Title: Innovation as the critical capability for business performance of Malaysian manufacturing SMEs

Authors: Noraini Ismail

Addresses: Faculty of Business Management, Universiti Teknologi MARA, 40450 Shah Alam, Selangor, Malaysia

Abstract: There are many factors plaguing the performance of small businesses in general. However, not many studies have been done to ascertain particular capability as important and significant in influencing the business performance of particular industry. Both qualitative and quantitative research approaches were used in the study. Data were gathered from 290 SMEs through a proportionate sampling design from the six top industries representing the manufacturing sector via a nationwide survey. They reportedly admitted to the need of innovation capabilities to drive business performance. Furthermore, both quality system and technical capabilities are more prevalent for manufacturing SMEs in influencing business success compared to other capabilities like finance and management. This study has provided the evidence for manufacturing entrepreneurs to migrate from financial dependence to innovation dependence for business success. The findings may provide a new research avenue like defining innovative characteristics/competencies required of SMEs as a driver for success.

Keywords: Malaysia; manufacturing industry; innovation capabilities; business performance; critical capabilities; quality systems; technical capabilities; business success; finance; management; innovative characteristics; innovative competencies; international business; entrepreneurship development; manufacturing entrepreneurs; internationalisation; small and medium-sized enterprises; SMEs.

DOI: 10.1504/JIBED.2012.045379

Journal for International Business and Entrepreneurship Development, 2012 Vol.6 No.1, pp.63 - 74

Published online: 06 Feb 2012 *

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