The relationship between innovation promotion processes and small business success: the role of managers’ dominance

Abstract

Many studies on small businesses have pointed to the central role of the manager and to his/her status as centralized pivot for knowledge transfer and decision-making, encompassing the spheres of strategy and resource management. The present study is concerned with an issue that, to date, has received little scholarly attention: the level of manager dominance in processes of innovation promotion, and the impact of that dominance on business innovation and growth. Manager dominance levels in innovation management are assessed in terms of dominance in implementing internal processes of collaboration and knowledge transfer, and in creating an organizational culture that promotes innovation, as well as in terms of manager involvement in the business’s processes of engagement with external entities through the utilization of open innovation tools. The empirical study encompassed a sample of 202 small businesses in various industry sectors. The research methodology was a structured, face-to-face interview conducted with the business manager. The study findings indicate, as expected, that manager dominance in innovation promotion processes is exceedingly high. However, contrary to expectations, it was found that manager dominance level has no effect on the business’s level of innovation for any of the four innovation types—product, process, marketing, and organization—or on the business’s growth rate. These findings may indicate that small business managers have not adjusted their managerial practices to reflect market changes in which innovation is becoming the leading factor in success and growth. They appear to view innovation activity as part of their managerial tasks and they maintain their dominance as in the past, when small businesses focused mainly on achieving operational efficiency. High managerial dominance appears not to guarantee success; in order to promote innovation in small businesses and ensure their growth, other factors are needed.