The Role of Managerial Competencies, Inventory Management Practices, and Business Intelligence in Enhancing SME Financial Performance: A Conceptual Framework

Purpose: This study aims to develop a conceptual framework that integrates managerial competencies (MC) to help organizations improve their financial performance (FP) by enhancing inventory management practices, supported by business intelligence (BI), in small and medium enterprises (SMEs). Design/methodology/approach: The conceptual framework was constructed by reviewing models of managerial competencies, inventory management practices, business intelligence, and financial performance measures. A combination of recent literature provides the basis for developing the conceptual framework for the SME financial performance measures. The independent variable is managerial competencies. The mediator variable in this framework is inventory management practices, while the moderator variable is business intelligence. In addition, financial performance was presented as the dependent variable. Findings: This study presents a conceptual framework based on the Resource-Based View (RBV) theory, showing how managerial skills influence SME financial performance via inventory management practices. Additionally, business intelligence enhances the effectiveness of these practices. The framework offers an integrated view of the managerial, operational, and technological resources necessary for improving SME financial results. Originality/value: This research is valuable for the owners/managers of SMEs seeking to improve internal practices and FP. Moreover, the current study benefits researchers, SME managers, and decision-makers by examining the importance of managerial competencies in enhancing internal practices with the support of BI in SMEs. However, the current study aims to provide theoretical and practical contributions of managerial competencies and BI in SMEs' internal operations and financial performance.