Competitor orientation in successful SMEs: an exploration of the impact on innovation

The impact of market orientation on organisational performance has been the subject of many studies illustrating variance with firm size. Although small- to medium-sized enterprises (SMEs) are inherently customer-oriented, research has identified that they have significantly lower levels of competitor orientation than large firms and that competitor orientation is significantly related to organisational performance. In addition, studies have illustrated that SME success is linked to innovative problem solving, new product development and resource optimisation. SMEs are inherently innovative in how they adopt creative approaches to overcome constraints associated with their size. Given that SMEs often neglect to focus on competitors, this study explores the relationship between competitor orientation and organisational performance through an innovation lens. This study uses a qualitative research approach to investigate seven successful SMEs as case studies. The findings indicate that SMEs seeking optimal organisational performance should pay close attention to direct and indirect competitors in order to identify opportunities and build sustainable competitive businesses.     

Organizational innovation outcomes in SMEs: Effects of age,size, and sector

Innovation studies concentrate on factors contributing to innovation. However, governments seek clearer understanding of innovation outcomes in their appraisal of the costs and benefits of policies to promote innovation in small and medium-sized enterprises (SMEs). This study examines organizational innovation (OI) outcomes in SMEs. Based on company interviews and a mail survey, the findings reveal OI results in enhanced productivity, margin, market leadership, and working environments. However, OI does not lead to operational efficiency and employees’ retention. Organizational innovation leads to companies operating outside their core competency but does not have an adverse environmental impact. Organizational innovation has greater impact on small firms. The paper includes practical and theoretical implications.     

Entrepreneurial orientation,entrepreneurial competencies,innovation, and performances in SMEs of Pakistan: Moderating role of social ties

The current study examines the mediating role of innovation and entrepreneurial competencies in entrepreneurial orientation’s relationship with financial, social, and environmental performance. This research also determines the role of social ties in strengthening the association between innovation and entrepreneurial competencies with social, financial, and environmental performance. Using multi-source and time-lagged studies, the data was collected from 297 small and medium-sized enterprises (SMEs) in Pakistan, and structural equation modeling was used to test direct, indirect, and moderating hypotheses. The findings show that entrepreneurial orientation, entrepreneurial competencies, and innovation positively correlate with all the types of performance under investigation and confirm the mediating role of innovation and entrepreneurial competencies. Additionally, social network ties strengthen innovation—financial performance, and entrepreneurial competencies—social performance relationship. This research proposes significant theoretical and managerial implications by determining the impact of entrepreneurial orientation on SMEs in Pakistan.     

Market Orientation, Innovativeness, Product Innovation, and Performance in Small Firms

Most research on market orientation, innovation and performance is related to big enterprises and small and medium-sized enterprises (SMEs). In this study a model is developed to investigate the combined effect of market orientation and innovativeness on product innovation and company performance, for small firms. A specific feature of our research is that we use an objective measure for product innovation in contrast to the self-reported measures commonly used in research on innovation. To test our model data from 152 rose growers were used. This study's results show that the owner's innovativeness permeates all variables in the model and has a positive influence on market orientation, innovation, and performance. An interesting research result is also that customer market intelligence influences product innovation positively or negatively, depending on whether the innovativeness of the owner in the new product domain is weak or strong.     

Internationalization capabilities of SMEs: A comparative study of the manufacturing and industrial service sectors

Nowadays, the global economy requires developed countries to undergo industrial restructuring. In this context, industrial small- and medium-sized enterprises (SMEs) need to collaborate with the service sector to enhance their competitiveness and strategic capabilities. Indeed, industrial service SMEs have been the object of particular attention from governments since these enterprises have become a key element for manufacturing and innovation networks in developed countries. However, these firms, as well as the manufacturing SMEs they serve, now face the challenge to internationalize. This paper addresses the of the strategic capabilities required by SMEs in general, and manufacturing and industrial service SMEs in particular, to internationalize, as well as the effect of these capabilities on their export performance. These strategic capabilities are presented in a research model, which relates human resources (HR), product development capabilities and market development capabilities to export performance. In testing this model with a sample of 347 Canadian and French SMEs, similarities and differences between the two types of SMEs are highlighted.     

