CONSTRUCTING A RESILIENCE MEASUREMENT MODEL FOR SMALL AND MEDIUM-SIZED ENTERPRISES IN VIETNAM: A PLS-SEM APPROACH

Small and medium-sized enterprises (SMEs) constitute around 97% of the total number of businesses in Vietnam, which contributes to 60% of the national growth. In a dynamic and uncertain business environment, both domestically and internationally, the resilience of SMEs has become a topic of significant interest among researchers and practitioners. Resilience, however, is a multifaceted concept that depends on the specific context in which it is applied. Therefore, this study aims to construct a measurement model for assessing the resilience of SMEs in Vietnam. Drawing from a dataset collected from 500 SMEs and employing the PLS-SEM technique. the findings of this research indicate that the resilience index is a combination of reflective and formative models. Resilience at level three is a formative construct comprising four prioritized components: agility, anticipatory capability, flexibility, and adaptability. The reflective measurement model of agility, anticipation, flexibility, and adaptability confirms its reliability and validity. These findings form the basis for the effective allocation of resources to enhance resilience within SMEs. Understanding the nuanced aspects of resilience can benefit in developing targeted strategies to bolster SMEs against the challenges posed by an ever-changing business landscape.


INTRODUCTION
Small and Medium-Sized Enterprises (SMEs) account for up to 40% of national income (GDP) in emerging economies and provide up to 60% of total employment (Ndiaye et al., 2018).SMEs have created 80% of all new jobs in Europe in the last five years (Pedraza, 2021), and they are considered a crucial driver of world economic growth, global supply chains, innovation, and employment.SMEs in Vietnam are no exception (OECD, 2017;Naradda Gamage et al., 2020), as SMEs share around 97% of the businesses, and contribute 60% of the national economic growth in Vietnam ( Nguyen et al., 2020;Dinh et al., 2022).In recent years, the world has experienced potential changes, risks, uncertainty, complexity, and unpredictability ( Sword-Daniels et al., 2018;Dishon & Gilead, 2021).This has challenged the resilience of SMEs given their limited resources (Eggers, 2020).As a result, they frequently endure a high rate of failure, which can be linked to high operational costs, fierce market competition, and unpredictable environmental changes (Saad et al., 2021).
'Resilience' comes from the Latin word 'Resilio', which means 'to bounce back' (Willans & Stewart-Brown, 2021).Resilience was introduced in ecosystem research in the 1970s and has since expanded into many different fields, such as economics, risk management, sociology, psychology, and computer networks (Hu & Pavao-Zuckerman, 2019;Ngoc & Vy, 2023).Resilience is defined as the ability to regain equilibrium after experiencing an adverse event (Shepherd & Williams, 2020).It is not an end state of existence but a process of adaptation and growth in a challenging context.The resilience of a business is manifested in the way it survives and thrives in a volatile and uncertain environment (Gölgeci et al., 2020).Resilience includes the ability to capture signals from the external environment, decode them, quickly take action to improve or reinvest in the business model, or even reshape the industry in which the business operates.The resilience of SMEs can be said to be a multi-dimensional and contextdependent concept (Falciola et al., 2023).
The objective of this study is to create a comprehensive index that will assess the resiliency of SMEs in Vietnam.It is anticipated that three contributions will be made to the existing body of literature.First, the multidimensional dimensions of SME resilience in the context of Vietnam will be defined and measured.Second, it will combine reflective and formative measurement approaches to create a hierarchical model of resilience.Third, it will offer a basis for additional micro-research on its results by offering an empirical measuring model of SME resilience.The paper is organized with the theoretical review in the subsequent section, followed by the research methodologies and findings.Last, insights into the study's implications and conclusions are presented in the final section.

