Abstract
This paper investigates the relationship between internal factors, workforce innovation and performance on entrepreneurial small and medium sized enterprises in Malaysia. The internal factors are transformational leadership, rewards, autonomy and empowerment and innovative supportive climate. An empirical analysis is based on data for 92 small and medium-sized enterprises (SMEs) in Malaysia. The results indicate that workforce innovation and performance is higher in entrepreneurial SMEs with high degree of transformational leadership, rewards, autonomy, empowerment and innovative supportive climate. Furthermore, the findings of this paper support the view that workforce performance of entrepreneurial SMEs will be better if they improve the relationship between transformational leadership and rewards with workplace innovation.
Highlights
1.1 Introduction to the ProblemInnovation and entrepreneurship are complementary of each other (Zhao, 2005)
The results indicate that workforce innovation and performance is higher in entrepreneurial small and medium-sized enterprises (SMEs) with high degree of transformational leadership, rewards, autonomy, empowerment and innovative supportive climate
The lack of correlation between innovative supportive climate and workforce innovation is consistent with that of Gumusluoglu and Ilsev (2009) who found a negative association between internal support climate for innovation and organizational innovation
Summary
Innovation and entrepreneurship are complementary of each other (Zhao, 2005). Both are essential for organizational prosperity and sustainability. Boosting entrepreneur organization through development of workforce innovation is a vital fact that does not happen overnight. Innovation can be changed to a core competency of the organizations when it is visioned by leaders in the organizational environment generally and by employees in their actions individually. Innovation is often performed by low and middle levels of management or employees directly. It is rarely done by leaders or top managers directly (Elenkov & Manev, 2005)
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