Strategic Thinking and Entrepreneurial Orientation as Drivers of Adaptive Resilience in Global Manufacturing SMEs: A Narrative Review of Dynamic Capabilities and Cross-Context Variations

Problem statement

Despite growing recognition of resilience as a strategic imperative for manufacturing SMEs, existing literature provides an incomplete and fragmented understanding of its strategic antecedents. Research commonly examines strategic thinking, entrepreneurial orientation, and organisational resilience as discrete constructs, resulting in limited insight into their interactive effects and cumulative influence on adaptive resilience. Where resilience is investigated, emphasis frequently centres on short-term recovery or operational stability, overlooking adaptive and transformative processes that are critical^13,14 for long-term survival in volatile manufacturing environments.

Theoretical approaches further constrain understanding, as many studies rely on static resource-based explanations that inadequately capture the dynamic, cognitive, and behavioural mechanisms through which SMEs respond to uncertainty. Integration of dynamic capabilities theory remains limited, restricting explanation of how strategic thinking and entrepreneurial orientation enable firms to sense environmental shifts, seize emerging opportunities, and reconfigure resources over time. Empirical evidence also remains uneven across regions, with a concentration of studies in specific national or economic contexts, limiting the generalisability of findings to the global manufacturing SME landscape.

These limitations hinder the development of a unified conceptual framework capable of explaining how manufacturing SMEs build adaptive resilience through strategic thinking and entrepreneurial orientation. The absence of a systematic narrative synthesis that consolidates theoretical perspectives, empirical findings, and contextual variations constrains scholarly advancement and weakens practical guidance for SME leaders and policymakers. Addressing this gap necessitates a comprehensive narrative review that clarifies conceptual relationships, identifies knowledge gaps, and advances an integrated understanding of strategic thinking and entrepreneurial orientation as drivers of adaptive resilience in global manufacturing SMEs.

Specific objectives of the study

Rationale of the study

Manufacturing SMEs operate under heightened volatility driven by technological change, global supply chain fragility, regulatory pressures, and competitive intensity, making adaptive resilience a strategic necessity rather than an episodic response. Existing literature addresses strategic thinking, entrepreneurial orientation, and resilience largely in isolation, which limits understanding of how these constructs interact to support sustained adaptation. The dominance of static resource-based explanations further restricts insight into the cognitive and behavioural mechanisms through which SMEs navigate uncertainty over time. A narrative synthesis grounded in dynamic capabilities theory provides a more suitable lens for capturing the processes of sensing, seizing, and reconfiguring that underpin adaptive resilience. By integrating diverse theoretical strands and empirical evidence across contexts, the study responds to the need for a coherent and globally relevant explanation of resilience-building in manufacturing SMEs.

Purpose of the study

The purpose of this study is to develop an integrated conceptual understanding of how strategic thinking and entrepreneurial orientation jointly drive adaptive resilience in global manufacturing SMEs through dynamic capabilities. Through a narrative review of extant literature, the study aims to consolidate fragmented knowledge, clarify conceptual relationships, and illuminate contextual differences that shape resilience outcomes. The study seeks to advance strategic management and entrepreneurship theory by positioning adaptive resilience as a dynamic, capability-based outcome of strategic cognition and entrepreneurial behaviour. At a practical level, the study aims to provide a theoretically grounded foundation to inform future empirical research, managerial decision-making, and policy interventions targeted at strengthening SME resilience in volatile manufacturing environments.

Primary research question

How do strategic thinking and entrepreneurial orientation jointly contribute to adaptive resilience in global manufacturing SMEs through dynamic capabilities across different institutional and market contexts?

Data collection methods

This study employed a systematic qualitative review approach to gather evidence on adaptive resilience in manufacturing SMEs between 2020 and 2025. Data collection focused on both peer-reviewed and grey literature to ensure a comprehensive understanding of current practices and theoretical developments. Major electronic databases, including Scopus, Web of Science, ScienceDirect, and Google Scholar, were searched to identify relevant journal articles, conference proceedings, and industry reports. Grey literature, such as policy briefs, institutional reports, and case studies from SME support organisations, was incorporated to capture practical insights and contextual examples of resilience mechanisms. The collection process also involved citation tracking of key studies to identify additional relevant literature that may not have appeared in initial searches.

Search keywords

A set of carefully constructed search keywords was employed to ensure a balance between specificity and breadth. Primary keywords included “manufacturing SMEs,” “adaptive resilience,” “strategic thinking,” “entrepreneurial orientation,” “dynamic capabilities,” “strategic renewal,” “knowledge integration,” and “resource reconfiguration.” Boolean operators such as AND, OR, and NOT were applied to refine searches, and truncation (e.g., “resilien*”) was used to capture variations in terminology. The search strategy was iteratively refined based on preliminary screening outcomes to maximise retrieval of relevant studies without overwhelming the dataset with irrelevant results.

Screening and inclusion criteria

Screening involved a multi-stage process including title review, abstract evaluation, and full-text assessment. Studies were included if they were published between 2020 and 2025, written in English, and directly addressed the role of strategic capabilities, entrepreneurial orientation, or resilience mechanisms in manufacturing SMEs. Both empirical and conceptual studies were considered if they provided insight into how SMEs sense, seize, reconfigure, or renew resources and strategies to enhance adaptive capacity.

Exclusion criteria

Studies were excluded if they focused solely on large enterprises, non-manufacturing sectors, or contexts unrelated to strategic and entrepreneurial capabilities. Literature lacking methodological transparency, practical relevance, or sufficient evidence to support conclusions was also excluded. Non-English studies and publications prior to 2020 were omitted to maintain temporal and linguistic consistency.

Data analysis

Data were analysed using thematic synthesis, allowing the identification of recurring patterns, mechanisms, and contextual factors across studies. Emerging themes were mapped against the dynamic capabilities and organisational resilience frameworks to ensure conceptual coherence. NVivo software was employed to code, categorise, and visualise thematic relationships, facilitating systematic comparison across diverse studies and regional contexts.

Evaluation and rigour enhancement

Rigour was ensured through triangulation of findings from empirical and conceptual studies, cross-validation of evidence, and iterative discussions among the research team. Quality appraisal criteria assessed methodological transparency, relevance, and robustness of evidence, while consistency checks and peer feedback were used to mitigate selection and interpretive biases.

Reflexivity

Reflexivity was maintained throughout the review process, with conscious acknowledgment of the researcher’s assumptions, prior knowledge, and potential influence on theme identification. Reflective notes were documented to monitor interpretive decisions and ensure transparency, strengthening the credibility and validity of the findings.

Theoretical framework

This review is anchored on Dynamic capabilities theory was pronounced by Teece, Pisano and Shuen in 1997. The theory posits that firm competitiveness in volatile and uncertain environments depends not merely on the possession of valuable resources, but on the capacity to purposefully integrate, build, and reconfigure internal and external competences in response to rapid environmental change. Central to the theory is the idea that organisations must continuously sense changes in the environment, seize emerging opportunities, and reconfigure resources and operational routines to sustain performance over time.¹⁴

The theory rests on several key assumptions. It assumes that business environments are dynamic rather than stable, that competitive advantages are temporary rather than permanent, and that managerial cognition and strategic decision-making play a critical role in shaping organisational responses to uncertainty. It also assumes heterogeneity among firms, meaning that organisations differ in their ability to develop and deploy dynamic capabilities due to variations in leadership, learning processes, and organisational routines.^15,16

Dynamic capabilities theory explains strategic thinking and entrepreneurial orientation as higher-order strategic attributes that enable the development and deployment of sensing, seizing, and reconfiguring capabilities. Strategic thinking supports environmental interpretation, long-term orientation, and coherent decision-making, which are essential for sensing complex market and technological shifts. Entrepreneurial orientation reinforces this process by encouraging proactiveness, innovativeness, and calculated risk-taking, which facilitate opportunity seizing and experimentation. Together, these strategic attributes shape how manufacturing SMEs recognise threats and opportunities, mobilise resources, and adapt strategic trajectories across different institutional and market contexts.

