SMEs' Radical Product Innovation: The Role of Internally and Externally Oriented Knowledge Capabilities

How relational capability can influence the success of business partnerships

Purpose

The present article aims to investigate the quality of the relationships in a business partnership for a project in Medtech field and the components that most influence them, with special attention to relational capabilities (RCs). Dyadic relationships and mainly RCs are considered critical factors for the success of a partnership.

Design/methodology/approach

A case study was used to evaluate the influence of RC on the progress of an alliance between a start-up and a small and medium scale enterprise (SME). The evaluation is performed using a questionnaire. To highlight such progress, the same questions were asked at the start of the partnership and one year later. The results were compared to analyse the improvement of RC and draw conclusions on the correlation between RC and alliance performance.

Findings

The method adopted allowed for a clear identification of the criticalities of the partnership. The authors found evidence that poor RCs lead to confusion, a sense of exclusion and a lack of collaboration amongst members. Results confirmed that increased RC and aligning the allies' capabilities positively affect the alliance's performance.

Research limitations/implications

Exogenous variables influencing the partnership's progress were not included in the present study. Future research may consider them.

Originality/value

Limited prior research is available on collaboration between SME and start-ups. The present authors aim to investigate the topic further, investigating RCs between firms. The article is also a starting point for future case study comparisons.

Organisational capabilities and small and medium sized firms’ attainment of innovation outcomes: the moderating roles of exports and formal business networks

Purpose

The authors examine the influence of planning and execution capability (PEC) and operational improvement capability (OIC) on small-and-medium-sized firms’ (SMEs) attainment of different innovation outcomes under the conditions of exports and formal business networks, based on the capability-based perspective and organisational learning literature.

Design/methodology/approach

The authors analyse time-series data about UK SMEs, extracted from the 2015 and 2016 UK Longitudinal Small Business Surveys (LSBS).

Findings

The authors failed to find any direct effects of PEC and OIC on product innovation outcomes. However, the authors discovered that OIC supports the generation of process innovation outputs more strongly than PEC. Additionally, exports and formal business networks provide SMEs with different learning opportunities. The authors find limited support that exports amplify the beneficial effect of PEC on product innovation outcomes more than formal business networks. On the other hand, formal business networks strengthen the effect of PEC on process innovation outcomes more than exports. As a result, exports reduce the beneficial effect of OIC on product innovation outcomes more than formal business networks. However, formal business networks weaken the beneficial effect of OIC more than exports.

Originality/value

The authors distinguish between two types of organisational capabilities – PEC and OIC – and examine their impact on SMEs in achieving innovation outcomes. The authors also identify SMEs’ involvement in exports and formal business networks as the important boundary conditions for such effects. xD; xA; xD; xA;

Contributions to Sustainability in SMEs: Human Resources, Sustainable Product Innovation Performance and the Mediating Role of Employee Creativity

The analysis of human resources and sustainable innovation through organizational variables is useful, albeit limited, for predicting complex interactions for sustainability development in small and medium-sized enterprises (SMEs). This paper seeks to overcome this limitation, proposing three models with variables at two levels, namely, for the development of creativity (individual level) and sustainable product innovation performance (organizational level) and sustainability development. Theoretical models are tested using the Structural Equations Model. It is posited that knowledge, motivation, and relationships (individual level) may be predictors of creativity. In addition, creativity is analyzed as a mediator between human resources and sustainable product innovation performance. In this way, it is easier for SMEs to detect on which aspects of HR they should place greater emphasis for sustainable product innovation performance (PIP), with the purpose of reducing the ones associated with the Covid-19 crisis and obtaining a sustainable world. Information was obtained through an online questionnaire involving a sample of 245 certified innovative Spanish SMEs. The results support major findings: (a) knowledge, (b) motivation, and (c) relationships have a positive impact on creativity; (d) the three models hold that creativity fully mediates human resources and sustainable product innovation performance. The paper contributes to the literature on the human resources and sustainable product innovation performance by adopting a multidisciplinary approach, as well as by analyzing variables on two levels, measuring the most internal aspects of employees (wishes, emotions, ideas, or feelings), and explaining the mediating role of employee creativity.

