Institutional-Based Social Network Resources, Social Resource Orchestration Competence, and Business Growth of Manufacturing Small and Medium Enterprises: Evidence from Kenya

Abstract

Introduction: The sustainable growth of small and medium-sized enterprises (SMEs) in manufacturing in developing economies depends significantly on how firms harness institutional social networks as strategic resources. Despite growing scholarship on social capital and firm performance, the mechanisms by which institutionally based social network resources comprising regulatory, normative, and cultural-cognitive networks translate into business growth remain insufficiently theorised. Specifically, the moderating role of social resource orchestration competence (SROC) in converting institutional network resources into firm growth value has not been empirically examined among Kenyan manufacturing SMEs. Methods: A quantitative cross-sectional survey was conducted among 393 purposively selected respondents comprising business owners, heads of operations, and heads of finance drawn from Kenya Association of Manufacturers (KAM) registered manufacturing SMEs across 14 sub-sectors in Nairobi County, Kenya. Structural Equation Modelling (SEM) was conducted in SmartPLS 4.0, preceded by Confirmatory Factor Analysis (CFA) to establish reliability and validity. Convergent and discriminant validity, as well as collinearity, were assessed using established thresholds before path analysis was conducted. Results: Direct path analysis confirmed significant positive associations of regulatory (β = 0.332, p < 0.05), normative (β = 0.285, p < 0.05), and cultural-cognitive resource networks (β = 0.162, p < 0.05) with SME growth. When SROC was introduced as a moderator, it emerged as the dominant growth factor (β = 0.543, p < 0.05). SROC significantly amplified the association of regulatory resource networks with SME growth (β = 0.162, p < 0.05) and attenuated the contribution of cultural-cognitive networks (β = −0.429, p < 0.05), while having no significant moderating effect on normative resource networks. Discussion: These findings advance Social Exchange Theory by offering preliminary evidence that the economic value of institutional network exchanges varies with the firm's SROC. The study introduces the Social Exchange Orchestration Grid (SEOG) a novel theoretical framework that maps the differential economic value of institutional network archetypes against SROC providing manufacturing SME managers with a strategic tool for prioritising institutional network investments. Implications for SME policy in sub-Saharan Africa are discussed, with an emphasis on building orchestration capabilities as a potentially more critical investment than network acquisition per se.