THE IMPACT OF ENVIRONMENTAL UNCERTAINTY DIMENSIONS ON ORGANISATIONAL INNOVATIVENESS: AN EMPIRICAL STUDY ON SMEs

Abstract

The purpose of this study is to examine the effects of factors of environmental uncertainty on the innovativeness of small and medium enterprises (SMEs). Innovativeness is widely accepted as an important characteristic for firm competitiveness and it has been studied by both researchers as well as business managers. Environmental uncertainty is a measure of the complexity of changing external forces faced by an organisation and it crucially impacts the responses of organisations in order to stay competitive. Based on approaches in existing literature, this study conceptualises environmental uncertainty comprised three separate dimensions — competitive intensity, market/demand turbulence, technological turbulence. Data for the study were collected from 156 SMEs in Turkey. SMEs are regarded as an important ingredient in the economic growth of nations and especially so in developing nations such as Turkey. The findings of the study reveal that market/demand turbulence and technological turbulence have a positive effect on the innovativeness of SMEs. Interestingly and contrary to popular belief, competitive intensity was not found to have significant effect on an SME's innovativeness. The implication of the results from this research is that the degree of organisational innovativeness for SMEs tends to increase and therefore should be supported in environments with greater technological and market/demand turbulence. This research makes an important contribution to the developing body of innovation literature and provides directions for managers and researchers in influencing innovativeness of firms.

The Impact of Environmental Turbulence on the Perceived Importance of Innovation and Innovativeness in SMEs

“…While the extant literature suggests that customers are stronger drivers of innovation among SMEs than among large firms (Prajogo and McDermott ), the recent Innobarometer 2016 shows that larger firms are more likely to respond to customer requests than smaller firms (European Commission ). There is empirical evidence that market turbulence positively affects SMEs’ innovation activities (Freel ; Prajogo and McDermott ; Uzkurt et al ). On the contrary, in their meta‐analysis, Calantone, Harmancioglu, and Droge () conclude that market turbulence is overall not a direct antecedent to innovation.…”

“…In addition, there are mixed findings regarding the influence of environmental turbulence on innovativeness. For example, though Prajogo and McDermott () and Uzkurt et al () find support for the positive effect of market turbulence on innovative activities, Calantone, Harmancioglu, and Droge () based on a meta‐analysis state the opposite. More studies are therefore needed in this area to confirm the significance of this relationship.…”

Uncertainty and adaptation in the context of Brexit

“…A review of reports on the suggested effects of Brexit and its implications for the wine industry (Anderson and Wittwer, 2017b;Crabb, 2016), as well as research focusing on firm adaptation to uncertainty (Laine and Galkina, 2017;Martin-Tapia et al, 2008;Uzkurt et al, 2012) provided the foundation in designing these questions. The interviews included additional questions that sought to learn demographic characteristics of participants and their firms, including participants' role, years of experience, whether the firm exported, and its size (Table 2) (Table 2); indeed, two interviews were undertaking with two winery managers.…”

The Effects of Entrepreneurial Context on Entrepreneurial Cognition

“…On the other hand, entrepreneurs' social capital provides an important channel for their firms' accessing external key resources. The resources that get from social network are more competitive and stronger in quality, relevance and timeliness [16] . Supportive business environment and social network can make the firms more perceive and capture potential business opportunities.…”