Internal Characteristics

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Some literatures have concluded that internal characteristics are essential on achieving high organizational performance through innovation. It depends whether the organization builds up a radical or incremental innovation, for which different strategies and structures are needed. According to Pullen et al., (2009), the internal characteristics, which involve strategy, process and organization, play a significant role to make decision on the development of innovation types. Conventional strategy is focused more on incremental innovation through development or improvement of existing products and services, while technology strategy encourages radical innovation by focusing on emerging trend. An additional internal characteristic of SMEs consist…show more content…
The turnover of the firm is the most frequent measure of growth, which addresses taxation concerns, whereas the number of employees is another measure of growth, which addresses the job concerns. There is interconnection between these two growth indicators within the context of SMEs, and they are used due to their visibility and simplicity to obtain within organizations (Fadahunsi, 2012). There are many definitions of SMEs from different authors; however, the common criteria include the number of employees, sales and investment level. Most sources categorize SMEs based on the number of employees, which comprise of those that have no more than 250 employees (Ayyagari et al., 2007). Over the years, there have been many theories of organizational performance in the strategic management literature. Two significant aspects of organizational performance perspectives in strategic management are the constituencies for whom the organization performs, and the dimensions which should be calculated. Fadahunsi (2012) categorized three factors that will influence SMSs organizational…show more content…
So many literatures have stressed upon the effect and relationship between entrepreneurial orientation and innovation (Miller, 1983; Covin and Slevin, 1989; Schafer, 1990; Barringer and Bluedorn, 1999; Wicklund and Shepherd, 2003; Harms et al., 2009; Hafeez et al., 2012). According to Lumpkin and Dess (1996, 2001) entrepreneurial orientation refers to the trend of a firm to indulge in innovative, proactive and risk prone ventures. From the literature it can be argued that innovation is a function of entrepreneurial orientation. Similarly the literature asserts a significant relationship between entrepreneurial orientation and organizational performance (Wicklund et al., 2009). Entrepreneurial Orientation is measured as a behavioral procedure that operates at firm level. If entrepreneurial orientation is prone towards innovation, the firm would follow and manage innovation in their activities as compared to those firms where entrepreneurs are less innovative and risk aversive; and perform better than the competitors. Hafeez et al. (2012) found organizational innovation can be as mediating factors that will influence the effect of entrepreneurial orientation and organizational

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