The relevance of dynamic capabilities theory to this study lies in its ability to explain how strategic thinking and entrepreneurial orientation move beyond static resource endowments to become drivers of adaptive action. The theory provides a robust conceptual lens for understanding how manufacturing SMEs transform strategic cognition and entrepreneurial behaviour into adaptive resilience through continuous reconfiguration, particularly in environments characterised by technological disruption, supply chain volatility, and regulatory change.

The review is also grounded on Organisational resilience theory. The theory posits that resilience is not limited to the ability of organisations to absorb shocks and recover to a prior state, but also encompasses the capacity to adapt, learn, and transform in response to ongoing and unforeseen disruptions.¹⁷

The theory assumes that organisations operate as complex adaptive systems exposed to continuous stressors and episodic shocks. It assumes that uncertainty is inherent rather than exceptional, that disruptions can generate both threats and opportunities, and that resilience emerges from the interaction between organisational structures, processes, and human agency. A further assumption is that resilience is dynamic and path-dependent, shaped by prior learning, strategic choices, and institutional environments.¹⁸

Organisational resilience theory explains adaptive resilience as an outcome of proactive and forward-looking organisational behaviour rather than reactive crisis management. Within this framework, resilience reflects the ability of firms to adjust strategies, reconfigure operations, and renew competitive positioning over time. Strategic thinking contributes to resilience by enabling sense-making, anticipation, and strategic coherence under uncertainty, while entrepreneurial orientation strengthens resilience by fostering innovation, flexibility, and opportunity-driven responses to disruption. These mechanisms allow manufacturing SMEs to move beyond short-term recovery towards sustained adaptability across varying institutional and market conditions.

The relevance of organisational resilience theory to this study lies in its emphasis on adaptation and transformation as core elements of resilience. The theory aligns with the study’s focus on adaptive resilience as a long-term strategic outcome shaped by strategic and entrepreneurial capabilities. By anchoring the dependent variable, organisational resilience theory provides a coherent framework for understanding how manufacturing SMEs survive, adjust, and evolve in volatile global manufacturing environments, thereby complementing the process-oriented logic of dynamic capabilities theory.

Strategic environmental sensing and opportunity anticipation

Strategic environmental sensing and opportunity anticipation emerge from the interaction between strategic thinking and entrepreneurial orientation as a critical foundation of adaptive resilience in manufacturing SMEs.^12,19 In volatile manufacturing environments, leaders must make sense of fragmented, ambiguous, and rapidly evolving information while maintaining coherence between immediate operational demands and long-term strategic intent.^20,21 Strategic thinking provides the cognitive architecture for interpretation and integration, while entrepreneurial orientation injects alertness, curiosity, and forward momentum into environmental scanning activities.²² Together, these attributes strengthen the sensing dimension of dynamic capabilities by enabling SMEs to recognise weak signals early, interpret their strategic significance, and anticipate trajectories of change across different institutional and cultural contexts.

Cognitive interpretation of environmental complexity reflects the role of strategic thinking in transforming dispersed environmental signals into actionable strategic insight.²³ Manufacturing SMEs often face overlapping technological, regulatory, and competitive pressures that cannot be addressed through linear analysis alone.²⁴ Strategic thinking supports holistic pattern recognition, systems-level reasoning, and scenario-based interpretation, allowing leaders to understand how multiple external forces interact.²⁵ A practical example can be observed in German precision-engineering SMEs operating within highly regulated industrial ecosystems.^26,27 Faced with tightening environmental regulations and rapid advances in Industry 4.0 technologies, many such firms strategically interpret regulatory signals not merely as compliance costs but as indicators of future market expectations.²⁸ This cognitive reframing enables early investment in energy-efficient machinery and digital production systems, positioning these SMEs ahead of competitors when sustainability standards become mandatory.²⁹ The ability to cognitively integrate regulatory foresight, technological trends, and competitive positioning illustrates how strategic thinking strengthens environmental interpretation under complexity.

Proactive market and technology scanning highlights the behavioural contribution of entrepreneurial orientation to sensing capabilities.^30,31 While strategic thinking structures interpretation, entrepreneurial orientation drives continuous outward-looking behaviour, experimentation, and early engagement with emerging trends.³² In manufacturing SMEs, this often manifests as active monitoring of customer needs, supplier innovations, and alternative production technologies.³³ An illustrative example can be found among electronics manufacturing SMEs in South Korea, where intense competition and short product life cycles dominate. Firms with strong entrepreneurial orientation actively scan global consumer electronics markets and upstream component innovations, enabling early recognition of shifts towards miniaturisation and smart-device integration.^34,35 By proactively engaging with emerging technologies such as advanced semiconductors and embedded systems, these SMEs anticipate demand changes and adjust product development strategies before market saturation occurs. This proactive scanning behaviour reduces strategic surprise and enhances adaptive readiness in fast-moving technological contexts.³⁶

Context-sensitive intelligence gathering reflects the need for sensing practices to align with institutional and infrastructural realities across different environments.³⁷ Strategic thinking enables leaders to recognise that information sources, signal reliability, and scanning mechanisms vary across regions, while entrepreneurial orientation motivates adaptation rather than reliance on standardised approaches.³⁸ In emerging economies, where formal market data may be limited or unreliable, SMEs often depend on relational networks and informal intelligence channels.³⁹ A practical illustration can be seen in manufacturing SMEs within the Indian textile and apparel sector. These firms frequently rely on close relationships with buyers, intermediaries, and local clusters to gather intelligence on shifting export requirements, labour regulations, and fashion trends.⁴⁰ By adapting sensing practices to local institutional conditions rather than replicating practices from advanced economies, these SMEs enhance their ability to detect relevant signals despite infrastructural constraints. Context-sensitive intelligence gathering therefore strengthens resilience by aligning sensing mechanisms with environmental realities.⁴¹

Anticipatory decision framing captures how strategic thinking and entrepreneurial orientation jointly translate early signals into forward-looking strategic choices.^42,43 Strategic thinking aligns long-term intent with emerging environmental cues,⁴⁴ while entrepreneurial orientation supports timely action despite uncertainty.⁴⁵ This anticipatory framing reduces vulnerability by allowing SMEs to prepare for disruptions before they fully materialise. A relevant example can be observed in agribusiness manufacturing SMEs in Latin America facing climate variability and supply chain instability. Some food-processing SMEs in Chile, for instance, have used early climate data and global commodity trends to anticipate disruptions in raw material availability.⁴⁶ Strategic leaders frame these signals within long-term resilience goals, while entrepreneurial orientation encourages diversification of supplier bases and investment in alternative inputs. This anticipatory alignment between strategic intent and early warning signals enables these firms to absorb shocks with less disruption and maintain continuity in production and market supply.

Taken together, these mechanisms demonstrate that strategic environmental sensing and opportunity anticipation are not passive monitoring activities but dynamic, contextually embedded processes. Strategic thinking provides interpretive depth and coherence, entrepreneurial orientation sustains proactive engagement with uncertainty, and their interaction enables manufacturing SMEs to sense change early and accurately.^45,47 Across diverse cultural and institutional settings, this integrated sensing capability forms a critical foundation for adaptive resilience by transforming environmental uncertainty into strategic foresight and preparedness.

