This study examines how rural entrepreneurs convert adaptive decision logic into enterprise performance under resource scarcity and uneven digital readiness, whether effectuation dimensions and bricolage influence performance directly or through dynamic capabilities, and whether digital technology adoption conditions the conversion process in constrained rural settings.
Data were collected from 800 rural micro and small enterprises in Eastern India using a time-lagged survey design. Partial least squares structural equation modeling tested direct, mediating and moderating relationships. Alternative performance paths and priority capability gaps were identified using fuzzy-set qualitative comparative analysis and importance–performance mapping.
Experimentation, flexibility, pre-commitments and bricolage all improve enterprise performance through dynamic capabilities. Affordable losses negatively affect performance and do not support capability development. Digital technology adoption served as the boundary condition, strengthening experimentation and commitment-driven capability building but weakening flexibility-based approaches. High performance emerges when adaptive behaviors integrate into coordinated capability routines.
This study advances resource orchestration theory by suggesting that adaptive logic significantly impacts rural enterprise performance by improving dynamic capabilities. Excessive focus on risk avoidance hampers this mechanism. Rural entrepreneurs should institutionalize experimentation and stakeholder coordination to build capacity. Policymakers should utilize context-specific programs enabling strategic resource allocation and capability-driven digital adoption.
This study reveals a decision paradox in resource-limited rural entrepreneurship, where excessive loss avoidance hampers capability development and long-term results, framing performance as an orchestration challenge influenced by behavioral and digital factors.