SME Internet use and strategic flexibility: the moderating effect of IT market orientation

Abstract

One of the most important topics in the marketing literature has been the concept of market orientation. However, questions remain as to the dynamics of how market orientation translates into intermediate capabilities. This study explores relationships among different types of Internet usage, IT market orientation (the extent to which IT is aligned to manage customer and competitor information and internal activities), and strategic flexibility (firm capability to respond to the need for change). Specifically, use of the Internet for communication with relevant stakeholders, owing to its market-sensing potential, should be positively and significantly related to strategic flexibility for SMEs with more IT market-oriented alignment. The market-sensing potential of Internet communication to impact strategic flexibility positively for SMEs is likely to be lost under low IT market-oriented-alignment conditions. In contrast, IT market orientation should not moderate the relationship between Internet use for transactions with relevant stakeholders and strategic flexibility, given that the typical order taking and processing is a static, routine function for SMEs. Results supported hypothesised relationships. By delineating the type of Internet usage and required IT alignment that contribute to leveraging the Internet effectively, findings hold implications for future research by clarifying boundary conditions for Internet effects. Specifying how and when Internet use promotes strategic flexibility, an important enabler of competitive advantage, helps small business owner/managers better utilise their limited resources.     

As Different as Chalk and Cheese? The Relationship Between Entrepreneurial Orientation and SMEs’ Growth: Evidence from Russia and Finland

The purpose of this study is to investigate the relationship between entrepreneurial orientation (EO) and firm growth and the moderating role of business environment for Russian and Finnish small- and medium-sized enterprises (SMEs). For hypothesis testing, structural equation modeling is applied to the data set of 104 Russian and 117 Finnish privately owned SMEs. Results show that while in the Finnish market context EO dimensions are directly associated with firm growth, in the emerging Russian market the relationship is moderated by the dynamic and hostile environment. The results also provide evidence of the nature of EO for SMEs operating in Russia.     

What drives the export performance of small and medium-sized subcontracting firms? A study of Korean manufacturers

Building on the resource-based view and network theory, we propose and test a framework of export antecedents of subcontracting small and medium-sized enterprises (SMEs). Whereas the internationalization of firms has been extensively studied in general, little is known about what drives the exports of subcontracting SMEs which play a very important role in the manufacturing sectors of East Asian economies. These subcontracting firms operate under very different conditions from other companies, resulting in specific ways they leverage their resources, capabilities and customer networks. An analysis of survey data from 1733 subcontracting SMEs in three South Korean manufacturing industries reveals that the firms’ export orientation and export intensity are related not only to their technological resources and their executives’ managerial capabilities, but also to features of their subcontracting network ties. Our study suggests that due to the specific nature of their business, subcontracting firms’ internationalization antecedents need to be analyzed in the context of their business environment which is strongly shaped by their customer relationships.     

Organizational and competitive influences of exploration and exploitation activities in small firms

This study explores organizational and competitive factors affecting exploration/exploitation activities in SMEs by examining the role of entrepreneurial orientation (EO), market orientation (MO) and perceived competitive intensity. We test the relationships among these variables using data collected from 55 manufacturing SMEs operating in the southern part of U. S. The findings provide a strong support for a positive association between EO, MO and exploration/exploitation activities. Perceived competitive intensity was only a significant moderator for the relationship between MO and the degree of exploratory activities. Our findings, hence, suggest the significant role organizational predictors play in enhancing exploration/exploitation activities in SMEs. Implications for research and practice are discussed.     

Made in Europe: Small Companies

This is the third report on the 'Made in Europe' research programme. Earlier reports concentrated on the maturity of implementation of 'best practice' in both the design and manufacturing processes of larger European companies. Here, the authors shift the focus to small and medium-sized enterprises (SMEs) particularly in Britain and Italy. While few SMEs are in the world-class category, small company practices are customer-oriented, responsiveness-focused and concerned with new products. SMEs' competitive edge typically comes from speed, responsiveness and closeness to customers. SMEs exhibit a greater level of confidence than larger companies in their ability to make change, but neglect training and education. Within the SME sector there are sharp differences between micro (5–20 employees), small (21–50) and medium-sized (51–200) companies while those which are subsidiaries of larger companies have significantly higher levels of best practice. There are differences between countries and regions.     

