From kinship ties to market-based advantage: A strategic decision framework for brand resonance in fashion SMEs

Abstract

This study aims to model the strategic decision-making process of fashion Small and Medium-Sized Enterprises (SMEs) in Indonesia in transforming bonding social capital into a market-based advantage, as reflected in marketing performance. By integrating Social Capital Theory and the Dynamic Capabilities Perspective within a decision science framework, this study investigates how managerial decisions to develop brand resonance capability function as a structural conversion mechanism. An empirical quantitative approach was employed using survey data collected from 265 key decision-makers (owners and managers) of fashion SMEs located in Indonesia's creative textile industry clusters, including Bandung, Surakarta, Pekalongan, and Yogyakarta. Data was analyzed using Variance-Based Structural Equation Modeling (PLS-SEM) using SmartPLS. The findings reveal that reliance on bonding social capital alone does not directly generate significant improvements in marketing performance. However, the structural model demonstrates a full mediation effect, indicating that internal social capital must be strategically transformed through investments in brand resonance capability. This study contributes to the decision science literature by proposing a strategic choice architecture that bridges inward-looking relational assets and externally oriented competitive advantage.