Social Media Adoption and Financial Sustainability: Learned Lessons from Developing Countries

Social Media (SM) is considered one of the most discussed topics in today’s business environment, mostly because of the recent developments and improvements in computer and ICT (Information and Communications Technology) technologies. However, very little is known about Social Media’s (SM) role in creating Small and Medium-sized Enterprises’ (SMEs’) financial sustainability. Drawing upon the Technology Organisational and Environmental (TOE) framework, the authors constructed a comprehensive model that examined the role of different factors in the adoption of SM by SMEs in developing countries (using Pakistan as an example). Using a questionnaire survey of 383 owners/managers of SMEs in Pakistan, the research findings determined the different factors (i.e., organisational, technological, and environmental), which can impact the adoption of SM by SMEs. In line with previous research studies, the results of structural equation modelling show that technological factors such as perceived benefits of SM, compatibility of SM, cost, and trust have a substantial effect on SMEs’ SM adoption. Similarly, both organisational factors: top management support and technological competence, are strong predictors of SM adoption in SMEs. Finally, environmental factors (i.e., competitor pressure, customer pressure, and information intensity) positively impacted SM adoption by SMEs. The effect of SM adoption on SMEs’ financial sustainability was also tested and found to be positive and significant. Several theoretical and practical implications for owners/managers and other stakeholders regarding SM’s successful implementation by SMEs are highlighted within the paper.

Knowledge management processes, innovation capability and organizational performance

Purpose

The purpose of this study is to introduce a unified framework which integrates knowledge management processes (knowledge creation, sharing, storage and documentation and acquisition), innovation capability (product, process, marketing and organizational and organizational performance (operational, financial and product quality). Then empirically test the effect of knowledge management processes (KMP) on innovation capability (IC), the effect of IC on organizational performance (OP) and the impact of KMP on OP through the mediator (IC).

Design/methodology/approach

A questionnaire was designed and addressed to the general managers of the Jordanian companies making up the target population. Statistical techniques employed included confirmatory factor analysis and structural equation modeling (SEM) using AMOS 24 to test the hypotheses.

Findings

The results show that KMP influences IC, IC affects OP and KMP impacts OP through the mediator (IC).

Research limitations/implications

The use of longitudinal data and comparisons with this study would provide further insights that would assist in generalizing knowledge related to the relationships among KMP, IC and Os' P.

Practical implications

If organizations fully comprehend KMP and IC, they would be able to implement them successfully, creating value for their companies and improving OP.

Originality/value

The existing research on KMP and IC is primarily conceptual and descriptive in nature, and empirical research confirming the real impact of KMP when developing IC is lacking. Also. the relationship between innovation capabilities and OP has not been adequately studied. Hence, this study introduces a conceptual framework which integrates KMP, IC and OP and simultaneously empirically tests the relationships among them.

Effect of entrepreneurial orientation on radical innovation performance among manufacturing SMEs: the mediating role of absorptive capacity

Purpose

The study explored the mediating role of potential and realized absorptive capacities in the relationship between entrepreneurial orientation and radical innovation performance among manufacturing small and medium-sized enterprises (SMEs).

Design/methodology/approach

Empirical analysis was based on 357 manufacturing SMEs in Ghana. Various validity and reliability checks were conducted before the presentation of the actual analysis, which was conducted using ordinary least squares approach, run using SPSS (v. 20).

Findings

Findings revealed that potential and realized absorptive capacities significantly mediated the relationship between entrepreneurial orientation and radical innovation performance among manufacturing SMEs. Further, it was identified that ambidexterity in absorptive capacity also had a greater effect on radical innovation performance among manufacturing SMEs.

Research limitations/implications

Since the data used were cross-sectional, the relationships measured represent only a snapshot of time. Longitudinal studies could therefore be adopted in the future to complement the cross-sectional conducted.

Practical implications

While managers of manufacturing SMEs seek to achieve higher radical innovation performance through entrepreneurial orientation, it should also be noted that both potential and realized absorptive capacities have a significant role to play in this relationship. Managers must therefore also seek to invest time to build both potential and realized absorptive capacities, as they define greater innovation success.

Originality/value

Some past studies have considered absorptive capacity as composite variable, therefore added both potential and realized absorptive capacities to form a single variable. Others also presented potential and realized absorptive capacities individually. This current study extends the body of knowledge by presenting an ambidexterity position between potential and realized absorptive capacities.

Supporting SMEs’ internationalisation through a deeper understanding of human and technology barriers

Purpose

The purpose of this paper is to investigate small- and medium-sized enterprises’ (SMEs) internationalisation from an emerging market perspective. It explores and applies human resource management (HRM) processes to small businesses’ internationalisation efforts in order to ascertain the extent to which human- and technology-oriented barriers to internationalisation can be better understood and their processes better managed by SMEs.

Design/methodology/approach

The data collection and analysis involved a mixed method technique so as to identify the two dominant barriers faced by SMEs at the employer and employee levels. By using primary survey data obtained from 212 Bangladeshi SMEs, a partial least square based structural equation model was successfully validated and its development enhanced the comparison of processes involved in managing people and technology-type barriers.