Opportunity seizing through strategic commitment and entrepreneurial action

Opportunity seizing represents the action-oriented dimension of dynamic capabilities, translating sensed opportunities into tangible strategic commitments.⁴⁸ In manufacturing SMEs, this process depends on the alignment between strategic thinking, which provides clarity, prioritisation, and long-term coherence, and entrepreneurial orientation, which energises decisive action under uncertainty.^38,49 Together, these attributes enable firms to commit resources, accept calculated risks, respond swiftly to emerging opportunities, and align strategic choices with institutional conditions across diverse global contexts. Through this interaction, opportunity seizing becomes a disciplined yet entrepreneurial process that supports adaptive resilience rather than impulsive decision-making.

Strategic resource prioritisation reflects the role of strategic thinking in guiding how manufacturing SMEs allocate scarce resources toward initiatives that enhance adaptability.⁵⁰ Given constraints in capital, skills, and technological capacity, SMEs cannot pursue all opportunities simultaneously.⁵¹ Strategic thinking enables leaders to evaluate opportunities against long-term strategic intent and resilience objectives, ensuring that resource commitments reinforce future adaptability rather than short-term gains.⁵² A practical example can be observed in Japanese manufacturing SMEs within the automotive supply chain. Faced with the transition toward electric vehicles, many small component manufacturers strategically prioritised investments in battery-related components and lightweight materials rather than expanding legacy internal combustion technologies.^53,54 Despite limited resources, deliberate prioritisation allowed these firms to align investment decisions with anticipated industry transformation, strengthening their strategic position and resilience in the face of structural change.

Calculated risk-taking behaviour illustrates how entrepreneurial orientation complements strategic thinking by encouraging firms to act despite uncertainty.^8,55 Manufacturing environments often involve irreversible investments, making risk aversion a common barrier to adaptation.⁵⁶ Entrepreneurial orientation reframes risk as manageable and opportunity-driven rather than purely threatening.⁵⁷ An illustrative case can be found among manufacturing SMEs in Italy’s industrial districts, particularly in specialised machinery and design-intensive production. These firms often undertake calculated risks by investing in customised production technologies and niche product innovations without guaranteed demand.⁵⁸ Strategic thinking ensures that such risks are aligned with core competencies and long-term positioning, while entrepreneurial orientation supports commitment to innovation despite uncertain market reception.⁵⁹ This balanced approach enables SMEs to reposition themselves in high-value niches, reinforcing resilience through differentiation rather than cost competition.

Speed of strategic response highlights the importance of timely execution in opportunity seizing, especially in fast-moving manufacturing sectors.⁶⁰ Strategic thinking provides a forward-looking roadmap, while entrepreneurial orientation drives swift mobilisation of resources and rapid decision-making.⁶¹ Together, they reduce delays that could erode first-mover advantages. A relevant example can be drawn from manufacturing SMEs in China’s consumer goods sector, where market preferences and competitive dynamics shift rapidly.⁶² Firms with strong entrepreneurial orientation and strategic clarity have demonstrated the ability to rapidly retool production lines and adjust product specifications in response to emerging consumer trends.⁶³ By combining anticipatory planning with rapid execution, these SMEs exploit short-lived market windows, sustaining competitiveness in highly dynamic environments.

Institutionally aligned strategic choices reflect how opportunity seizing must adapt to variations in policy frameworks, financial systems, and market maturity across regions.⁶⁴ Strategic thinking enables leaders to understand institutional incentives and constraints, while entrepreneurial orientation motivates proactive engagement with these structures.⁶⁵ In Nordic countries, such as Sweden, manufacturing SMEs often align opportunity seizing with strong policy support for sustainability and innovation.⁶⁶ Firms actively leverage government grants, green financing instruments, and collaborative innovation platforms to pursue advanced manufacturing and clean technology initiatives.⁶⁷ Strategic thinking ensures alignment with national industrial strategies, while entrepreneurial orientation drives active participation in policy-enabled opportunities.⁶⁸ This institutional alignment enhances resilience by embedding opportunity seizing within supportive regulatory and financial ecosystems.

Collectively, these dimensions demonstrate that opportunity seizing in manufacturing SMEs is neither purely analytical nor purely opportunistic. Strategic thinking provides discipline, coherence, and long-term alignment, while entrepreneurial orientation injects action, speed, and risk tolerance. Across diverse cultural and institutional contexts, their interaction enables SMEs to commit resources, embrace uncertainty, and act decisively, transforming environmental opportunities into adaptive resilience and sustained strategic renewal.

Resource reconfiguration and organisational flexibility

Resource reconfiguration and organisational flexibility constitute the transformative core of adaptive resilience in manufacturing SMEs.⁶⁹ While environmental sensing and opportunity seizing determine what to respond to and when to act, reconfiguration determines how firms realign internal and external resources to sustain performance under changing conditions.⁷⁰ This process relies on the interaction between strategic cognition, which provides deliberate direction and coherence, and entrepreneurial behaviour, which enables experimentation, flexibility, and action under uncertainty. Together, these attributes allow manufacturing SMEs to continuously recombine assets, reshape organisational arrangements, and adapt practices to diverse institutional contexts.⁷¹

Strategic recombination of assets reflects the role of strategic thinking in deliberately restructuring production systems, supplier relationships, and technology portfolios to align with evolving competitive conditions.^72,73 Rather than acquiring entirely new resources, resilient SMEs often reconfigure existing assets in novel ways. A practical example can be observed among manufacturing SMEs in France’s advanced materials sector. Facing increased cost pressures and demand for customised solutions, several firms strategically restructured supplier networks by shifting from transactional sourcing to collaborative partnerships with specialised material providers. At the same time, production processes were reorganised to support small-batch, high-precision manufacturing. Strategic thinking guided these recombination decisions by aligning operational changes with long-term positioning in high-value markets, enabling adaptation without excessive capital expenditure.²⁴

Innovative experimentation highlights the contribution of entrepreneurial orientation to reconfiguration processes.^45,74 Entrepreneurial behaviour encourages trial-and-error learning, piloting of new processes, and incremental innovation within manufacturing operations.⁷⁵ This experimentation reduces rigidity and enables firms to adapt gradually rather than through disruptive overhauls. An illustrative example can be found among manufacturing SMEs in Vietnam’s furniture and wood-processing industry. As global buyers increasingly demanded sustainable and customised products, entrepreneurial-oriented firms experimented with alternative materials, modular designs, and digital fabrication techniques.^76,77 These initiatives were often implemented on a small scale to test feasibility before broader rollout. Through continuous experimentation, these SMEs incrementally adapted production practices, balancing innovation with operational stability in a resource-constrained environment.⁷⁸

Flexible organisational structures demonstrate how strategic cognition and entrepreneurial behaviour translate into internal adaptability.⁷⁹ Strategic thinking supports the redesign of organisational routines and coordination mechanisms, while entrepreneurial orientation fosters openness to role flexibility and cross-functional collaboration.⁸⁰ In manufacturing SMEs, rigid hierarchies can slow response to volatility, making structural flexibility a key resilience mechanism.⁸¹ A relevant example can be seen in manufacturing SMEs in Canada’s advanced manufacturing clusters. Many firms have adopted flatter organisational structures and project-based teams that allow rapid reallocation of responsibilities in response to shifts in customer demand or supply chain disruptions.^82,83 Strategic leadership ensures alignment with overarching goals, while entrepreneurial culture empowers employees to take initiative, enabling swift operational adjustment without undermining strategic coherence.⁸⁴

Contextual adaptation of reconfiguration practices underscores the influence of institutional and structural conditions on how SMEs reconfigure resources.⁸⁵ Strategic thinking enables leaders to understand regulatory constraints and labour market dynamics, while entrepreneurial orientation encourages creative navigation of these conditions.⁸⁶ In sub-Saharan Africa, for instance, manufacturing SMEs often face limited access to advanced technology and rigid labour regulations.⁸⁷ A practical illustration can be found among manufacturing SMEs in Ghana’s agro-processing sector, where firms adapt reconfiguration practices by leveraging flexible labour arrangements, local sourcing, and incremental mechanisation. Rather than adopting capital-intensive technologies common in advanced economies, these SMEs reconfigure operations in ways that align with institutional realities, enhancing resilience through contextual fit rather than replication of foreign models.^87,88

Taken together, resource reconfiguration and organisational flexibility illustrate how adaptive resilience emerges from continuous internal transformation rather than static efficiency. Strategic cognition provides purposeful direction for recombination, entrepreneurial behaviour sustains experimentation and flexibility, and contextual awareness ensures institutional alignment. Across diverse manufacturing environments, this integrated reconfiguration capability enables SMEs to respond to volatility, sustain competitiveness, and evolve strategically over time.

