Value Creation and Firm Innovativeness of Small and Medium-Sized Enterprises in Ogun State, Nigeria
DOI:
https://doi.org/10.47672/jsm.1045Keywords:
Stakeholder Orientation, Customer Involvement, Organizational Resources, Innovativeness.Abstract
Background: Small and medium-sized enterprises are globally viewed as an important force driving economic development and employment creation in both developing and developed countries, which is well acknowledged. However, the performance of SMEs in developed and developing economies has been slow and in some cases even collapsed due to a number of challenges such as the inability to respond to rapidly changing market demand, technical advancements, and capacity constraints related to knowledge, innovation and creativity all of which have negatively impacted on SMEs' performance leading to inability to sustain SMEs competitive advantage, decline in sales-growth, profitability and reduced innovative-capability. Extant studies have attempted to elucidate on the challenges of SMEs and the attendant supposed solutions, conversely, most of the extant research focus more on developed countries than developing countries such as Nigeria.
Purpose: This study examined the effect of value creation on firm innovativeness of small and medium-sized enterprises in Ogun State, Nigeria.
Methodology: The study adopted a survey research design. The population was 2,465 registered small and medium scale enterprises in Ogun State, Nigeria. A sample size of 432 was determined using Cochran formula. Proportionate stratified sampling technique was adopted. A validated questionnaire was used to collect data. Cronbach's alpha reliability coefficients for the constructs ranged from 0.79 to 0.92. The response rate was 87.9%. Data were analyzed using descriptive and inferential statistics.
Findings: Findings revealed that value creation components had significant effect on innovativeness (Adj.R2 = 0.792; F (3,407) = 522.888, p < 0.05). The study concluded that value creation had a significant effect on firm innovativeness of SMEs in Ogun state, Nigeria.
Recommendation: The study recommended that value creation components enhanced small and medium enterprises' innovativeness and therefore, owners/managers should continually create value in other to enhance SMEs innovativeness.
Downloads
References
Adam, N. A. & Alarifi, G. (2021). Innovation practices for survival of small and medium enterprises (SMEs) in the COVID-19 times: The role of external support. Journal of Innovation and Entrepreneurship, 10(15), 1-22.
Adbi, A., Bhaskarabhatla, A., & Chatterjee, C. (2020). Stakeholder orientation and market impact: evidence from India. Journal of business ethics, 161(2), 479-496.
Begonja, M., Cicek, F., Balboni, B., & Gerbin, A. (2016). Innovation and business performance determinants of SMEs in the Adriatic region that introduced social innovation. Economic Research-Ekonomska Istraživanja, 29(1), 136-1149.
Bounding, W. Staehin, R., & Ehret, M. N. (2005). A customer relationship management road map. What is known potential pitfalls and where to go. Journal of Marketing, 155-166.
Brulhart, F., Gherra, S., & Quelin, B. (2019). Do stakeholder orientation and environmental proactivity impact firm profitability? Journal of Business Ethics, 2(3), 5-18.
Bryman, A. & Bell, E., (2011). Business research methods 3rd ed. Oxford: Oxford Univ. Press
Burton-Jones, A. (1999). Knowledge capitalism- business, work, and learning in the new economy. Oxford University Press, Oxford.
Cabral, S., Mahoney, J. T., McGahan, A. M., & Potoski, M. (2019). Value creation and value appropriation in public and non-profit organizations. Strategic Management Journal, 40: 465-475
Chang, W., & Taylor, S. A. (2016). The effectiveness of customer participation in new product development: a meta-analysis. Journal of Marketing, 80(1):47-64.
Chen, X., Liu, Z., & Zhu, Q. (2018). Performance evaluation of China's high-tech innovation process: Analysis based on the innovation value chain. Technovation, 74, 42-53.
De Guimar~aes, J. C. F., Severo, E. A., Henri Dorion, E. C., Coallier, F., & Olea, P. M. (2016). The use of organizational resources for product innovation and organizational performance: A survey of the Brazilian furniture industry. International Journal of Production Economics, 180, 135-147.
Dyduch, W., Chudzinski, P., Cyfert, S., & Zastempowski, M. (2021). Dynamic capabilities, value creation and value capture: Evidence from SMEs under Covid-19 lockdown in Poland. Plos one, 16(6), e0252423.
Feng, J., Li, C., Cen, S. & Owen, D. (2014). Statistical reconstruction of two-phase random media. Comput Struct; 137:78-92.