Findings

The research results highlight the importance of HRM processes in the proper management of both human and technology-type barriers, which are equally as significant to SMEs’ internationalisation.

Practical implications

The results highlight the urgent need for governments in emerging economies to prioritise SMEs’ internationalisation and to dedicate resources and processes in order to effectively optimise economic and social dividends. The practical, theoretical and methodological implications of the paper raise opportunities for further research in SMEs’ internationalisation and people management processes and practices as well as new policy guidelines.

Originality/value

The examination of the link between humans and technology is a much under-represented area in developing countries and the actual contribution of effective HRM processes in the context of SMEs’ internationalisation is missing. Applying HRM processes to these aspects serves to deepen the knowledge of small businesses’ internationalisation efforts and the contributed model enhances professional practice and theory development in these disciplines and in emerging economies.

Organisational learning in small and medium sized South African energy project organisations

Purpose

The purpose of this paper is to explore, using fine-grained exploratory multi-case studies, organisational learning practices – and associated constraints – impacting the performance of four small- and medium-sized project organisations which deliver energy efficiency projects in South Africa and whose learning practice mixes are of wider significance for the emerging project society in the region.

Design/methodology/approach

The unit of analysis is the Energy Efficiency Demand Side Management (EEDSM) programme; a US$104m grant funded the initiative directed at supporting energy efficient retro-fit projects across local municipalities in South Africa. Thematic analysis is undertaken, based on multiple exploratory interviews with project practitioners working for small- and medium-sized EEDSM project organisations.

Findings

Recognising the criticality of tacit knowledge as a focus for learning, within unstructured, novel, non-routine and technically specialised learning contexts in particular, the widespread lack of organisational harnessing through linkages to strategy and performance are noted, and advocacy is offered for the development of appropriate learning cultures linked to communities of practice that bring specialists together from across regional project societies.

Research limitations/implications

The socio-political context of the EEDSM programme, although briefly addressed for its organisational cultural implications, was not given detailed consideration in the exploratory interviews. This would have enhanced the idiographic complexity of the findings, while also reducing prospects for distilling generalisable organisational learning improvement opportunities for emerging project societies. However, the study does not seek to provide evidence for specific learning practice effects on performance as this was not something the interviewees felt able to comment on in significant detail.

Originality/value

Learning practice studies for small- and medium-sized project organisations remains sparse, so are studies of business environments within developing countries, in general, or sub-Saharan Africa, in particular. Looking beyond narrow individual project views of performance, the present study’s project society-based business environment is theorised as both constraining and benefiting from the project-learning practices discussed by the respondents.

Resource Integration, Reconfiguration, and Sustainable Competitive Advantages: The Differences between Traditional and Emerging Industries

Emerging industries bear great difference from traditional industries. It is valuable to explore the effectiveness of different resource management methods in the two industries. Based on this, the purposes of this paper are first to define and distinguish two core resource management methods (i.e., resource integration and resource reconfiguration), and second to research the different impact paths of resource integration and resource reconfiguration on the sustainable competitive advantages in different industries. Primarily, in order to achieve these purposes, this paper explores the generation path of resource integration and resource reconfiguration from the perspective of organizational learning; secondly, the empirical analysis method is applied to examine the different influences between resource integration and resource reconfiguration on sustainable competitive advantages. Based on 208 samples in traditional industries and 220 samples in emerging industries, the results show that resource integration and resource reconfiguration are the consequence of organizational learning. In traditional industries, resource integration and resource reconfiguration have a positive impact on sustainable competitive advantages, respectively, resulting in a “concerto effect” on sustainable competitive advantages. While, in emerging industries, though resource integration has a positive impact on sustainable competitive advantages, however, there is an inverted U-shaped relationship between resource reconfiguration and sustainable competitive advantages. In such a situation, the “concerto effect” disappeared. This paper not only reveals the uniqueness of different resource management methods in different industries but also enriches the applications of resource management theories in different situations.

SME Knowledge Commercialization Through Public Sector Partnerships

Collaborating with public research organizations (PROs) helps SMEs acquire the knowledge and skills they need to successfully innovate. But do they also help SMEs reduce their exposure to involuntary knowledge misappropriation and legitimacy deficits? Building from transaction economics and population ecology theories, we hypothesize that innovative SMEs collaborate with PROs to not only co-develop knowledge, but also to mitigate the risk that knowledge will be misappropriated from larger firms as well as to build overall organizational legitimacy. Binary and ordinal regression analyses using the EIM Technology Panel including 779 innovative SMEs in the Netherlands reveal that some of the variations in SME innovation partnership behavior may indeed be explained by efforts to avoid knowledge misappropriation and gain endorsements and affiliation with highly legitimate PROs.

