Role of strategic orientation and environmental perceptions on Innovation in SMEs

The Purpose of this research is to investigate the role and impact of strategic orientation and environmental perceptions on innovation and supporting mechanisms such as process technologies and management practices, in SMEs.A quantitative approach based on a random sampling methodology of 200 SMEs was tested in the research. SMEs can be categorized as either prospectors or defenders. This polarization was confirmed in this study. Prospectors are more likely to engage in new product development, whereas defenders are five times more likely to modify an existing product than introduce a newly patented product. Prospector-type firms tend to deploy more new process technologies and leading management practices compared with defender type firms, particularly in a turbulent operating environment.The result of this research encourages the chief executives to align their strategic orientation with their innovation strategy. In addition, defender type firms should consider the greater use of process technologies and management practices.

Keywords:

Innovation , Small to medium enterprises , Strategic management