Feng, T., Sun, L., Zhu, C., & Sohal, A. S. (2012). Customer orientation for decreasing time-to-market of new products: IT implementation as a complementary asset. Industrial Marketing Management, 41(6), 929-939.
Feng, T., Wang, D., Lwaton, A., & Luo, B. N. (2019). Customer orientation and firm performance: The joint moderating effects of ethical leadership and competitive intensity. Journal of Business Research, 100 (1) 111-121.
Forkuoh, S. K., Li, Y., Ampadu, B., & Osei, M. A. (2016). Institutional support in managerial capacity building and SMEs growth. Open Journal of Business and Management, 4, 188-205.
Fünfgeld, H., Lonsdale, K. & Bosomworth, K. (2019). Beyond the tools: supporting adaptation when organisational 7 resources and capacities are in short supply. Climatic Change, 153(4), 625-641, doi:10.1007/s10584-018-2238-7
Habel, J., Kassemeier, R., Alavi, S., Haaf, P., Schmitz, C. & Wieseke, J. (2019). When do customers perceive customer centricity? The role of a firm's and salespeople's customer Orientation. Journal of Personal Selling & Sales Management, 10(6), 1-19.
Jain, T., Aguilera, R. V., & Jamali, D. (2016). Corporate stakeholder orientation in an emerging country context: a longitudinal cross industry analysis. Journal of Business Ethics, 8(3), 21-32.
Jalali, A., & Jaafar, M. (2019). The role of proactiveness as a mediatore between organizational-stakeholders relationship and SMEs performance. Journal of Southwest Jiaotong University, 54(3), 1-11.
Joshi, M. (2017). Viewpoint: Exploring innovation, De Novo & De Alio firms and their performance. Gestion, 34(5), 275.
Kimiti, P. & Kilika, J. (2018). Organizational resources, industry velocity, attention focus and firm's performance: A review of literature, International Journal of Business and Management, Canadian Center of Science and Education, 13(5).
Li, X., Nosheen, S., Haq, N. U., & Gao, X. (2021). Value creation during fourth industrial revolution: Use of intellectual capital by most innovative companies of the world. Technological Forecasting and Social Change, 163, 120479.
Li, Y., Li, G., Feng, T., & Xu, J. (2019). Customer involvement and NPD cost performance: The moderating role of product innovation novelty. Journal of Business & Industrial Marketing, 12(2), 21-46.
McCauley-Smith, C., Smith, S., Nantunda, L., & Zhu, X. (2020). The role of anchor institutions in creating value for SMEs: insights from North East of England owner managers. Studies in Higher Education, 1-13.
Meierhofer, J., & West, S. (2019, June). Service value creation using a digital twin. In Naples Forum on Service, Service Dominant Logic, Network & Systems Theory and Service Science: Integrating Three Perspectives for a New Service Agenda, Ischia (pp. 4-7).
Ndesaulwa, A. P., & Kikula, J. (2016). The impact of innovation on performance of small and medium enterprises (SMEs) in Tanzania: A review of empirical evidence. Journal of Business and Management Sciences, 4(1), 1-6.
OECD (2017, June 7-8). Enhancing the contributions of SMEs in a global and digitalized economy. Meeting of the OECD Council at Ministerial Level Paris.
Olu, D. O., Marius, P., Anca, G. P., & Florentina, R. B. (2017). Impact of innovation on the entrepreneurial success: Evidence from Nigeria. African Journal of Business Management, 11(2), 261-265.
Peppers, D., Rogers, M. & Dorf, B. (1999). Is your company ready for one-to-one marketing? Harvard Business Review, 151 - 160
Raper, M. J., Brough, P., & Biggs, A. (2020). Evidence for the impact of organisational resources versus job characteristics in assessments of occupational stress over time. Applied Psychology, 69(3), 715-740.
Renton, M., & Richard, J. E. (2019). Exploring brand governance in SMEs: does socialization provide a means to value creation? Journal of Brand Management, 26(4), 461-472.
Richards, K. & Jones E. (2008). Customer relationship management: Finding value drivers. Journal of Industrial Management, 37, 120-130.
Ryals, L. & Knox, S. (2001). Cross-functional issues in the implementation of relationship marketing through customer relationship management. European Management Journal, 19 (5), 534- 542.