Strategic learning and knowledge integration

Strategic learning and knowledge integration form the cumulative mechanism through which manufacturing SMEs convert experience into sustained adaptive capacity.⁸⁵ In volatile environments, resilience depends not only on timely sensing, seizing, and reconfiguration, but also on the ability to learn systematically from both success and failure.⁸⁹ Strategic thinking provides the reflective discipline required to interpret past actions and outcomes, while entrepreneurial orientation energises experiential learning through experimentation and innovation.^90,91 Together, these attributes strengthen the learning dimension of dynamic capabilities by embedding continuous knowledge creation, integration, and transfer within organisational practice across diverse contexts.

Reflective strategic learning captures the role of strategic thinking in enabling deliberate evaluation of prior disruptions, strategic choices, and performance consequences.⁹¹ Rather than treating shocks as isolated events, resilient manufacturing SMEs engage in structured reflection to extract strategic lessons that inform future decisions.⁹² A practical example can be observed among manufacturing SMEs in the United Kingdom’s aerospace and precision engineering sector. Following supply chain disruptions linked to geopolitical uncertainty and pandemic-related shocks, several firms systematically reviewed procurement strategies, inventory policies, and supplier dependencies. Strategic leaders facilitated post-disruption reviews that linked operational outcomes to strategic assumptions, enabling recalibration of sourcing strategies and investment priorities. This reflective process strengthened preparedness for future disruptions by institutionalising learning rather than relying on ad hoc responses.^93,94

Learning through entrepreneurial experimentation highlights the behavioural contribution of entrepreneurial orientation to organisational learning.⁷⁴ Experimentation allows SMEs to generate new knowledge under conditions of uncertainty where prior experience may be insufficient.⁹⁵ Entrepreneurial orientation legitimises trial-and-error initiatives, pilot projects, and exploratory innovation, even when outcomes are uncertain.⁹⁶ An illustrative example can be found in manufacturing SMEs within Brazil’s metalworking and machinery sector. Firms pursuing product diversification often engage in small-scale experimentation with new production techniques and customised solutions for niche markets.⁹⁷ These experiments generate practical knowledge about cost structures, customer preferences, and technological feasibility, which informs subsequent scaling decisions. Through repeated cycles of experimentation, SMEs build a repository of experiential knowledge that enhances adaptive decision-making.

Knowledge integration across functions and networks reflects the need to align learning generated in different organisational domains.⁹⁸ Strategic thinking supports the synthesis of insights from production, supply chains, and markets, while entrepreneurial orientation encourages boundary-spanning collaboration and information sharing.⁹⁹ In manufacturing SMEs, silos can undermine resilience by fragmenting knowledge.¹⁰⁰ A relevant example can be seen among manufacturing SMEs in the Netherlands’ high-tech manufacturing clusters. These firms actively integrate knowledge across engineering, operations, and customer-facing functions through cross-functional teams and collaborative platforms.¹⁰¹ External networks with suppliers, research institutions, and industry associations further enrich learning processes. By integrating internal and external knowledge, these SMEs ensure that strategic insights translate into coordinated operational and market responses.¹⁰²

Cross-context knowledge transfer underscores how learning mechanisms must adapt to institutional diversity and resource variation across regions.¹⁰³ Strategic thinking enables leaders to recognise contextual differences, while entrepreneurial orientation supports flexible adaptation of learned practices rather than rigid replication.¹⁰⁴ A practical illustration can be found in multinational manufacturing SMEs originating from Turkey that operate across European and Middle Eastern markets. These firms transfer production know-how and process innovations across units while adapting learning routines to local regulatory frameworks, labour skills, and market volatility.¹⁰⁵ Rather than standardising practices wholesale, strategic leaders encourage contextual modification, ensuring that transferred knowledge remains relevant and effective. This adaptive transfer enhances resilience by leveraging accumulated learning while respecting institutional constraints.¹⁰⁶

Collectively, strategic learning and knowledge integration demonstrate that adaptive resilience in manufacturing SMEs is reinforced through continuous, multi-level learning processes. Strategic thinking provides structure and coherence to reflection, entrepreneurial orientation sustains experiential knowledge creation, and integration mechanisms ensure alignment across functions, networks, and contexts. Across diverse manufacturing environments, this learning capability enables SMEs to refine strategies, improve responsiveness, and sustain long-term adaptability under persistent uncertainty.

Strategic renewal and long-term adaptability

Strategic renewal and long-term adaptability represent the culmination of adaptive resilience in manufacturing SMEs, extending resilience beyond short-term recovery towards sustained strategic evolution.⁹² In environments characterised by persistent uncertainty and structural change, resilience depends on the capacity to periodically reassess strategic direction, renew value propositions, and embed adaptability within organisational routines.¹⁰⁷ Strategic thinking provides the cognitive foundation for reassessing purpose and positioning, while entrepreneurial orientation sustains momentum through continuous innovation and opportunity-driven behaviour.¹⁰⁸ Together, these attributes enable manufacturing SMEs to pursue renewal as an ongoing strategic process rather than a reactive adjustment to disruption.

Reframing of strategic intent reflects the role of strategic thinking in enabling firms to periodically revisit and redefine their competitive positioning and value propositions.¹⁰⁹ As markets evolve, strategic intent must shift to remain relevant.¹¹⁰ A practical example can be observed among manufacturing SMEs in Switzerland’s precision instruments sector. Facing increasing global competition and commoditisation pressures, several firms have strategically reframed their intent from product-based competition towards solution-oriented offerings that integrate services, customisation, and long-term client partnerships.¹¹¹ Strategic thinking enables leaders to reassess where and how value is created, ensuring that renewal efforts align with emerging market expectations rather than past success formulas.¹¹²

Sustained innovativeness highlights how entrepreneurial orientation embeds innovation as a continuous organisational practice.¹¹³ Rather than treating innovation as a response to crisis, resilient SMEs institutionalise experimentation, creativity, and opportunity recognition within everyday operations.¹¹⁴ An illustrative example can be found among manufacturing SMEs in Finland’s clean technology and advanced manufacturing sectors.¹¹⁵ These firms maintain ongoing innovation pipelines that include incremental process improvements, product upgrades, and exploration of new materials. Entrepreneurial orientation legitimises continuous investment in innovation, even during periods of relative stability, ensuring that firms remain prepared for future disruption and capable of strategic renewal.