市场导向、组织学习创新及组织绩效:基于珠江三角洲企业的实证研究

The purpose of this paper is to examine the relationships among market orientation, learning orientation, organizational innovation and organizational performance through a structural equation modeling approach. This study uses a sample of 143 companies in the Pearl River Delta region of China. Results show that (1) market orientation has no positive direct impact on organizational performance; (2) market orientation has a direct impact on learning orientation; (3) learning orientation has a direct impact on administrative and technical innovation; (4) market orientation has a direct impact on organizational innovation by learning orientation; (5) administrative innovation has a positive direct impact on organizational performance while technical innovation does not impact on organizational performance directly; (6) technical innovation has a positive impact on administrative innovation; (7) learning orientation has an indirect impact on organizational performance through influencing organizational innovation; (8) market orientation has impact on learning orientation, which has an impact on organizational innovation, which in turn has an impact on organizational performance. Managerial implications are discussed, along with suggestions for further research. Translated from Guanli Shijie 管理世界 (Management World), 2006, (2): 80–94, 143     

Internationalisation of family small and medium sized enterprises: The role of stewardship orientation,family commitment culture and top management team

The purpose of this paper is to determine how aspects of organisational culture, typical to family businesses, influence internationalisation. Proposing that stewardship orientation, family commitment culture and top management team related factors influence internationalisation; we empirically examine 80 internationalising family SMEs (FSMEs) from the manufacturing sector in Finland. Variance based structural equation modelling (PLS) shows that family commitment culture is negatively associated with the degree of internationalisation. On the other hand strategically flexible top management teams with industry experience in FSMEs are positively associated with the degree of internationalisation. Contributing to an understanding of the internationalisation of family businesses, the findings suggest that family commitment culture and stewardship orientation, often associated with an inward orientation, may operate against internationalisation, however when coupled with the strategic flexibility of the top management team, we found stewardship orientation to positively impact internationalisation suggesting that it provides an outward orientation. Implications for practice are advanced.     

Innovation Capability and Performance Of Manufacturing SMEs: The Paradoxical Effect of IT Integration

In theory, IT integration through applications such as enterprise resource planning, manufacturing resource planning, and electronic data interchange provides an organization with the ability to exploit innovation capabilities. Based on survey data obtained from 309 Canadian manufacturing small and medium-sized enterprises (SMEs), this study aims to identify the enabling effect of IT integration on the innovation capability of manufacturing SMEs—in terms of growth and productivity outcomes—and to verify if this effect is subject to industry influences. While the firm's innovation capability was found, as expected, to be positively related to the growth and productivity of manufacturing SMEs, the results underline paradoxical effects of IT integration in this regard. While IT integration was not seen to enable the innovation capability of manufacturing SMEs in terms of growth, it was seen to have a disabling effect on this same capability with regard to productivity.     

Product Innovation in Small and Large Enterprises

Innovation networks, establishment characteristics and the regional environment are likely to play different roles in product innovation in enterprises of different size. This paper focuses on the influence of the regional environment on the early adoption of micro-electronic components in product development in small and medium-sized enterprises (SMEs) and large enterprises (LEs). Drawing upon existing literature we compare the role of enterprise characteristics, innovation networks and, in particular, the regional environment for an early use of micro-electronic components in product development in SMEs and LEs using a tobit model. Our central hypothesis is that SMEs are more dependent upon their regional environment than LEs for an early adoption. However, this hypothesis is rejected by our empirical results that show that location in a large, dense region has a significant positive effect on product innovation in LEs, while it has a negative but non-significant effect on product innovation in SMEs. Our results imply peripheral regions are able to provide an innovative environment for SMEs, whereas LEs need the richer environment offered by the core regions. The results are also interesting from a policy point of view because they indicate that SMEs can be early users of new technologies even if they are located outside the large urban areas.     

平衡计分卡在我国中小企业中的运用——以ML公司为例

当前,我国经济发展不断加速,信息科技发展较快,企业与企业之间的竞争日渐激烈。像过去那样,依赖竞价手段获得企业成功的案例已经难以见到。当前企业的竞争是综合能力的竞争,涉及诸如品牌、技术、人才、财务、规模、创新等各个方面。因而,过去的基于财务指标的绩效管理体系已经不适用于当前的大多数公司了。面对这样的实际变化,眼界开阔、资本雄厚的大型企业在绩效评价上已经做出了超前的改革。但目前无论在哪个国家,中小企业的数量抑或是对经济增长的推动都高于大型企业。因而,帮助中小企业适应如今的市场竞争模式,为其找到一个良好的绩效管理方式,帮助中小企业良性发展是当前经济发展的重中之重。而面对如此复杂的市场竞争环境,综合多个角度考量的平衡计分卡方法就是解决这一问题的最优解。但是一味地照搬照抄是不现实的,因而本文基于平衡计分卡的应用再结合我国中小企业的实际,分析了当前中小企业运用平衡计分卡的隐患,并提出相应的解决方法,希望为中小企业和平衡计分卡方法“牵线搭桥”。     

