Linking Innovativeness and Business Performance: A Study of Malaysian Technology-Based SMEs
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Published:
2018-08-12
Keywords:
Innovativeness, Business Performance, Technology-based SMEs, Small and Medium Enterprises
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Abstract
One of the most crucial sources of sustainable business in this increasing changing environment is innovation. Innovation leads to improvement of product, services and process and at the same time it allows firms to survive, grows and gets more profits than non-innovators with continuous advancement. This study aims to determine the innovativeness of technology-based SMEs and to investigate the relationships between innovativeness and business performance. This study adopts a quantitative method where the respondents were the owners/ top managers of technology-based SMEs in Malaysia. Results from quantitative study indicate that technology-based SMEs in Malaysia are innovative and innovativeness has significant and positive impact towards business performance. This study would add to the body of knowledge by examining innovativeness in technology-based SMEs.
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Research Article
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How to Cite
Linking Innovativeness and Business Performance: A Study of Malaysian Technology-Based SMEs. (2018). Journal of Management Info, 5(1), 13-16. https://doi.org/10.31580/jmi.v5i1.78
References
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Arap Bor, G.K. (2018). The Influence Of Entrepreneurial Innovativeness On Firm Performance Among Small And Medium-Sized Enterprises In Kenya. International Journal of Small Business and Entrepreneurship Research, 6 (1), 15-30.
Arshad, A.S. (2016). Leadership Styles, Entrepreneurial Orientation and Business Performance Of Technology-based Small Medium Enterprises In Malaysia. Doctor of Philosophy (Management), Universiti Teknologi Malaysia (UTM), Malaysia
Baker, W.E and Sinkula, J.M. (2009). The Complementary Effects of Market Orientation and Entrepreneurial Orientation on Profitability in Small Businesses. Journal of Small Business Management, 47(4), 443-464.
Bhide, A. (1999). The Origin and Evolution of New Businesses. Oxford University Press.
Brush, C.G. and Vanderwerf, P.A. (1992). A Comparison of Methods and Sources for Obtaining Estimates of New Venture Performance. Journal of Business Venturing, 7, 157-170.
Carayannis, E.G. and Provance, M. (2008). Measuring Firm Innovativeness: Towards a Composite Innovation Index built on firm innovative posture, propensity and performance attributes. International Journal of Innovation and Regional Development, 1(1), 90-107
Che Senik, Z. (2010). Models, Processes and Factors Influencing Internationalization: The Case of Malaysian SMEs. Doctor of Philosophy, Murdoch University, Perth Australia.
Chelliah, S., Sulaiman, M. and Pandian, S. (2010). The Determinants of Internationalization of Small and Medium Enterprises (SMEs): A Case in Malaysia. World Applied Sciences Journal, 10 (10), 1202-1215.
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Fiates, G.G.S., Fiates, J.E.A.A., Serra, F.A.R. and Ferreira, M.P. (2010). Innovation Environment in Small Technology-Based Companies. Journal of Technology Management & Innovation, 5 (3), 81-95.
Forsman, H. and Temel, S. (2011). Innovation and business performance in small enterprises: an enterprise-level analysis. International Journal of Innovation Management, 15(03), 641-665.
Gamal, D., Salah, E.T. and Elrayyes, E. N. (2011). How to measure organization Innovativeness. Technology Innovation and Entrepreneurship Center.
Gibson, C.B. and Birkinshaw, J. (2004) The Antecedents, Consequences, and Mediating Role of Organizational Ambidexterity. Academy of Management Journal, 47, 209-226.
Grande, J., Madsen, E.L. and Borch, O.J. (2011). The Relationship between Resources, Entrepreneurial Orientation and Performance in Farm-based Ventures. Entrepreneurship and Regional Development, 23(3-4), 89-11.
GumusluoÄŸlu, L. and Ilsev, A. (2009). Transformational Leadership and Organizational Innovation: The Roles of Internal and External Support for Innovation. Journal of Product Innovation Management, 26(3), 264-277.
Hajar, I.(2015). The Effect of Business Strategy on Innovation and Firm Performance in Small industrial Sector. The International Journal of Engineering and Science (IJES), 4(2), 1-9.
Hashim, H. (2015). SME Development Framework: The Malaysian Case. Paper presented at Cairo AMC-CBE-WBG SME Conference, 14 - 15 January 2015.
