintaining a competitive edge in the modern business environment.</p>
<p>Furthermore, DA enables SMEs to adapt quickly to changing market conditions and customer preferences, ensuring they remain relevant and in demand. This ability to pivot and innovate in real time gives SMEs a significant advantage over larger, more extensive, bureaucratic competitors.</p>
</sec>
<sec id="s30031">
<title>Resource and information access</title>
<p>Strong NC provides SMEs access to critical resources and information, enhancing decision-making and strategic planning. Additionally, by leveraging digital tools and platforms (De Falco et al. <xref ref-type="bibr" rid="CIT0008">2017</xref>), SMEs can gather valuable data and insights to better understand their target market and tailor their offerings accordingly. This proactive approach can increase customer satisfaction and loyalty, ultimately driving business growth and success. Moreover, digital tools allow SMEs to streamline their operations and improve efficiency, leading to cost savings and increased profitability (Costa et al. <xref ref-type="bibr" rid="CIT0007">2020</xref>). By embracing technology, SMEs can stay ahead of the competition and adapt quickly to changing market trends. In today&#x2019;s fast-paced business environment, staying innovative and agile is crucial for SMEs to remain competitive.</p>
</sec>
</sec>
</sec>
<sec id="s0032">
<title>Conclusion</title>
<p>In conclusion, DA significantly impacts SMEs&#x2019; BP through direct and indirect pathways, with NC playing a crucial mediating role. Understanding these relationships enables SMEs to strategically use digital technologies and networks to improve BP and create value. Policymakers and managers should consider these insights to support and guide SMEs in the digital era. By fostering a culture of innovation and adaptability, SMEs can better position themselves to capitalise on DA. Embracing technology and building strong relationships with network partners can lead to sustainable growth and a competitive advantage in today&#x2019;s rapidly evolving business landscape. Overall, SMEs need to recognise the importance of digital transformation and actively seek ways to integrate it into their business strategies. Small and medium enterprises can succeed in the digital world and maintain a competitive edge by remaining flexible and receptive to new possibilities.</p>
<p>However, more than simply adopting new technologies, forming partnerships is needed to guarantee success. Companies must balance internal and external sources of innovation to ensure long-term success.</p>
<p>Though several suggestions have been made, the study is not without limitations. For instance, the study may not have considered all factors influencing a company&#x2019;s ability to effectively balance internal and external innovation. The recommendations must be tailored to fit each organisation&#x2019;s needs and capabilities. Therefore, further research may be necessary to fully understand the complexities of balancing digital exploitation and exploration in innovation. Companies should also regularly reassess their innovation strategies to adapt to changing market conditions and technological advancements.</p>
</sec>
</body>
<back>
<ack>
<title>Acknowledgements</title>
<p>This article includes content that overlaps with research originally conducted as part of Darlington T. Chigori&#x2019;s doctoral thesis titled &#x2018;Digital ambidexterity in South African Small and Medium Enterprises (SMEs): The role of network capability and value creation&#x2019;, submitted to the Department of Business Management, University of Fort Hare in 2023. The thesis was supervised by Willie T. Chinyamurindi and Ellen C. Rungani. Portions of the data, analysis, and discussion have been revised, updated, and adapted for publication as a journal article. The original dissertation was not publicly available online at the time of publishing this article.</p>
<p>This article is based on data from a larger study. Another article was published from the same thesis. A related article &#x2018;Dynamic innovation model for ambidextrous SMEs: Insights from a bibliometrics analysis&#x2019; has been published in the South African Journal of Business Management, 55(1), a4282. The present article addresses a distinct research question, focusing on how SMEs leverage capabilities (NCs) to enhance the effectiveness of digital ambidexterity (DA) and improve SME business performance (SME BP).</p>
<sec id="s20033" sec-type="COI-statement">
<title>Competing interest</title>
<p>The authors declare that they have no financial or personal relationships that may have inappropriately influenced them in writing this article.</p>
</sec>
<sec id="s20034">
<title>CRediT authorship contribution</title>
<p>Darlington T. Chigori: Conceptualisation, Formal analysis, Methodology, Project administration, Resources, Writing &#x2013; original draft, Writing &#x2013; review &#x0026; editing. Willie T. Chinyamurindi: Conceptualisation, Resources, Supervision, Writing &#x2013; review &#x0026; editing. Ellen C. Rungani: Conceptualisation, Supervision, Writing &#x2013; review &#x0026; editing. All authors reviewed the article, contributed to the discussion of results, approved the final version for submission and publication, and take responsibility for the integrity of its findings.</p>
</sec>
<sec id="s20035" sec-type="data-availability">
<title>Data availability</title>
<p>The authors declare that all data that support this research article and its findings are available in the article and its references.</p>
</sec>
<sec id="s20036">
<title>Disclaimer</title>
<p>The views and opinions expressed in this article are those of the authors and are the product of professional research. They do not necessarily reflect the official policy or position of any affiliated institution, funder, agency, or that of the publisher. The authors are responsible for this article&#x2019;s results, findings, and content.</p>
</sec>
</ack>
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<fn><p><bold>How to cite this article:</bold> Chigori, D.T., Chinyamurindi, W.T. &#x0026; Rungani, E.C., 2026, &#x2018;Role of network capability in the relationship between digital ambidexterity and small and medium enterprises&#x2019; business performance in an emerging economy&#x2019;, <italic>South African Journal of Economic and Management Sciences</italic> 29(1), a6691. <ext-link ext-link-type="uri" xlink:href="https://doi.org/10.4102/sajems.v29i1.6691">https://doi.org/10.4102/sajems.v29i1.6691</ext-link></p></fn>
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