LITERATURE REVIEW
Resilience, as defined by Ramezani and Camarinha-Matos (2020), encompasses an organism's capacity to adapt, recover, and potentially flourish despite adverse circumstances.This concept extends beyond mere survival to include the ability to adjust successfully in the face of challenges, harm, tragedies, threats, and major shocks.Resilience operates at various levels, from individual attributes to meso investigations covering groups, communities, and organizations (Linkov & Trump, 2019;Ngoc & Vy, 2023).At the individual level, resilience is described as a process involving the utilization of resources to sustain well-being (Vella & Pai, 2019).On the organizational front, resilience is perceived as the ability of a dynamic system to adapt effectively (Ma et al., 2018).Organizational resilience, as described by Varajão et al. (2021), involves managing disturbances and workflow to restore stability and achieve organizational objectives securely and promptly.Duchek (2020) defined organizational resilience as the capability not only to survive but also to thrive in the face of adversity.According to Ungar (2018), resilience is an essential trait shared by individuals, groups, organizations, and systems, enabling successful adaptation to adverse circumstances.
While resilience is often dichotomously approached to represent its presence or absence (Cissé & Barrett, 2018), it typically exists on a continuum and manifests across various levels.Resilience evolves as a function of development and interaction with the environment.Li et al. (2020) proposed that the resilience of a socialecological system encompasses the ability to learn, integrate experiences and knowledge, adjust to external changes, and thrive within a stable range.This aids in maintaining processes despite changes in internal needs and external pressures on the social-ecological system.
Vietnamese SMEs, defined as per criteria stipulated in the Government's decree No. 80/2021/ND-CP summarized in Table 1, are vital components of the country's economic landscape and are characterized by their dynamic nature and operation within complex socio-economic contexts.SMEs in Vietnam face numerous challenges, such as limited resources, access to finance, regulatory constraints, and market fluctuations (Ngoc & Vy, 2023), which often necessitate them to enter recovery phases to mitigate losses and resume normal operations.The resilience of businesses, including SMEs, has gained significant attention from researchers exploring their ability to survive shocks and risks (Coles, Ritchie, & Wang, 2021;Hillmann & Guenther, 2021).In this study, enterprise resilience within the context of Vietnamese SMEs is defined as the use of resources to respond and make positive adjustments to consolidate, maintain, and develop business operations, performance, and long-term competitive advantages (Ngoc & Vy, 2023).This encompasses diverse approaches to managing uncertainty, including a focus on anticipation, agility, flexibility, and adaptability (Sinniah et al.,2022).

Anticipation
involves the proactive identification and assessment of potential risks, opportunities, and trends that may impact SMEs' operations and performance.By anticipating future scenarios, SMEs can develop strategic foresight and contingency plans to mitigate risks and capitalize on emerging opportunities (Sinniah et al.,2022;Zighan & Ruel, 2023).Agility denotes the ability of SMEs to respond promptly and effectively to changes in their external environment, market dynamics, or internal conditions.Agile SMEs exhibit fluidity in decision-making, resource allocation, and operational adjustments, enabling them to seize opportunities, overcome obstacles, and maintain competitive advantages in dynamic markets (Jafari-Sadeghi et al., 2022;Sinniah et al.,2022).Flexibility refers to the capacity of SMEs to adapt and modify their strategies, processes, and structures in response to changing circumstances or stakeholder needs.Flexible SMEs demonstrate resilience in their ability to pivot, innovate, and reallocate resources to align with evolving market demands and organizational objectives (Miroshnychenko et al., 2021;Sinniah et al.,2022).Adaptability encompasses the broader ability of SMEs to evolve and transform in response to long-term trends, systemic changes, or disruptive events.Adaptive SMEs embrace change as an inherent aspect of their organization, fostering a culture of continuous learning, innovation, and improvement to thrive in uncertain and volatile environments (Sinniah et al.,2022 2021), when applying PLS-SEM to build a measurement model, the following key steps should be taken: Step 1: Select a set of observable variables or indicators for each latent construct.These indicators should be theoretically relevant and reliable measures of the underlying construct.
Step 2: Conduct data cleaning to handle missing values and outliers and ensure it meets the assumptions of PLS-SEM.
Step 3: Define the relationships between the latent constructs and their corresponding indicators.In PLS-SEM, two types of measurement models can be explored, including reflective and formative models, as indicated in Table 2.

Reflective construct
Formative construct The construct causes indicators: where X i : the i th indicator; Y: the reflective construct; ß i : the coefficient measuring the expected impact of Y on X i ; ε i : the measurement error for X i .
Indicators cause the construct: where X i : the i th indicator; Y: the formative construct; γ i : the weight contributed by X i ; δ: the common error term.
Step 4: Evaluate the goodness-of-fit of the measurement model using various criteria such as the Average Variance Extracted (AVE), Composite Reliability (CR), and factor loadings for reflective measurement models and collinearity among indicators (VIF) and the significance and relevance of outer weights (Haile & Kang, 2020).PLS-SEM is particularly useful with relatively small sample sizes or complex models with multiple latent constructs, as it allows for flexibility in model specification and provides insights into the relationships between constructs and their indicators.
Given the diversified definitions of resilience, the hierarchical model of its measurement can differ in each research that is tailored to meet specific objectives.In line with the rationale outlined in Section 2, a measurement model for SME resilience following the indicators presented by Chu (2015) and Sinniah et al. (2022) was developed.The development of measurement scales for assessing the SMEs' resilience involved a systematic three-step approach.Initially, a comprehensive literature review was conducted, followed by brainstorming sessions aimed at identifying and delineating four core dimensions pertinent to SME resilience: anticipation, agility, flexibility, and adaptability.Subsequently, a preliminary version of the measurement instrument was drafted in both Vietnamese and English languages and disseminated among domain experts for critical evaluation and feedback.
Through iterative rounds of review and refinement incorporating insights and suggestions from these experts, the draft instrument underwent successive revisions until achieving consensus among the expert panel.In the final step, the revised instrument was subjected to pilot testing among a sample of 30 SME board members in Ho Chi Minh City to evaluate its practical applicability and acceptability within the target population.The pilot testing phase aimed to gauge the feasibility and relevance of the instrument in capturing the intended constructs of SME resilience.Ultimately, the refined measurement scale, comprising four distinct dimensions and a total of 23 itemized indicators, is presented in detail in Table 3 of this study.