Hassim, A.A., Nizam, A., Talib, A. and Bakar, A.R.A. (2011). The effects of entrepreneurial orientation on firm organisational innovation and market orientation towards firm business performance. International Proceedings of Economics Development & Research, 10, 280-284.
Hoveskog, M. (2011). Innovation-related Activities in a Low-tech Industry: A Study of the Electroplating and Surface Treatment Industry in Sweden. Research on Technology, Innovation and Marketing Management 2009â€2011: Introducing the Research Area of Innovation Science.
Hult, G.T.M., Hurley, R.F. and Knight, G.A. (2004). Innovativeness: Its antecedents and impact on business performance. Industrial Marketing Management, 33(5), 429-438.
Kayadibi, S., Polat, R. and Fidan, Y. (2013). Small and medium-sized business in Malaysian economy: Case of Turkish entrepreneurs in Kuala Lumpur. WBI Conference Proceedings, 1-20.
Kuswantoro. (2012). Impact of Distribution Channel Innovation on the Performance of Small and Medium Entreprises. International Business and Management, 15, 50-60
Lee, J. (1987). A Comparative Study of the Relationship between Strategy and Business Performance: Industrialised Countries and Newly-industrialising Countries. Doctor of Philosophy, University of Mississippi, Mississippi.
Lindelöf, P. and Löfsten, H. (2006). Environmental Hostility and Firm Behavior - An Empirical Examination of New Technology-based Firms on Science Parks. Journal of Small Business Management, 44(3), 386-406.
Lumpkin, G.T. and Dess, G.G. (1996). Clarify the EO Construct and Linking it to Performance. Academy of Management Review, 2(1), 135-172.
Lumpkin, G.T., Cogliser, C.C. and Schneider, D.R. (2009). Understanding and Measuring Autonomy: An Entrepreneurial Orientation Perspective. Entrepreneurship Theory and Practice, 33, 47–69.
Muller, A., Valikangas, L. and Merlyn, P. (2005). Metrics for Innovation: Guidelines for Developing a Customized Suite of Innovation Metrics. Strategy & Leadership, 33(1), 37-45.
Murphy, G.B., Trailer, J.W. and Hill, R.C. (1996). Measuring Performance in Entrepreneurship Research. Journal of Business Research, 36, 15-23.
OECD (2005). The Measurement of Scientific and Technological Activities - Proposed Guidelines for Collecting and Interpreting Technological Innovation Data. Oslo Manual, Paris.
Pallant, J. (2007). SPSS survival manual: A step-by-step guide to data analysis using SPSS for Windows (Version 15). Open University PRESS.
Parida, V., Westerberg, M. and Frishammar, J. (2012). Inbound Open Innovation Activities in High-Tech SMEs: The Impact on Innovation Performance. Journal of Small Business Management, 50(2), 283–309.
Pérez-Luño, A., Wiklund, J. and Cabrera, R.V. (2011). The dual nature of innovation activity: How entrepreneurial orientation influences innovation generation and adoption. Journal of Business Venturing, 26, 555-571.
Pesämaa, O., Shoham, A., Wincent, J. and Ruvi, A.A. (2013). How A Learning Orientation Affects Drivers of Innovativeness and Performance in Service Delivery. Journal of Engineering and Technology Management, 30(2), 169-187.
Razak R.A. (2011). Entrepreneurial Orientation as a Universal Remedy for the Receding Productivity in Malaysian Small and Medium Enterprises: A Theoretical Perspective. International Journal of Business and Social Science, 2(19), Special Issue – October.
Sáez-MartÃnez, F.J., DÃaz-GarcÃa, C. and González-Moreno, A. (2014). Environmental Orientation as a Determinant of Innovation Performance in Young SMEs. International Journal Environment Res., 8(3), 635-642.
Thornhill, S. (2006). Knowledge, Innovation and Firm Performance In High-and Low-Technology Regimes. Journal of Business Venturing, 21(5), 687-703.
Wolf, J. A., & Pett, T. L. (2006). Small-firm performance: Modeling the role of product and process improvements. Journal of Small Business Management, 44(2), 268-284.
Yang, C.W. (2008). The relationships among leadership styles, entrepreneurial orientation, and business performance. Managing Global Transitions, 6(3), 257-275.
Yusuf, A. (2002). Environmental Uncertainty, the Entrepreneurial Orientation of Business Ventures and Performance. International Journal of Commerce and Management, 12(3-4), 83-103.