Alignment of short-term adaptation with long-term vision underscores the importance of coherence between immediate responses to volatility and overarching strategic objectives.¹¹⁶ Strategic thinking ensures that adaptive actions taken under pressure reinforce, rather than undermine, long-term goals, while entrepreneurial orientation enables rapid execution without strategic drift.¹¹⁷ A relevant example can be drawn from manufacturing SMEs in Australia’s food and beverage processing industry. During periods of supply chain disruption, firms have implemented short-term operational adjustments such as sourcing alternative inputs or modifying production schedules.¹¹⁸ Strategic leaders frame these adaptations within a long-term vision of market diversification and brand positioning, ensuring that immediate responses contribute to strategic progression rather than opportunistic fragmentation.

Institutional embeddedness of renewal processes highlights how national policies, cultural norms, and market structures shape the pace and form of strategic transformation.¹¹⁹ Strategic thinking enables SMEs to interpret institutional signals, while entrepreneurial orientation drives proactive engagement with supportive or constraining environments.¹²⁰ An illustrative case can be seen among manufacturing SMEs in Rwanda’s light manufacturing sector, where government-led industrialisation policies, special economic zones, and skills development initiatives shape strategic renewal pathways. Firms align renewal efforts with national development priorities, leveraging policy incentives while adapting business models to local market conditions.¹²¹ This institutional embeddedness enhances the sustainability of renewal by grounding strategic transformation within supportive socio-economic structures.

Taken together, strategic renewal and long-term adaptability demonstrate how resilience in manufacturing SMEs evolves into a forward-looking strategic capability. Strategic thinking enables periodic reframing of intent and coherence across time horizons, entrepreneurial orientation sustains continuous innovativeness, and institutional alignment ensures contextual viability. Across diverse global contexts, this integrated renewal process allows manufacturing SMEs to evolve strategically, maintain relevance, and sustain adaptive resilience in the face of enduring uncertainty.

Strategic environmental sensing, opportunity anticipation and adaptive resilience in manufacturing SMEs

The literature largely supports the review’s argument that strategic environmental sensing emerges from the joint influence of strategic cognition and entrepreneurial proactiveness, with multiple studies confirming that SMEs capable of interpreting regulatory, technological, and market signals early tend to secure competitive positioning advantages.^20,25,45,47 Empirical work on industrial SMEs in Germany similarly shows that regulatory foresight linked to sustainability transitions often stimulates innovation rather than compliance-only responses, reinforcing the review’s interpretation of cognitive reframing.^26,29 Studies examining export-driven technology sectors in South Korea also align with findings that entrepreneurial orientation promotes continuous scanning and rapid product adaptation in environments characterised by short innovation cycles.^34–36 Research on relational market systems in India corroborates the observation that SMEs substitute formal market intelligence with network-based information flows, supporting institutional contingency arguments in sensing theory.^37–41 Yet some contradictions persist in prior scholarship. Certain studies attribute opportunity recognition primarily to managerial cognition and interpretive skill, while others emphasise structural embeddedness, learning routines, and absorptive capacity as stronger predictors of sensing effectiveness. Divergent findings often reflect sectoral differences, technological intensity, and institutional predictability; regulated engineering industries tend to reward interpretive foresight, whereas volatile consumer-technology sectors favour behavioural experimentation and rapid iteration.^{23–25,30–33}

Important research gaps remain, particularly the shortage of longitudinal evidence linking sensing practices to sustained resilience rather than short-term adaptation.^42–45 Cross-regional comparisons are still limited, even though emerging evidence from climate-sensitive manufacturing systems such as agri-processing SMEs in Chile indicates that environmental sensing interacts strongly with supply volatility and ecological risk.⁴⁶ Future research should therefore integrate multi-level designs connecting managerial cognition, organisational routines, and ecosystem information infrastructures, while mixed-method approaches could better capture informal sensing mechanisms often invisible in survey-based research.^37–41 Policy interventions should focus on strengthening institutional support for anticipatory intelligence in SMEs, including publicly funded foresight platforms, cluster-based data-sharing systems, and structured collaboration between research institutions and manufacturing networks. Governments can also improve sensing effectiveness by issuing predictable regulatory transition pathways in sustainability and digital transformation, thereby reducing uncertainty and encouraging early strategic investment.^28,29,44,45 Such coordinated policy frameworks would help SMEs convert fragmented environmental signals into actionable foresight, reinforcing adaptive resilience across diverse manufacturing environments.

Opportunity seizing and adaptive Resilience in manufacturing SMEs

The literature largely supports the review’s argument that strategic environmental sensing emerges from the joint influence of strategic cognition and entrepreneurial proactiveness, with multiple studies confirming that SMEs capable of interpreting regulatory, technological, and market signals early tend to secure competitive positioning advantages.^20,25,45,47 Empirical work on industrial SMEs in Germany similarly shows that regulatory foresight linked to sustainability transitions often stimulates innovation rather than compliance-only responses, reinforcing the review’s interpretation of cognitive reframing.^26,29 Studies examining export-driven technology sectors in South Korea also align with findings that entrepreneurial orientation promotes continuous scanning and rapid product adaptation in environments characterised by short innovation cycles.^34–36 Research on relational market systems in India corroborates the observation that SMEs substitute formal market intelligence with network-based information flows, supporting institutional contingency arguments in sensing theory.^37–41 Yet some contradictions persist in prior scholarship. Certain studies attribute opportunity recognition primarily to managerial cognition and interpretive skill, while others emphasise structural embeddedness, learning routines, and absorptive capacity as stronger predictors of sensing effectiveness. Divergent findings often reflect sectoral differences, technological intensity, and institutional predictability; regulated engineering industries tend to reward interpretive foresight, whereas volatile consumer-technology sectors favour behavioural experimentation and rapid iteration.^{23–25,30–33}

Important research gaps remain, particularly the shortage of longitudinal evidence linking sensing practices to sustained resilience rather than short-term adaptation.^42–45 Cross-regional comparisons are still limited, even though emerging evidence from climate-sensitive manufacturing systems such as agri-processing SMEs in Chile indicates that environmental sensing interacts strongly with supply volatility and ecological risk.⁴⁶ Future research should therefore integrate multi-level designs connecting managerial cognition, organisational routines, and ecosystem information infrastructures, while mixed-method approaches could better capture informal sensing mechanisms often invisible in survey-based research.^37–41 Policy interventions should focus on strengthening institutional support for anticipatory intelligence in SMEs, including publicly funded foresight platforms, cluster-based data-sharing systems, and structured collaboration between research institutions and manufacturing networks. Governments can also improve sensing effectiveness by issuing predictable regulatory transition pathways in sustainability and digital transformation, thereby reducing uncertainty and encouraging early strategic investment.^28,29,44,45 Such coordinated policy frameworks would help SMEs convert fragmented environmental signals into actionable foresight, reinforcing adaptive resilience across diverse manufacturing environments.

