Effects of size, market and strategic orientation on innovation in non‐high‐tech manufacturing SMEs

Abstract

Purpose

The purpose of this paper was to examine the effects of size, strategic orientation and market orientation on innovation.

Design/methodology/approach

A mail survey was conducted on a random sample of 60 South Yorkshire non‐high‐tech small, medium‐sized manufacturing enterprises. A hypothesised model, stating company size, strategic and market orientation affect innovation was tested using multiple linear regression analysis.

Findings

The results confirm customer orientation has a positive effect on innovation at product, process and organisational level. While it was found size and strategic orientation have an effect on process innovation. Size also has an impact on strategic orientation and strategic orientation on market orientation. Overall, medium‐sized firms are prospectors and small firms, defenders. Prospectors are customer focused while defenders are competitors and environmental/technology‐led. Process innovation is important to defenders. The findings reiterate that customers are the drivers for organisational innovation; while firms' strategic orientation determines their market orientation.

Originality/value

This paper addresses a gap in the literature by that showing size, strategic orientation and market orientation are interrelated and, that customer orientation has a direct impact on innovation the most.

Citation

Laforet, S. (2009), "Effects of size, market and strategic orientation on innovation in non‐high‐tech manufacturing SMEs", European Journal of Marketing, Vol. 43 No. 1/2, pp. 188-212. https://doi.org/10.1108/03090560910923292