Ahuja, G. and Lampert, C.M. (2001). Entrepreneurship in the Large Corporation: A Longitudinal Study of How Established Firms Create Breakthrough Inventions. Strategic Management Journal, 22, 521-543.
Ambad, S., & Wahab, K. A. (2013). Entrepreneurial Orientation among Large Firms in Malaysia: Contingent Effects of Hostile Environments. International Journal of Business and Social Science, 4(16), 96-107.
Arap Bor, G.K. (2018). The Influence Of Entrepreneurial Innovativeness On Firm Performance Among Small And Medium-Sized Enterprises In Kenya. International Journal of Small Business and Entrepreneurship Research, 6 (1), 15-30.
Arshad, A.S. (2016). Leadership Styles, Entrepreneurial Orientation and Business Performance Of Technology-based Small Medium Enterprises In Malaysia. Doctor of Philosophy (Management), Universiti Teknologi Malaysia (UTM), Malaysia
Baker, W.E and Sinkula, J.M. (2009). The Complementary Effects of Market Orientation and Entrepreneurial Orientation on Profitability in Small Businesses. Journal of Small Business Management, 47(4), 443-464.
Bhide, A. (1999). The Origin and Evolution of New Businesses. Oxford University Press.
Brush, C.G. and Vanderwerf, P.A. (1992). A Comparison of Methods and Sources for Obtaining Estimates of New Venture Performance. Journal of Business Venturing, 7, 157-170.
Carayannis, E.G. and Provance, M. (2008). Measuring Firm Innovativeness: Towards a Composite Innovation Index built on firm innovative posture, propensity and performance attributes. International Journal of Innovation and Regional Development, 1(1), 90-107
Che Senik, Z. (2010). Models, Processes and Factors Influencing Internationalization: The Case of Malaysian SMEs. Doctor of Philosophy, Murdoch University, Perth Australia.
Chelliah, S., Sulaiman, M. and Pandian, S. (2010). The Determinants of Internationalization of Small and Medium Enterprises (SMEs): A Case in Malaysia. World Applied Sciences Journal, 10 (10), 1202-1215.
Drucker, P. (1999). Financial Services: Innovate or Die, The Economist, September 25th, 27-34.
European Commission (2013). State of the Innovation Union 2012. Accelerating change. European Commission, Directorate General for Research and Innovation, Brussels,
European Commission (2015). Innovation Union Scoreboard 2015, available at: http://ec.europa.eu/growth/industry/innovation/facts-figures/scoreboards/index_en.htm
Fauzan, M.I.R., Yuniaristanto, Hisjam, M., Rasli, A. (2017). Assessment of University Spin-Off Company Competitiveness Based on Products Performance and Expert Opinion: A Case Study on Bioproduct Based Spin-Off Company. Advanced Science Letter, 23 (9), 8737–8740
Fiates, G.G.S., Fiates, J.E.A.A., Serra, F.A.R. and Ferreira, M.P. (2010). Innovation Environment in Small Technology-Based Companies. Journal of Technology Management & Innovation, 5 (3), 81-95.
Forsman, H. and Temel, S. (2011). Innovation and business performance in small enterprises: an enterprise-level analysis. International Journal of Innovation Management, 15(03), 641-665.
Gamal, D., Salah, E.T. and Elrayyes, E. N. (2011). How to measure organization Innovativeness. Technology Innovation and Entrepreneurship Center.
Gibson, C.B. and Birkinshaw, J. (2004) The Antecedents, Consequences, and Mediating Role of Organizational Ambidexterity. Academy of Management Journal, 47, 209-226.
Grande, J., Madsen, E.L. and Borch, O.J. (2011). The Relationship between Resources, Entrepreneurial Orientation and Performance in Farm-based Ventures. Entrepreneurship and Regional Development, 23(3-4), 89-11.
GumusluoÄŸlu, L. and Ilsev, A. (2009). Transformational Leadership and Organizational Innovation: The Roles of Internal and External Support for Innovation. Journal of Product Innovation Management, 26(3), 264-277.
Hajar, I.(2015). The Effect of Business Strategy on Innovation and Firm Performance in Small industrial Sector. The International Journal of Engineering and Science (IJES), 4(2), 1-9.
Hashim, H. (2015). SME Development Framework: The Malaysian Case. Paper presented at Cairo AMC-CBE-WBG SME Conference, 14 - 15 January 2015.