Resource reconfiguration and organisational flexibility in manufacturing SMEs

The literature consistently supports the view that resource reconfiguration and organisational flexibility are central to adaptive resilience, with multiple studies highlighting that SMEs combining strategic cognition with entrepreneurial behaviour can realign assets, restructure operations, and adjust organisational arrangements to sustain performance under environmental volatility.^69,70,71 Comparative evidence across diverse contexts shows convergence in findings: European SMEs in France strategically recombine supplier networks and production processes to support customised, high-value manufacturing,^24,72,73 while Asian SMEs in Vietnam leverage incremental experimentation to adapt materials and modular production techniques.^76–78 Research in North America, particularly Canada, similarly illustrates that flatter organisational structures and project-based teams enhance internal adaptability and responsiveness.^82–84 These studies collectively indicate that deliberate strategic planning provides coherence for internal transformation, while entrepreneurial experimentation drives flexibility, enabling SMEs to balance innovation with operational stability. Differences in emphasis across studies often reflect institutional and sectoral conditions, with resource-rich, technology-intensive contexts prioritising structural redesign and asset recombination, whereas resource-constrained environments highlight incremental adaptation, local sourcing, and flexible labour arrangements as mechanisms of resilience.^85–88

Despite widespread agreement on the importance of reconfiguration and flexibility, the literature reveals gaps and areas requiring further investigation. Longitudinal evidence on the sustainability of reconfiguration practices remains limited, particularly in SMEs operating under chronic resource constraints or regulatory uncertainty, leaving questions about the durability of adaptive routines. Cross-regional comparative studies are scarce, especially in emerging and sub-Saharan African contexts, where institutional constraints, labour dynamics, and technology access significantly shape reconfiguration strategies.^85–88 Future research should therefore adopt multi-level and longitudinal designs to examine how strategic cognition, entrepreneurial experimentation, and contextual adaptation interact over time to sustain competitive advantage. Policy interventions should focus on enabling SMEs to implement adaptive resource practices by providing support for technology adoption, skills development, flexible labour policies, and collaborative platforms for shared innovation. Governments can also incentivise incremental experimentation and modular production approaches through grants, training programmes, and sectoral infrastructure development, ensuring that SMEs can reconfigure resources effectively while aligning with institutional and market realities.^{24,71,76,78,87}

Strategic learning, knowledge integration and adaptive resilience in manufacturing SMEs

The literature strongly supports the review’s central claim that organisational learning reinforces adaptive resilience when reflective cognition is combined with entrepreneurial experimentation, with prior studies similarly linking post-disruption reflection to improved strategic preparedness and supply-chain robustness.^85,89–94 Empirical research on industrial SMEs in United Kingdom confirms that structured post-crisis reviews often lead to revised sourcing strategies, risk diversification, and improved strategic foresight, reinforcing the importance of reflective learning routines. Studies of innovation-driven SMEs in Brazil likewise align with the argument that entrepreneurial experimentation accelerates knowledge creation and strategic renewal in uncertain markets.^74,95–97 Evidence from collaborative innovation systems such as those observed in Netherlands also supports the view that cross-functional and network-based knowledge integration enhances responsiveness and coordination in technology-intensive manufacturing contexts.^98–102 Nonetheless, contradictions remain concerning whether learning outcomes depend more on internal reflection or external knowledge exchange. Some studies find that structured internal review processes drive strategic adaptation, whereas others show that network embeddedness and inter-firm learning exert stronger influence on innovation outcomes. Divergent findings often reflect industry knowledge intensity and cluster maturity; high-tech ecosystems reward network integration, while resource-constrained SMEs rely more heavily on internal experiential learning.^{74,91–94,95–99}

Significant research gaps persist in understanding how learning mechanisms evolve longitudinally and across institutional environments. Evidence remains limited on how SMEs institutionalise lessons over time rather than reverting to reactive routines after immediate crises subside.^103–106 Cross-context comparative work is also scarce, even though emerging insights from internationally active manufacturing SMEs in Turkey indicate that adaptive transfer of knowledge across regulatory and market environments strongly influences resilience trajectories. Future research should therefore adopt longitudinal and multi-level approaches linking managerial cognition, experimentation routines, and network learning infrastructures, while also examining how digital knowledge platforms reshape SME learning dynamics. Policy interventions should prioritise strengthening SME learning ecosystems through subsidised industry–university collaboration, shared innovation laboratories, and structured post-crisis review frameworks supported by public agencies. Governments can also promote knowledge integration by funding cluster-based digital knowledge repositories, mobility programmes for technical skills exchange, and advisory services that help SMEs convert experiential insights into formalised strategic routines.^98–102 Such policy alignment would enable manufacturing SMEs to transform episodic experience into cumulative strategic capability, reinforcing long-term adaptive resilience across diverse institutional environments.

Strategic renewal, long-term adaptability and adaptive resilience in manufacturing SMEs

Prior research largely supports the review’s argument that strategic renewal emerges from the interaction of reflective strategic cognition and sustained entrepreneurial dynamism, with studies consistently linking periodic reassessment of competitive positioning to long-term SME survival in structurally shifting industries.^92,107–112 Evidence from high-precision manufacturing systems in Switzerland similarly shows that SMEs shifting from product competition to service-embedded solutions strengthen differentiation and customer lock-in, reinforcing the importance of reframing strategic intent under commoditisation pressures. Research on innovation-intensive sectors in Finland aligns with the review’s claim that continuous innovation pipelines foster renewal readiness even during stable periods, confirming that entrepreneurial orientation functions as a stabilising force for long-term adaptability rather than merely a crisis response.^113–115 Empirical studies of export-exposed food processing firms in Australia also support the emphasis on aligning short-term adjustments with long-term positioning, demonstrating that adaptive responses strengthen competitiveness only when embedded within coherent strategic trajectories.^116–118 Despite this convergence, contradictions remain in the literature regarding whether renewal is driven primarily by internal strategic leadership or by institutional opportunity structures. Some studies attribute renewal success to visionary managerial cognition, whereas others emphasise industrial policy alignment, access to innovation systems, and ecosystem support as stronger predictors of sustained transformation.^109–117

Important research gaps remain, particularly concerning how SMEs institutionalise renewal routines over time rather than relying on episodic transformation triggered by crisis.^92,107,119 Cross-regional comparisons are still limited, even though emerging evidence from policy-guided industrial systems such as those in Rwanda suggests that national development strategies, skills initiatives, and industrial zones significantly shape SME renewal pathways.^120,121 Future research should therefore integrate dynamic capability theory with institutional development perspectives to explain how policy environments influence the durability and direction of strategic renewal. Longitudinal and ecosystem-level analyses would also clarify whether continuous innovativeness leads to cumulative competitiveness or strategic overstretch in resource-constrained firms. Policy interventions should prioritise strengthening SME renewal capacity through predictable industrial transition frameworks, long-term innovation financing instruments, and structured public–private platforms that support experimentation beyond immediate productivity gains. Governments can also enhance renewal by embedding SMEs in sectoral foresight programmes, export upgrading initiatives, and skills transformation strategies aligned with technological shifts.^{108,119–121} Such coordinated policy ecosystems would enable manufacturing SMEs to convert episodic adaptation into sustained strategic evolution, reinforcing long-term adaptive resilience across diverse institutional environments.

Theoretical implications

The review examines relationship between literature review and the underpinning theoretical framework thereby identifying the persistent challenges and eminent gaps as shown in Table 4.

Environmental sensing and opportunity anticipation in manufacturing SMEs: Theoretical alignment

The literature review strongly aligns with the principles of Dynamic Capabilities Theory, illustrating that strategic thinking and entrepreneurial orientation function as higher-order capabilities enabling manufacturing SMEs to sense environmental complexity, seize opportunities, and reconfigure resources under volatile conditions.^12,19,22,30 Empirical examples from Germany, South Korea, and India demonstrate that SMEs leverage cognitive interpretation and proactive scanning to anticipate regulatory, technological, and market shifts, consistent with Teece, Pisano, and Shuen’s assertion that competitiveness depends on purposive integration and reconfiguration of internal and external competences.^14–16 Furthermore, strategic learning, knowledge integration, and renewal practices observed in the UK, Brazil, and Finland reflect the dynamic capabilities logic, whereby continuous experimentation, cross-functional knowledge transfer, and iterative innovation enable firms to adapt long-term strategies in response to environmental turbulence.^85,97,115 Organisational Resilience Theory complements this perspective by emphasizing that adaptive resilience emerges not merely from reactive recovery but from the proactive adjustment of structures, processes, and strategic intent.^17,18 The literature demonstrates that SMEs combining strategic cognition and entrepreneurial behaviour are capable of sustained adaptation, learning from past disruptions, and embedding flexibility within organisational routines, thereby operationalizing resilience as an ongoing strategic outcome rather than episodic crisis response.