Table 3. Resilience measurement
Code Indicators AT Anticipation AT1 Our organization consistently keeps a close watch on changes in the markets.AT2 Our organization consistently keeps a close watch on competitors' actions AT3 Our organization consistently keeps a close watch on changes of consumer preference.AT4 Our organization consistently keeps a close watch on changes in regulatory/legal issues.AT5 Our organization consistently keeps a close watch on economic shifts.AT6 Our organization consistently keeps a close watch on technological advancements AD Adaptability AD1 Our organization often embraces new techniques.AD2 Our organization regularly launches new products or services.AD3 Our organization often makes changes to our products or services.AD4 Our organization regularly embraces new technologies and acquires fresh skills.AG Agility AG1 Our organization swiftly adapts to shifts in the overall consumer demand.AG2 Our organization promptly responds to competitors' new product or service introductions.AG3 Our organization rapidly implements updated pricing structures in reaction to shifts in competitors' pricing.AG4 Our organization swiftly adjusts the range of products or services available for sale, whether expanding or reducing it.AG5 Our organization swiftly changes suppliers for a competitive cost, good quality or shorter lead time.AG6 Our organization rapidly embraces innovative technologies to enhance the production of superior, more efficient, and cost-effective products or services.AG7 Our organization swiftly ventures into new domestic or international markets.FL Flexibility FL1 Our organization demonstrates flexibility in the allocation of marketing resources to promote a wide range of products or services.FL2 Our organization displays flexibility when it comes to allocating production resources to produce a variety of products or services.FL3 Our organization maintains flexibility in product design to accommodate a multitude of potential products and services.FL4 Our organization is flexible in modifying the product strategy to match the targeted markets FL5 Our organization efficiently reallocates organizational resources to align with our company's planned strategies.FL6 Our organization adapts the resources available for the development, manufacturing, and delivery of its intended products or services to specific target markets.Assessment of the Level 2 resilience reflective measurement model was conducted.Enhanced loadings on a construct imply a substantial degree of shared characteristics among the associated indicators.Following an examination of the loading coefficient criteria, the scale's reliability was assessed using various measures, namely Cronbach's Alpha, Roh_A, Composite Reliability (CR), and Average Variance Extracted (AVE).To meet the recommended standards set by Hair Jr et al. ( 2021), Cronbach's Alpha and Roh_A values should be equal to or greater than 0.7, satisfactory CR values should be between 0.7 and 0.9, and AVE should surpass 0.5.The evaluation of indicator reliability reveals that all indicators have a Cronbach's Alpha coefficient exceeding 0.7, indicating an acceptable level of reliability.The lowest Cronbach's Alpha value corresponds to the latent variable AD at 0.867, while the highest is associated with AG at 0.903, as shown in Table 5.The Composite Reliability (CR) coefficient, presented in Table 4, demonstrates the consistency among the indicators within measurement model elements.All CR results for the scales range from above 0.8 to below 0.95, affirming that the indicators used to gauge the latent variable are relevant, and the model's indicators are suitable.The level 3 resilience formative model in Table 7 indicates no collinearity between VIF ( <5) and the significant outer weights.The results of formative and reflective measurement models of SMEs' resilience are in Table 8.The findings indicate that agility contributes the most to resilience, followed by anticipation.Flexibility plays the third most important role, with adaptability being the least significant factor.

