Title: Impact of business environment on balancing innovation process in Indian SMEs

Authors: Vinay Singh; Avni Agrawal

Addresses: Indian Institute of Information Technology and Management Gwalior, Morena Link Road, Gwalior-474015 (M.P.), India ' Indian Institute of Information Technology and Management Gwalior, Morena Link Road, Gwalior-474015 (M.P.), India

Abstract: The present research proposes a theoretical framework of assessing extents of innovation capability and balancing interplay of exploration and exploitation processes of SMEs. The innovation capabilities of SMEs are measured on the extent of harnessing exploration and exploitation whereas the balancing of interplay between exploration and exploitation activities explained by sequential and simultaneous approach in heterogeneous and hostile business environment. Theoretical frameworks are proposed in the form of hypotheses and verified through primary data collect from 213 respondents of 77 manufacturing SMEs in structured questionnaire. The result indicates that SMEs of Innovator class are more prone to sense environmental heterogeneity than the other SMEs. In heterogeneous business environment, they coordinate exploration and exploitation through ambidextrous approach. The SMEs perceiving less hostility as compared environmental heterogeneity follow sequential approach to balance their innovation. The finding is very useful to strategic decision makers/managers/owners of such SMEs to redefine and redesign the extent of balancing firms' innovation. The study also suggests aligning the production setup and innovation capabilities accordingly to balance all technological inputs collected from external environment/customers, and new product/outputs to the market.

Keywords: small and medium-sized enterprises; manufacturing SMEs; business environment; business innovation; exploration; exploitation; sequential approach; simultaneous approach; heterogeneous environment; hostile environment; India; innovation capability.

DOI: 10.1504/IJBIR.2017.081404

International Journal of Business Innovation and Research, 2017 Vol.12 No.2, pp.224 - 239

Received: 25 Sep 2014
Accepted: 07 Dec 2014

Published online: 07 Jan 2017 *

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