Despite this theoretical coherence, persistent challenges and research gaps remain. Contradictions exist regarding the relative influence of internal managerial cognition versus external institutional structures on sensing, opportunity seizing, and renewal outcomes, particularly in resource-constrained or emerging-market contexts.^23,37,109 Longitudinal evidence on the institutionalization of adaptive routines, cross-contextual transfer of learning, and sustainability of reconfiguration strategies remains limited, creating uncertainty about how SMEs maintain resilience over extended periods.^42,103,119 Policy interventions are therefore critical to bridging these gaps. Governments can strengthen SME adaptive capacity through structured foresight platforms, innovation grants, and cluster-based knowledge networks that facilitate early sensing and opportunity alignment.^28,29,44 Supporting technology adoption, skills development, flexible labour arrangements, and sectoral infrastructure further enhances reconfiguration and experimentation capabilities.^71,76,87 Additionally, embedding SMEs in long-term industrial transition frameworks, sectoral skills initiatives, and export upgrading programmes ensures that adaptive and renewal processes are institutionally supported, transforming episodic adaptation into sustained strategic resilience across diverse manufacturing environments.^108,119,121

Opportunity seizing in manufacturing SMEs: Theoretical alignment

The literature on opportunity seizing in manufacturing SMEs strongly aligns with the principles of Dynamic Capabilities Theory, which emphasises the capacity of firms to sense, seize, and transform resources in response to environmental change.^38,48,49 Strategic thinking and entrepreneurial orientation operate as higher-order capabilities that enable SMEs to prioritise resources, take calculated risks, and execute rapid strategic actions under uncertainty.^50,55,60 Empirical evidence from Japan, Italy, and China illustrates that deliberate resource allocation, risk-enabled innovation, and swift operational adjustment translate environmental signals into concrete strategic commitments, reflecting the theory’s assertion that competitiveness relies on purposeful integration and deployment of dynamic capabilities.^14,15 Organisational Resilience Theory complements this framework by highlighting that adaptive resilience emerges from proactive, forward-looking behaviours rather than mere reactive responses.^17,18 Strategic thinking provides coherence and alignment with long-term objectives, while entrepreneurial orientation energises opportunity-driven experimentation and institutional engagement, collectively reinforcing SMEs’ ability to convert short-term opportunities into sustained adaptive and strategic outcomes.^53,63,68

Despite theoretical coherence, persistent gaps remain in understanding the contextual contingencies influencing opportunity seizing. Contradictions in the literature highlight differences in whether opportunity exploitation is primarily shaped by internal managerial cognition or by institutional conditions such as regulatory frameworks, financial systems, and policy incentives.^64,65 Longitudinal evidence on how SMEs institutionalise opportunity-seizing routines for sustained resilience remains scarce, particularly in emerging and resource-constrained markets.^52,59 Policy interventions are therefore crucial to strengthen SME adaptive capacity. Governments can support structured foresight and innovation platforms, provide targeted grants and financial instruments, and promote cluster-based knowledge networks to enhance strategic prioritisation, risk-enabled innovation, and rapid response capabilities.^66,67 Additionally, embedding SMEs within sector-specific transition frameworks and policy-aligned innovation initiatives ensures that opportunity-seizing practices are systematically reinforced, enabling firms to translate environmental opportunities into long-term adaptive resilience and strategic renewal.⁶⁸

Resource reconfiguration and organisational flexibility in manufacturing SMEs: Theoretical alignment

The literature on resource reconfiguration and organisational flexibility underscores the centrality of dynamic capabilities theory in explaining how manufacturing SMEs transform internal and external resources to sustain performance under volatile conditions.^69,70 Strategic thinking provides deliberate direction for recombining assets, redesigning production systems, and aligning operational changes with long-term competitive positioning.^24,72 Entrepreneurial orientation complements this by fostering experimentation, incremental innovation, and flexible organisational structures, allowing SMEs to respond rapidly to market and technological shifts.^45,80 Together, these attributes operationalise the dynamic capabilities cycle of sensing, seizing, and reconfiguring, demonstrating how higher-order strategic cognition and proactive behaviour enable SMEs to adapt continuously across diverse institutional and market contexts.^71,85 Organisational resilience theory reinforces this perspective by highlighting that adaptive outcomes emerge not merely from reactive responses but from the sustained capacity to transform structures, processes, and routines under uncertainty.^17,18 The literature exemplifies practical applications in France, Vietnam, Canada, and Ghana, indicating that SMEs tailor reconfiguration and flexibility mechanisms to contextual realities, thereby enhancing adaptive resilience.

Despite these insights, persistent challenges remain. Empirical evidence is limited regarding the scalability of reconfiguration practices across SMEs with varying resource endowments, particularly in emerging economies where access to technology and skilled labour is constrained.^87,88 Additionally, the interaction between strategic cognition and entrepreneurial experimentation in shaping long-term adaptability is underexplored, leaving gaps in understanding how SMEs institutionalise these practices systematically. Policy interventions can address these gaps by providing targeted support for resource recombination and flexibility. Governments and industry bodies could facilitate technology access through grants and subsidised equipment, promote skills development programmes tailored to flexible operations, and establish collaborative platforms for SMEs to share reconfiguration best practices. Incentivising incremental innovation and context-sensitive organisational restructuring can further strengthen adaptive capacity, ensuring that SMEs not only respond to immediate disruptions but also evolve strategically over time.^86,88

Strategic learning and knowledge integration in manufacturing SMEs: Theoretical alignment

The literature on strategic learning and knowledge integration in manufacturing SMEs aligns strongly with both Dynamic Capabilities Theory and Organisational Resilience Theory. Dynamic Capabilities Theory frames learning as a core mechanism through which firms strengthen their capacity to sense, seize, and reconfigure resources under uncertainty.^85,89 Strategic thinking provides SMEs with a structured approach to reflective learning, enabling deliberate evaluation of past disruptions and the extraction of actionable insights.^91,94 Entrepreneurial orientation complements this by fostering experimentation, trial-and-error initiatives, and innovation-driven knowledge creation, which expands the experiential base for future decision-making.^74,97 Cross-functional integration and the establishment of external knowledge networks demonstrate how learning is operationalised to support coordinated responses across organisational domains, aligning internal capabilities with external opportunities and threats.^98,102 Organisational Resilience Theory further underscores the role of continuous learning and knowledge integration as dynamic processes that enable firms not merely to recover from shocks but to adapt and transform over time.^17,18 Collectively, these frameworks explain how SMEs embed adaptive resilience into strategic routines through multi-level, continuous learning processes.

Despite these theoretical linkages, the literature highlights several persistent gaps and challenges. Evidence remains limited on how SMEs in resource-constrained or institutionally diverse contexts systematically implement learning mechanisms that combine reflective thinking with experimental action.^103,104 There is also a lack of empirical studies exploring how knowledge integration across geographically dispersed units can be standardised without undermining contextual adaptability, particularly in SMEs operating internationally.^105,106 Policy interventions could address these gaps by promoting structured learning frameworks, supporting collaborative platforms for cross-functional and inter-organisational knowledge sharing, and incentivising innovation-led experimentation. Governments and industry associations can facilitate training programmes on knowledge management, provide access to shared research and technology platforms, and support international collaboration networks to enhance cross-context learning. Such measures would enable SMEs to harness strategic learning and knowledge integration effectively, thereby reinforcing adaptive resilience and sustaining competitive advantage in volatile manufacturing environments.