DISCUSSION
The findings of this study shed light on the dimensions contributing to resilience among SMEs in Vietnam, with a particular emphasis on agility (0.396), anticipation (0.345), flexibility (0.279), and adaptability (0.209).The significance of agility in bolstering resilience is highlighted, a result that resonates with the dynamic business landscape prevailing in Vietnam.Given the rapid changes and uncertainties characterizing the Vietnamese market, SMEs that can swiftly adjust their strategies and operations are better equipped to navigate challenges and disruptions effectively.This aligns with global research trends emphasizing the pivotal role of agility in enhancing business resilience (Nyamrunda & Freeman, 2021;Olaleye et al., 2021;Hadjielias et al., 2022).
The substantial contribution of anticipation to resilience underscores the importance of a forward-looking approach among Vietnamese SMEs.By proactively identifying potential threats and opportunities, SMEs can develop strategic plans to mitigate risks and capitalize on emerging trends (Zighan & Ruel, 2023).This emphasizes the significance of strategic planning and risk assessment in the Vietnamese business context, aligning with best practices advocated in global business resilience literature.
While flexibility remains a crucial aspect of resilience, its slightly lower ranking compared to agility and anticipation suggests that Vietnamese SMEs prioritize swift adaptation and proactive planning over sheer adaptability.Flexibility nonetheless remains a key component of resilience, complementing agility and www.ieeca.org/journal533 anticipation in building robustness within SMEs.This nuanced understanding underscores the need for SMEs to strike a balance between agility, anticipation, and flexibility to effectively navigate the volatile business environment in Vietnam (Ngoc & Vy, 2023).
The relatively lower contribution of adaptability to resilience in the Vietnamese context suggests that, while important, the ability to transform and evolve over time may not be as immediately critical for Vietnamese SMEs as are agility and anticipation.This implies that in the short term, rapid response and proactive planning are more valued strategies among Vietnamese SMEs, however, businesses must also maintain a degree of adaptability to remain competitive in the long term while navigating the specific challenges and opportunities within the Vietnamese market.
Comparing these results with other research underscores the variability of factors contributing to resilience across different industries, regions, and economic conditions (Sinniah et al.,2022).While agility and anticipation emerge as primary strategies for enhancing resilience among Vietnamese SMEs, the relative importance of these factors may differ in other contexts.Nonetheless, in the context of Vietnam-a developing economy with a fast-paced business environment-these findings underscore the critical role of agility and anticipation in fostering resilience among SMEs.
In conclusion, the findings of this study highlight the importance of agility and anticipation as primary strategies for enhancing resilience among SMEs in Vietnam.While flexibility and adaptability remain essential, the dynamic business landscape in Vietnam prioritizes swift adaptation and proactive planning to effectively navigate challenges and capitalize on opportunities.These insights have implications for policymakers, practitioners, and researchers seeking to support the resilience and sustainability of SMEs within the Vietnamese economy.

CONCLUSIONS AND RECOMMENDATION
In Vietnam, there has been limited exploration of the measurement model for SMEs' resilience through the development of an integrated index using PLS-SEM.This statistical modeling approach is particularly suitable for research scenarios characterized by constraints such as small sample sizes, non-normally distributed data, and complex models, which are frequently encountered in the field of social sciences.The resilience index for SMEs in Vietnam comprises four essential components: anticipation, agility, flexibility, and adaptability.This structure aligns with established theory and prior empirical findings, making it a practical representation of a comprehensive set of indicators for further research on resilience outcomes within the Vietnamese context.The notable strength of this integrated index lies in its ability to discern the individual contribution of each dimension to the components and, subsequently, to the overall index.These findings shed light on the specific attributes critical for enhancing resilience among Vietnamese SMEs.Within this context, the capacity to promptly adapt and respond to evolving circumstances (agility) and the ability to foresee potential challenges (anticipation) emerge as pivotal factors.While flexibility also holds significance, adaptability, characterized by the capacity to undergo gradual adjustments and transformations over time, appears to exert a comparatively lower influence on overall resilience.This insight underscores the significance of proactive and agile strategies in fortifying the resilience of SMEs operating in Vietnam's dynamic environment.

Table 1 .
Criteria of Vietnamese SMEs stipulated in the Government's decree No. 80/2021/ND-CP (Doan, Le, Nguyen, Nguyen, & Dang, 2022;Hoang & Le Tan, 2023)e that consisted of a list of SMEs in Ho Chi Minh City, Hanoi, and Da Nang.The hierarchical model of SMEs' resilience was developed based on PLS-SEM.PLS-SEM is a statistical technique used in social sciences and business research to build and analyze measurement models and structural models simultaneously(Doan, Le, Nguyen, Nguyen, & Dang, 2022;Hoang & Le Tan, 2023).According toHair Jr et al. ( ). www.ieeca.org/journal529

Table 8 .
Formative and reflective measurement models of SMEs' resilience