Hassim, A.A., Nizam, A., Talib, A. and Bakar, A.R.A. (2011). The effects of entrepreneurial orientation on firm organisational innovation and market orientation towards firm business performance. International Proceedings of Economics Development & Research, 10, 280-284.
Hoveskog, M. (2011). Innovation-related Activities in a Low-tech Industry: A Study of the Electroplating and Surface Treatment Industry in Sweden. Research on Technology, Innovation and Marketing Management 2009â€2011: Introducing the Research Area of Innovation Science.
Hult, G.T.M., Hurley, R.F. and Knight, G.A. (2004). Innovativeness: Its antecedents and impact on business performance. Industrial Marketing Management, 33(5), 429-438.
Kayadibi, S., Polat, R. and Fidan, Y. (2013). Small and medium-sized business in Malaysian economy: Case of Turkish entrepreneurs in Kuala Lumpur. WBI Conference Proceedings, 1-20.
Kuswantoro. (2012). Impact of Distribution Channel Innovation on the Performance of Small and Medium Entreprises. International Business and Management, 15, 50-60
Lee, J. (1987). A Comparative Study of the Relationship between Strategy and Business Performance: Industrialised Countries and Newly-industrialising Countries. Doctor of Philosophy, University of Mississippi, Mississippi.
Lindelöf, P. and Löfsten, H. (2006). Environmental Hostility and Firm Behavior - An Empirical Examination of New Technology-based Firms on Science Parks. Journal of Small Business Management, 44(3), 386-406.
Lumpkin, G.T. and Dess, G.G. (1996). Clarify the EO Construct and Linking it to Performance. Academy of Management Review, 2(1), 135-172.
Lumpkin, G.T., Cogliser, C.C. and Schneider, D.R. (2009). Understanding and Measuring Autonomy: An Entrepreneurial Orientation Perspective. Entrepreneurship Theory and Practice, 33, 47–69.
Muller, A., Valikangas, L. and Merlyn, P. (2005). Metrics for Innovation: Guidelines for Developing a Customized Suite of Innovation Metrics. Strategy & Leadership, 33(1), 37-45.
Murphy, G.B., Trailer, J.W. and Hill, R.C. (1996). Measuring Performance in Entrepreneurship Research. Journal of Business Research, 36, 15-23.
OECD (2005). The Measurement of Scientific and Technological Activities - Proposed Guidelines for Collecting and Interpreting Technological Innovation Data. Oslo Manual, Paris.
Pallant, J. (2007). SPSS survival manual: A step-by-step guide to data analysis using SPSS for Windows (Version 15). Open University PRESS.
Parida, V., Westerberg, M. and Frishammar, J. (2012). Inbound Open Innovation Activities in High-Tech SMEs: The Impact on Innovation Performance. Journal of Small Business Management, 50(2), 283–309.
Pérez-Luño, A., Wiklund, J. and Cabrera, R.V. (2011). The dual nature of innovation activity: How entrepreneurial orientation influences innovation generation and adoption. Journal of Business Venturing, 26, 555-571.
Pesämaa, O., Shoham, A., Wincent, J. and Ruvi, A.A. (2013). How A Learning Orientation Affects Drivers of Innovativeness and Performance in Service Delivery. Journal of Engineering and Technology Management, 30(2), 169-187.
Razak R.A. (2011). Entrepreneurial Orientation as a Universal Remedy for the Receding Productivity in Malaysian Small and Medium Enterprises: A Theoretical Perspective. International Journal of Business and Social Science, 2(19), Special Issue – October.
Sáez-MartÃnez, F.J., DÃaz-GarcÃa, C. and González-Moreno, A. (2014). Environmental Orientation as a Determinant of Innovation Performance in Young SMEs. International Journal Environment Res., 8(3), 635-642.
Thornhill, S. (2006). Knowledge, Innovation and Firm Performance In High-and Low-Technology Regimes. Journal of Business Venturing, 21(5), 687-703.
Wolf, J. A., & Pett, T. L. (2006). Small-firm performance: Modeling the role of product and process improvements. Journal of Small Business Management, 44(2), 268-284.
Yang, C.W. (2008). The relationships among leadership styles, entrepreneurial orientation, and business performance. Managing Global Transitions, 6(3), 257-275.
Yusuf, A. (2002). Environmental Uncertainty, the Entrepreneurial Orientation of Business Ventures and Performance. International Journal of Commerce and Management, 12(3-4), 83-103.