Emanating the key factors of innovation performance: leveraging on the innovation culture among SMEs in Malaysia

Abstract

PurposeInnovation has become an approach to create value for the customer to remain competitive in the market. However, previous research on innovation performance particularly among Bumiputera small and medium-sized enterprises (SMEs) had received little intention. Hence, Bumiputera SMEs need to inculcate the innovation culture to generate innovation performance. As such, the purpose of this study is to examine the ambidextrous orientation and innovation strategy on innovation culture, and how innovation culture could mediate the relationship between ambidextrous orientation and innovation strategy and innovation performance. In addition, this study also examines the role of government support as the moderator between innovation culture and innovation performance.Design/methodology/approachData were collected from 140 Bumiputera SMEs and analyzed using partial least square-structural equation modeling via Smart PLS.FindingsFindings indicated that ambidextrous orientation (alignment and adaptability) and innovation strategy (proactive creativity strategy and growth risk orientation strategy) had a significant impact on innovation culture. Besides, innovation culture mediated the relationship between alignment, proactive creativity strategy, growth risk orientation strategy and innovation performance. Surprisingly, innovation culture does not significantly mediate the relationship between adaptability and innovation performance. However, government support plays an important role to support innovation culture and innovation performance in Bumiputera SMEs.Originality/valueThis study makes both theoretical and practical contributions, especially in identifying the significant role of Bumiputera SMEs in creating an innovation culture. Besides, it explained government support as an important role in strengthening the relationship between innovation culture and innovation performance. The findings of the study will provide great help to Bumiputera entrepreneurs in formulating innovation culture in Malaysian SMEs.