Saldanha, T., Mithas, S., & Krishnan, M. S. (2017). "Leveraging Customer Involvement for Fueling Innovation: The Role of Relational and Analytical Information Processing Capabilities, MIS Quarterly (41:1), 267-286
Schumpeter, J. A. (1934). The theory of economic development: an inquiry into profits, capital, credit, interest and the business cycle, Harvard Economic Studies, 46, Har-vard College, Cambridge, MA.
Schumpeter, J. A. (1949). Economic theory and entrepreneurial history - change and the entrepreneur, postulates and patterns for entrepreneurial history (Cambridge, MA: Harvard University Press)
Serrasquiero, Z., Leitao, J., & Smallboness, D. (2018). Small and medium-sized enterprises (SME) growth and financing sources: Before and after the financial crisis. Journal of Management & Organization, 2(7), 1-16.
Sharma, S., & Vredenburg, H. (2018). Proactive corporate environmental strategy and the development of competitively valuable organizational capabilities. Strategic Management Journal, 19, 729-753.
Sjödin, D., Parida, V., Jovanovic, M., & Visnjic, I. (2020). Value creation and value capture alignment in business model innovation: A process view on outcome-based business models. Journal of Product Innovation Management.
Sledzik, K. (2013). Schumpeter's View on Innovation and Entrepreneurship. SSRN Electronic Journal, 89-93. doi:10.2139/ssrn.2257783
Smirnova, M. M., Rebiazina, V. A. & Frösn, J. (2017). Customer orientation as a multidimensional construct: Evidence from the Russian markets. Journal of BusinessResearch,(),S0148296317304204-doi:10.1016/j.jbusres.2017.10.040.
Srivastava, V., & Srivastava, M. K. (2021). Modelling Enablers of Customer-Centricity in Convenience Food Retail. In Innovations in Information and Communication Technologies (IICT-2020) (pp. 181-192). Springer, Cham.
Tantalo, C., & Priem, R. L. (2014). Value creation through stakeholder synergy. Strategic Management Journal, 37: 314-329.
Tsenyil, C. Y., Dakung, R. J., & Goyit, M. G. (2018). Competitive advantage of small and medium enterprises in Nigeria: The predicting role of innovative service delivery. European Journal of Business and Management, 10(17), 70-79.
Uchegbulam, P., & Akinyele, S. T. (2015). Competitive strategy and performance of selected SMEs in Nigeria. International Conference on African Development Issues, 326-333.
Ukpabio, M. G., Oyebisi, T. O., & Siyanbola, O.W. (2019). Effects of innovation on performance of manufacturing SMEs in Nigeria: an empirical study. Management Research News, 30(2), 115-132.
Vaitoonkiat, E., & Charoensukmongkol, P. (2019). Interaction effect of entrepreneurial orientation and stakeholder orientation on the business performance of firms in the steel fabrication industry in Thailand. Journal of Entrepreneurship in Emerging Economies, 2(1), 23-41.
Veronica, S., Alexeis, G. P., Valentina, C., & Elisa, G. (2020). Do stakeholder capabilities promote sustainable business innovation in small and medium-sized enterprises? Evidence from Italy. Journal of Business Research, 119, 131-141.
Veronica, S., Alexeis, G. P., Valentina, C., & Elisa, G. (2020). Do stakeholder capabilities promote sustainable business innovation in small and medium-sized enterprises? Evidence from Italy. Journal of Business Research, 119, 131-141.
Wang, Y. (2016). What are the biggest obstacles to growth of SMEs in developing countries? - An empirical evidence from an enterprise survey. Borsa Istanbul Review, 16(3), 167-176.
Wasito, A. B. S. (2017). Improve the performance of SMES through innovation strategies in developing countries. International Journal of Scientific & Technology Research, 6(10), 282- 285.
Willumsen, P., Oehmen, J., Stingl, V., & Geraldi, J. (2019). Value creation through project risk management. International Journal of Project Management; 37(5), 731-749. doi: 10.1016/j.ijproman.2019.01.007
Yimamu, N. (2018). Entrepreneurship and entrepreneurial motivation, Thesis Centria University Of Applied Sciences, Business Management
Zhang, H., & Xiao, Y. (2020). Customer involvement in big data analytics and its impact on B2B innovation. Industrial Marketing Management, 86, 99-108.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2022 Akpa V.O, Shodunke O.O, Makinde O.G, Nwankwere I.A
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution (CC-BY) 4.0 License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
