Learning under pressure: unpacking employee and organizational learning in SMEs amid disruption and volatility

Purpose This study aims to examine how small and medium enterprises (SMEs) achieve international performance through configurational combinations of learning-related capabilities, with particular attention to how employee-level learning translates into organizational learning and absorptive capacity. Design/methodology/approach Drawing on absorptive capacity theory, organizational learning theory and the dynamic capabilities view, the study uses fuzzy-set Qualitative Comparative Analysis (fsQCA) on survey data from 68 export-oriented SMEs operating in India. The fsQCA approach enables the identification of multiple equifinal configurations leading to high international performance and allows for the examination of causal asymmetry among learning-related conditions. Findings The analysis reveals absorptive capacity as a necessary and core condition across all high-performance configurations. Organizational learning mechanisms function as a secondary core condition, while international experience and institutional support operate as peripheral and compensatory elements. Three distinct configurational pathways – capability-driven independence, institutional support–based compensation and experience-driven adaptability – explain how SMEs achieve comparable international performance through different learning architectures. Research limitations/implications The study advances internationalization and organizational learning theory by explicitly adapting large-firm capability models to the SME context. Unlike large firms, where capabilities are assumed to be cumulative and additive, SME international performance emerges from non-linear, configurational combinations in which certain capabilities are foundational while others substitute for experiential or resource constraints. The findings contribute to SME internationalization research by demonstrating that international success emerges from multiple configurations of learning-related capabilities and by clarifying how individual employee learning becomes institutionalized as organizational capability in resource-constrained SMEs. Practical implications The findings suggest that SME managers should prioritize building absorptive capacity as a foundational capability before international scaling, while policymakers should design differentiated support mechanisms that compensate for experiential deficits rather than apply uniform interventions. The results caution against benchmarking SMEs based on isolated practices and highlight the need for capability strategies aligned with firm maturity and institutional context. Originality/value This study offers one of the few empirically grounded configurational analyses of SME learning and international performance in an emerging economy context. By distinguishing core and peripheral learning conditions and demonstrating substitution effects among capabilities, the study provides a nuanced alternative to dominant linear internationalization models.