Linking inward/outward FDI and exploitation/exploration strategies: Development of a framework for SMEs

The purpose of this paper is to examine the relationships between exploitation/exploration strategy and foreign direct investment (FDI) involving small and medium-sized enterprises (SMEs). Drawing on qualitative data collected from 45 FDI projects reported by 38 SMEs in a small open economy (SMOPEC), we develop an empirically grounded framework and research propositions that suggest inward FDI (into the SME) is associated with exploration driven by a strategic asset-seeking motive, and outward FDI (by the SME) is associated with exploitation driven by market and efficiency-seeking motives. Further, for the SMEs in this study, ambidextrous exploration and exploitation appear complementary and co-occur either simultaneously through an inward FDI project, or sequentially through separate inward and outward FDI projects, respectively. Our findings, however, reveal a lack of clear sequencing between inward and outward FDI, in contrast to previous research that has conceptualised inward FDI as a strategic means to achieve outward FDI. Implications for theory, practice and policy are discussed.     

External environment and the moderating role of export market orientation

This research has two main objectives. The first is to fill the knowledge gap on the role which the external environment plays in the strategic behavior of exporting companies, taking into account the psychological distances between the domestic and foreign markets. The second aim is to clarify the role that market orientation plays in export activity, since the literature review shows conflicting results. The study provides insight into these issues through hypothesis testing of a conceptual model using a sample of 212 Spanish exporting companies. The results lead to two major conclusions: (a) in turbulent environments, exporting firms adapting the marketing mix program to the needs of foreign markets obtain a better export performance in highly competitive and psychologically distant markets; (b) although market orientation has a direct and positive effect on export performance, its main role is to support strategic decision making in exporting companies. In addition, market orientation moderates the relationship between marketing mix adaptation and export performance.     

Strategic Orientation, Management Characteristics, and Performance: A Study of Spanish SMEs

This paper analyzes from a resource-based view the management characteristics of Spanish small and medium enterprises (SMEs) according to their strategic orientation and the consequences in terms of firm performance and business efficiency. The typology of strategies formulated by Miles and Snow has important implications for management, because depending on the strategic orientation adopted—defender, prospector, or analyzer—the firm can emphasize to a great extent some aspects of management, such as technological position, innovation, organizational design, and human resource management. Moreover, these aspects of management can largely determine firm performance and business efficiency. A sample of 1,351 Spanish SMEs provided the data for an empirical test of these issues. The results confirm the expected relationships, revealing, on the one hand, significant differences between prospector and defender SMEs regarding the key factors on which they base their management characteristics and, on the other hand, the different influences that each strategic orientation has on firm performance.     

Strategic agility of SMEs in emerging economies: Antecedents,consequences and boundary conditions

This study investigates the effects of firm-level capabilities, and their relationships with strategic agility and the international performance of small and medium-sized enterprises (SMEs). Using time-lagged data from 233 internationalizing SMEs from Ghana, we test the direct relationships between SMEs’ capabilities and strategic agility. Additionally, we examine the indirect relationships between technological and networking capabilities and superior performance in international markets through the mediating mechanism of strategic agility. We also investigate the moderating effects of environmental dynamism and internationalization knowledge on the relationship between strategic agility and international performance. Our findings provide a nuanced view of the relationship between the firm-level capabilities, strategic agility and SMEs’ international performance.     

Innovation in family and non-family SMEs: an exploratory analysis

This study provides an exploratory analysis of differences between family and non-family firms in innovation investment, product and process innovation outcomes, and labor productivity. Using data from the Community Innovation Survey on 2,087 German small- and medium-sized enterprises (SMEs), we observe significant disparities at each stage of the innovation process. Whereas family SMEs have a higher propensity to invest in innovation at all, conditional on investing in innovation, these companies do so less intensively than their non-family counterparts. Family SMEs further tend to outperform non-family SMEs in terms of process innovation outcomes when controlling for innovation investment. Given the level of product and process innovation, however, family SMEs underperform regarding labor productivity in comparison to non-family SMEs. These findings complement previous empirical research by illustrating how the presence of a dominant family relates to innovation inputs and outputs of SMEs in Europe’s largest economy and its innovative SME sector.