The present study examines the effects of organisational learning and work environment on the formation of employees' innovative work behaviour. A stratified sampling technique was used for the sample of employees at micro and small-scale manufacturing enterprises located in selected cities of the East Coast Economic Region, Peninsular Malaysia. The authors' analysis revealed innovative work behaviour of micro and small manufacturing enterprises at a moderate level. Moreover, the innovative work behaviour at micro-enterprises is significantly lower than small enterprises. The innovation outputs are made up of employees with high innovative work behaviour. Overall, statistical evidence indicated that organisational learning and work environment have a significant influence on the formation of innovative work behaviour. Thus, the micro-small-sized enterprises should raise their employees' innovative work behaviour in order to improve the performance of organisational innovation and competitiveness. Empirical evidence has shown that employees' engagement in innovation is an effective resource for micro-small-sized enterprises to be more innovative.