Strategic renewal and long-term adaptability in manufacturing SMEs: Theoretical alignment

The literature on strategic renewal and long-term adaptability in manufacturing SMEs aligns closely with Dynamic Capabilities Theory and Organisational Resilience Theory, highlighting renewal as the apex of adaptive resilience. Dynamic Capabilities Theory positions resource reconfiguration, learning, and innovation as iterative processes through which firms sustain competitiveness under uncertainty.^92,107 Strategic thinking enables SMEs to periodically reframe strategic intent, reassess value creation, and align short-term actions with long-term objectives, providing cognitive coherence across temporal horizons.^109,112 Entrepreneurial orientation complements this by embedding continuous innovation and opportunity-driven behaviour into organisational routines, ensuring that experimentation and creativity are not reactive but integral to strategy.^113,115 Organisational Resilience Theory further reinforces that resilience extends beyond recovery to sustained adaptability, emphasising the role of institutional embeddedness and proactive engagement with policy, cultural, and market structures.^{17,18,119,121} Together, these theoretical perspectives explain how SMEs integrate strategic cognition, entrepreneurial action, and contextual awareness to transform adaptive capabilities into long-term strategic renewal.

Despite these theoretical insights, the literature identifies persistent challenges and gaps. Empirical studies remain limited on the mechanisms through which SMEs balance short-term operational adaptations with long-term strategic vision, particularly in resource-constrained environments.^116,117 There is also a scarcity of research examining how SMEs embed renewal processes across diverse institutional contexts while maintaining flexibility and innovation pipelines.^120,121 Policy interventions could address these gaps by promoting supportive regulatory frameworks, innovation incentives, and skills development programmes. Governments and industry associations might provide guidance for scenario-based strategic planning, offer tax incentives for sustained R&D investment, and facilitate collaborative platforms for knowledge and technology exchange. Such measures would enhance SMEs’ capacity to institutionalise strategic renewal, maintain long-term adaptability, and strengthen resilience in dynamic and volatile global manufacturing landscapes.

Policy implications for enhancing adaptive resilience in manufacturing SMEs

The literature review underscores that adaptive resilience in manufacturing SMEs is shaped by the integrated influence of strategic thinking and entrepreneurial orientation, manifested through environmental sensing, opportunity seizing, resource reconfiguration, strategic learning, and renewal. Policy interventions can therefore play a pivotal role in creating enabling environments that strengthen these capabilities. Governments and industrial regulators should prioritise policies that facilitate timely access to market intelligence, technological innovations, and sector-specific knowledge. For instance, supporting platforms for real-time industry data, digital innovation hubs, and cluster-based knowledge sharing can enhance SMEs’ strategic environmental sensing and anticipatory decision-making. Policies promoting research and development incentives, technology adoption grants, and collaborative initiatives between SMEs, universities, and research institutions can stimulate entrepreneurial experimentation and proactive opportunity seizing, reducing barriers to innovation and calculated risk-taking in dynamic manufacturing contexts.

In addition, institutional support mechanisms should encourage flexibility and resource reconfiguration within SMEs. Policymakers can offer targeted financial instruments, such as low-interest loans, tax incentives, or grants for upgrading production systems and adopting sustainable technologies, enabling firms to strategically recombine assets and experiment with new operational models. Labour market policies that encourage skills development, vocational training, and flexible workforce arrangements can further facilitate organisational adaptability and cross-functional collaboration. Moreover, long-term industrial policies that integrate sustainability, clean technology, and digitalisation objectives can reinforce strategic renewal processes, ensuring that SMEs’ short-term adaptive actions align with national development priorities. Across emerging and developed markets, these policy interventions create structural and institutional conditions that enhance the strategic and entrepreneurial capabilities of SMEs, promoting sustained adaptive resilience in volatile global manufacturing environments.

Directions for future research on adaptive resilience in manufacturing SMEs

The review highlights the critical interplay between strategic thinking and entrepreneurial orientation in fostering adaptive resilience through sensing, seizing, reconfiguring, learning, and renewal capabilities. Future research could explore the contextual contingencies that influence this interplay, particularly in under-researched institutional settings such as sub-Saharan Africa, Southeast Asia, and Latin America. Comparative studies examining how SMEs across different regulatory, cultural, and technological environments develop and deploy dynamic capabilities would deepen understanding of contextual adaptation mechanisms and provide evidence for tailoring resilience strategies to specific institutional conditions.

Additionally, longitudinal research is needed to investigate how strategic thinking and entrepreneurial orientation interact over time to sustain adaptive resilience, especially under persistent volatility, technological disruption, and global supply chain shocks. Empirical studies could focus on measuring the impact of integrated dynamic capabilities on firm performance, innovation outcomes, and long-term strategic renewal, using multi-level data across organisational functions and networks. There is also scope to examine the role of digital technologies, data analytics, and Industry 4.0 tools in enhancing strategic environmental sensing and knowledge integration. Finally, future research could evaluate the effectiveness of specific policy interventions in strengthening SME resilience, providing actionable insights for governments and industry bodies seeking to support sustainable competitiveness in global manufacturing sectors.

Recommendations for policy and practice

Based on the findings of this review, actionable recommendations emerge for strengthening adaptive resilience in manufacturing SMEs through coordinated policy and practical interventions. Policymakers should prioritise initiatives that reduce structural barriers while facilitating access to finance, technology, and capacity building. National and regional governments, industrial development agencies, and economic planning bodies can design targeted support programmes such as innovation grants, subsidised technology adoption schemes, and strategic management training tailored to SME needs. For example, in Sweden, manufacturing SMEs have successfully aligned opportunity seizing with strong policy support for sustainability and innovation by leveraging government grants, green financing instruments, and collaborative innovation platforms, enabling firms to pursue advanced manufacturing and clean technology initiatives that reinforce resilience and competitive positioning.^66–68 Such interventions create an enabling environment for proactive environmental sensing, resource reconfiguration, and strategic renewal, ensuring that SMEs can translate emerging opportunities into long-term adaptive success.

At the practice level, SME leaders should embed adaptive processes into organisational routines by fostering strategic thinking, entrepreneurial experimentation, and knowledge integration. This includes developing systematic environmental scanning mechanisms, cross-functional learning structures, and piloting programmes to encourage incremental innovation. Industrial associations, chambers of commerce, and innovation hubs are key stakeholders in supporting these initiatives by facilitating knowledge exchange, connecting SMEs with research institutions, and exposing firms to global market trends. A relevant example is found in German precision-engineering SMEs, which strategically interpreted regulatory and technological signals not merely as compliance costs but as indicators of future market demand, enabling early investment in energy-efficient machinery and digital production systems that positioned them ahead of competitors when sustainability standards became mandatory.^28,29 Similarly, agribusiness SMEs in Chile used early climate and global commodity trend data to anticipate disruptions in raw material availability, diversifying supplier bases and investing in alternative inputs to sustain continuity in production and market supply.⁴⁶

Collaboration between policymakers, industry stakeholders, and SME leaders is essential to institutionalise these practices. Strategies should include public–private partnerships integrating financial support, technology transfer, and skills development, as well as regulatory reforms that encourage flexibility and innovation. Industrial clusters, export promotion agencies, and trade associations can also promote best-practice sharing and collective learning forums. By combining enabling policy frameworks with proactive organisational practices, manufacturing SMEs can overcome resource constraints, navigate institutional complexities, and sustain long-term adaptability. Ultimately, these recommendations highlight that resilience is a dynamic capability strengthened through coordinated action across multiple levels, allowing SMEs to harness uncertainty as strategic opportunity.