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Impact of business model innovations on SME’s innovativeness and performance

Rimantas Gatautis (School of Economics and Business, Kaunas University of Technology, Kaunas, Lithuania)
Egle Vaiciukynaite (School of Economics and Business, Kaunas University of Technology, Kaunas, Lithuania)
Asta Tarute (School of Economics and Business, Kaunas University of Technology, Kaunas, Lithuania)

Baltic Journal of Management

ISSN: 1746-5265

Article publication date: 3 June 2019

Issue publication date: 28 October 2019

Abstract

Purpose

Business model innovations (BMIs), their drivers and outcomes are attracting increasing attention in academic literature. However, previous studies have mainly focused on large companies, while knowledge of BMI in small-to-medium-sized enterprises (SMEs) is limited. Therefore, the purpose of this paper is to add new insights into how related BMI drivers, practices and outcomes are in relation to SMEs.

Design/methodology/approach

An extensive review of the existing literature was performed. Consequently, the relationships between BMI drivers, BMI practices and outcomes of BMI were developed as a conceptual framework. An empirical study was carried out. A structural equation modeling (SEM) procedure was used to empirically test the model using a quantitative data set of Lithuanian SMEs (n=73).

Findings

The study provides insights into the relations between BMI drivers, BMI practices and outcomes of BMI in SMEs. The findings of SEM, four drivers (innovation activities, strategic orientation, market and technology turbulence, respectively) are indicated to contribute to BMI of SMEs. In addition, the results proved that the implementation of BMI practices leads to strategic and architectural changes in firms and has a positive impact on SMEs performance and innovativeness.

Research limitations/implications

Empirical research is focused on a limited number of internal and external BMI drivers, which have an influence on BMI in SMEs from one geographical region. Consequently, there are many external and internal BMI drivers which also may have an influence on BMI in SMEs, such as industry life cycle, organizational inertia and leadership. Meanwhile, SMEs possess multiple characteristics, i.e. a phase of maturity, gender of CEO, firm size and industry; therefore, the aforesaid aspects are considered to be significant limitations. In addition, the importance of SMEs characteristics as mediators for the effects on a firm’s performance and innovativeness should be considered in future research avenues.

Practical implications

Findings of this research can be used by SME managers to better understand how firms might actively engage in BMI practices, what drivers lead to BMI and, in turn, affect their firm’s performance and innovativeness. SME managers should be encouraged to pay attention to strategic and architectural changes of BM that can contribute to enterprise performance and innovativeness.

Originality/value

This paper adds to the stream of BMI research by empirically exploring drivers and outcomes of BMI in SMEs. In addition, this paper fulfills research gaps proposed by Bouwman et al. (2018), Foss and Saebi (2017), Heikkilä, Bouwman and Heikkilä (2018) and Lambert and Davidson (2013), and enhances the current overall understanding of BMIs.

Keywords

Acknowledgements

This research is funded by the ENVISION project, by the European Commission Horizon 2020 program. The authors thank late Professor Rimantas Gatautis who encouraged the authors to pursue this study. The authors deeply appreciate his inspiration and guidance for the research idea which was developed as Professor Rimantas Gatautis has expected.

Citation

Gatautis†, R., Vaiciukynaite, E. and Tarute, A. (2019), "Impact of business model innovations on SME’s innovativeness and performance", Baltic Journal of Management, Vol. 14 No. 4, pp. 521-539. https://doi.org/10.1108/BJM-01-2018-0035

Publisher

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Emerald Publishing Limited

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