The Key Impact of Management Modes for Innovation in SMEs

Abstract

This study assists in obtaining a better knowledge of managerial and organizational factors favoring different types of innovation, highlighting the critical role of creativity, risk-taking, and performance management for operational innovation. Also, this study aims to simultaneously investigate interactions of exploration and exploitation innovation to show how managers and organizations are usually treated in exploration and exploitation innovation. A sample of 755 valid questionnaires from small and mid-size enterprises (SMEs) from diverse firms in the global south were employed and analyzed using the partial least square structural equation model to examine the proposed research model and assumptions. This study shows that creativity, risk-taking, and performance management are positively and significantly affect operational innovation in global south SMEs. From a strategic point of view, our findings demonstrate that SMEs must create innovation in order to maintain their performance. Managers of SMEs would be aware of the influence of various types of innovation on various aspects of business performance, such as marketing, operations, and finance. On a management level, the research findings assist SMEs in achieving high performance levels with their innovation projects. In addition, this research helps readers to develop a better knowledge of how organizations combine operating innovations and exploration.