The effects of environmental uncertainty conditions on organisational innovativeness and performance of SMEs.

by Lana Abdallah

Institution: Blekinge Institute of Technology
Year: 2014
Keywords: industriell ekonomi; industrial management and engineering; environmental uncertainty; organizational innovativeness; performance; market/demand turbulence; technological turbulence; smes.
Record ID: 1362492
Full text PDF: http://www.bth.se/fou/cuppsats.nsf/6753b78eb2944e0ac1256608004f0535/475af5787354b2e3c1257d040071abfe?OpenDocument


Innovativeness is considered to be an important factor for firm’s survival and their ability to compete in today’s market. Therefore, researchers have become more interested in studying innovativeness and its drivers. Studies have also showed that there’s a positive relationship between environmental uncertainty and innovativeness. Organisations are responsive to turbulent environments through innovativeness in order to stay competitive and improve performance. The purpose of this thesis is to rank critical environmental factor’s effect on organisational innovativeness of small and medium enterprises in Sweden, through investigating the impact of market/demand turbulence and technological turbulence on innovativeness. Additionally, we want to examine the relationship between innovativeness and business performance, as well as the indirect relationship between environmental uncertainty and performance. Based on previous literature, we have developed hypotheses and proposed a research model to study the formulated problems. Data for the study were collected from 50 SMEs in Sweden, through a survey with well-known scales and were analysed using regression analysis. The results of the study, reveal that environmental uncertainty has a positive effect on the innovativeness of SMEs. In addition, technological turbulence showed to have a positive significant effect on an SME’s innovativeness; however, contrary to general belief, market/demand turbulence did not have any prominent effect. Our findings also proved that innovativeness have a strong positive impact on business performance, and that only technological turbulence have an indirect influence on performance through innovativeness. This study aimed to contribute to the management a better understanding, of which conditions of environmental turbulences SMEs should adapt to, in order to increase their level of innovativeness. Keywords: environmental uncertainty, organizational innovativeness, performance, market/demand turbulence, technological turbulence, SMEs.