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The Effect of Innovation Types on the Performance of Small and Medium-Sized Enterprises in the Sekondi-Takoradi Metropolis

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The Effect of Innovation Types on the Performance of Small and Medium-Sized Enterprises in the Sekondi-Takoradi Metropolis

Francis Boachie-Mensah, Innocent S. K. Acquah


Abstract



Innovativeness has been touted as one of the fundamental
instruments of growth strategies to enter new markets, to increase the
existing market share and to provide the company with a competitive
edge. Despite this acknowledgement, there is lack of research into how
innovation contributes to the performance of small and medium sized
enterprises. The aim of this study was to investigate the influence of
innovation on organisational performance of small and medium-sized
enterprises (SMEs) in the Sekondi-Takoradi metropolis. The research
design used was survey research design whilst the research approach was
quantitative research approach. Simple random sampling technique was
used to collect data from 243 owners/owner managers of SMEs in the
Sekondi-Takoradi Metropolis through self-administered questionnaires.
Partial least squares (PLS) structural equation modelling (SEM) was used
to test the hypotheses postulated. The study revealed that all four
different types of innovation significantly influence organisational
performance positively, except the product innovation/organisational
performance relationship, which was positive but not significant. The
results also suggest that innovation accounted for more than fifty one
percent of the variation in organisational performance. It was,
therefore, recommended that managers of SMEs pay critical attention to
the implementation of innovation activities in their firms due to its
positive impact of performance.



Keywords: Innovation, organisational performance, small and medium-sized enterprises


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DOI: http://dx.doi.org/10.14738/abr.33.1240



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