From Potential Absorptive Capacity to Knowledge Creation in Organisations: The Mediating Role of Knowledge Storage and Realised Absorptive Capacity

The present research explores the role of knowledge storage and documentation and realised absorptive capacity as mediating variables between potential absorptive capacity and internal knowledge creation. The theoretical model is developed and further tested with a sample of 111 organisations from multiple industry sectors. The results show that the technology-driven process of knowledge storage and documentation, as well as the realised absorptive capacity of the respondent companies, reinforces the human-driven process of internal knowledge creation, and mediates, individually and jointly, the relationship between potential absorptive capacity and intra-firm knowledge creation. Mediation analysis relies on the use of bootstrapping confidence intervals. The authors draw practical implications for organisational psychologists and human resources managers. The small sample size and the cross-sectional design limit the generalisation of the present findings. Further research should explore the complementarity of absorptive capacity phases with other knowledge management processes that could enable the creation of new knowledge in organisations.

A counting multidimensional innovation index for SMEs

Purpose

The purpose of this paper is to develop a multidimensional innovation index (MII) framework for measuring and benchmarking multidimensional innovation of small and medium enterprises (SMEs) and groups of SMEs.

Design/methodology/approach

A counting dual cut-off method is employed. First, output and input innovation profiles and composite scores of individual SMEs are computed. Second, a set of four composite innovation indices are generated characterizing the group of SMEs under analysis: MIIo and MIIi measure multidimensional output and input innovation, respectively; while MIIr and MIIa assess the ratio and average of MIIo and MIIi, respectively. To test the MII framework, a survey was conducted among SMEs of the metalworking industry in Portugal.

Findings

In 2012, about 28.9 percent (42.2 percent) SMEs of the Portuguese metalworking industry were determined to be multidimensional output (input) innovative. The average percentage of dimensions for which output (input) innovative SMEs were innovative was 65.0 percent (66.0 percent). Thus, the industry MII vector was (MIIo; MIIi; MIIr; MIIa)=(0.188, 0.279, 0.674; 0.233). Significant differences were found across the industry, individual SMEs’ multidimensional output and input innovation scores, enabling the identification of groups of SMEs, which can be characterized and compared by computing the corresponding and specific MII vectors.

Research limitations/implications

The research has limitations because of the small size of the sample and the benchmarking possibilities it provides.

Originality/value

The novelty of the MII framework lies in the counting dual cut-off method employed.

ORGANISATIONAL FACTORS, ANTICIPATED RENTS AND COMMERCIALISATION IN SMEs

The study investigates the relationship between organisational factors and the anticipated returns to the commercialisation of an innovation within small to medium enterprises (SMEs). Using a large multi-country sample, the analysis involved a structural equation model of seven organisational factors associated with the management of innovation, and their relationship with the anticipated volume of sales, profitability and lifecycle of the innovation. Significant relationships were found between the possession of an innovation strategy and formal commercialisation management, and optimism over sales volumes and lifecycle. The study provides new insights into the resource-based view and theory of entrepreneurial rents, strengthening SME owner-managers’ assessment on future investments in innovation and how to utilise their best capabilities. Policy makers also gain more insights into the commercialisation process within SMEs to foster the innovation orientation in both high and low tech sectors.

Key knowledge management processes for innovation: a systematic literature review

Purpose

The purpose of this paper is to review current literature on knowledge management processes considering the relationship between the key knowledge processes of acquisition, sharing, storage, codification, creation, application and different types of innovation, through a systematic literature review.

Design/methodology/approach

This study follows systematic review protocols for management and organisational sciences and analyses 45 full papers on knowledge management processes and innovation.

Findings

Results not only show that all knowledge processes can directly support innovation but also that other organisational variables (e.g. organisational learning, absorptive capacity) mediate this relationship. Moreover, knowledge creation and knowledge application appear as two central processes through which knowledge acquisition, sharing, codification and storage influence innovation. Knowledge acquisition and knowledge sharing are the most frequently studied knowledge processes. The majority of the sample papers present traditional innovation definitions (product vs process, radical vs incremental and technical vs administrative). However, organisational innovation, innovation capability and innovation performance approaches emerge from the papers’ analysis.

Research limitations/implications

The present review includes major scientific papers; however, the search is limited to the Web of ScienceTM platform.

Originality/value

This literature review analyses high-quality, peer-reviewed papers, following a systematic methodology that can be tested and updated. Papers were divided based upon the knowledge process(es) being analysed and the innovation type/approach, providing a twofold contribution to knowledge management and innovation literature.