Business model innovation in small and medium-sized enterprises: an exploration of key drivers and performance implications

Small and medium-sized enterprises (SMEs) are at the heart of a nation's wealth creation, employment generation and economic development. Hence, new ways to sustain and reinforce their competitiveness in today’s fast-changing, complex and unpredictable environment become key for their survival and the development of the region. In this context, business model innovation is emerging as a new source of competitive advantage that can complement or even substitute for traditional forms of innovation. Recently, research has started to empirically explore how SMEs can proactively address business model innovation to adapt their business model to the environmental challenges. However, the literature is widely dispersed, and further research is needed to develop the big picture of the key drivers and outcomes of business model innovation in SMEs. The main goal of this thesis is therefore to explore business model innovation in SMEs from a holistic view. Based on a sample of 78 SMEs and using an exploratory approach, it examines the effects of certain antecedents on business model innovation, and the performance implications of business model innovation. Business model innovation is also compared with other forms of innovation (product, service, marketing, process and organisation). Research is conducted through a mixed-method approach comprising a questionnaire and different methods of data analysis: partial least squares structural equation modeling, fuzzy-sets qualitative comparative analysis, and statistical tests. The findings suggest that strategizing, sensing and experimenting capabilities are key drivers of business model innovation in SMEs, and these capabilities are promoted by the managerial orientation and the innovation culture of the firm. The influence of collaboration capabilities on business model innovation, in turn, was found non-significant. The results also indicate that the use of business model innovation tools facilitates business model innovation. Approaching the phenomenon from a configurational view, the results further suggest that SMEs combine the above-mentioned antecedents following different, equally effective paths to business model innovation, thereby reflecting distinct causation-effectuation behaviours. Additionally, business model innovation seem to be related to superior firm performance, and business model advantage partially explains this relationship. Lastly, it is shown that business model innovation is a distinct but complementary form of innovation that interrelates with business innovation (product, service, marketing, process and organisation). This investigation contributes therefore to a better understanding of business model innovation in SMEs, and the results have practical implications for SMEs and public administration.Enpresa txiki eta ertainak (ETEak) aberastasun eta enpleguaren sorrerarako eta garapen ekonomikorako giltzarria dira. Horrela, egungo ingurune aldakor, konplexu eta ezustekoan ETE-en lehiakortasuna mantendu eta indartzeko modu berriak nahiatezkoak dira haien biziraupenerako eta lurraldearen garapenerako. Testuinguru horretan, negozio ereduaren berrikuntza lehiarako abantail iturri berria bilakatu da, eta berritzeko modu tradizionalak osatu edota ordezkatu ditzake. Azken urteetan ikerketak hasi dira enpirikoki aztertzen nola berritu ditzaketen modu proaktiboan ETE-ek euren negozio ereduak testuinguruko erronketara egokitzeko. Hala ere, literatura oso zabala da eta ikerketa gehiago behar dira ETE-etan negozio ereduaren berrikuntza sustatzen duten faktore nagusien eta emaitzen ikuspegia orokorra lortzeko. Hori dela eta, ETE-en negozio ereduaren berrikuntza ikuspegi holistikotik aztertzea da tesiaren helburu nagusia. 78 ETEko lagin batetik abiatuta, ikerketak explorazio ikuspegia hartu, eta aurrerakari batzuek negozio ereduaren berrikuntzan duten eragina eta negozio ereduaren berrikuntzak enpresaren emaitzetan duen ondorioa aztertzen ditu. Negozio ereduaren berrikuntza beste berrikuntza mota batzuekin (produktua, zerbitzua, marketina, prozesua eta antolakuntza) ere alderatzen da. Ikerketak, metodo misto baten antzera, datuak galdetegi baten bitartez jaso, eta hiru metodo hauen bitartez ustiatu ziren: partial least squares ekuazio estrukturalen bidezko modelizazioa, fuzzy-set analisi kualitatibo konparatiboa, eta test estatistikoak. Emaitzek aditzera ematen dutenez, estrategia garatzeko, aukerak hautemateko eta esperimentatzeko gaitasunak dira ETE-en negozio ereduaren berrikuntzaren eragile nagusiak, eta kudeaketa orientazioa eta enpresaren berrikuntza kulturak dira, berriz, gaitasun horiek sustatzen dituztenak. Lankidetza gaitasunaren eragina negozio ereduen berrikuntzan, berriz, ez zen esanguratsua. Emaitzek adierazten dute, halaber, negozio ereduaren berrikuntzarako tresnen erabilerak negozio ereduaren berrikuntza errazten duela. Horrez gain, aurrekari horiek enpresaren portaeraren arabera (causal-effectual) bide desberdinetatik negozio eredua berritzera daramaten hainbat konfigurazio eraginkor iradokitzen dira. Gainera, badirudi negozio ereduaren berrikuntza enpresaren errendimenduaren hobekuntzarekin lotuta dagoela, eta negozio ereduaren abantailak, berriz, partzialki azaltzen du erlazio hori. Azkenik, egiaztatu zen negozio ereduarena berrikuntza mota ezberdina dela, baina beste berrikuntza mota batzuen osagarria. Hori guztia dela eta, ikerketa honek ETE-etan negozio ereduen berrikuntza hobeto ulertzen laguntzen du, eta aldi berean ETE-ei eta administrazio publikoei inplikazio praktikoak eskaintzen dizkie.La pequeña y mediana empresa (PYME) es clave para la creación de riqueza, generación de empleo y el desarrollo económico. Así, las nuevas formas de mantener y reforzar su competitividad en un entorno cada vez más cambiante, complejo e impredecible, son clave para su supervivencia y el desarrollo de la región. En este contexto, la innovación en el modelo de negocio emerge como una nueva fuente de ventaja competitiva que puede complementar o incluso sustituir las formas tradicionales de innovación. Recientemente, las investigaciones han comenzado a explorar empíricamente la forma en que las PYMEs pueden innovar proactivamente su modelo de negocio para adaptarlo a los desafíos del entorno. Sin embargo, la literatura es muy dispersa y es necesario seguir investigando para obtener una idea general de los principales impulsores y los resultados de la innovación en el modelo de negocio de las PYMEs. Por lo tanto, el principal objetivo de esta tesis es explorar la innovación en el modelo de negocio en las PYMEs desde una visión holística. En base a una muestra de 78 PYMEs, esta investigación adopta un enfoque exploratorio que aborda el efecto que ciertos antecedentes tienen en la innovación en el modelo de negocio, y el impacto que ésta tiene sobre los resultados organizacionales. También se compara la innovación en el modelo de negocio con otros tipos de innovación (producto, servicio, proceso, marketing, organización). La investigación se aborda mediante un enfoque de métodos mixtos que comprende un cuestionario y diferentes métodos de análisis de datos: modelización de ecuaciones estructurales por el método de mínimos cuadrados parciales, análisis cualitativo comparativo de conjuntos difusos y pruebas estadísticas. Los resultados sugieren que las capacidades de elaboración de estrategias, detección de oportunidades y experimentación son las principales impulsoras de la innovación en el modelo de negocio de las PYMEs, y que estas capacidades son promovidas por la orientación de la gestión y la cultura de innovación de la empresa. A su vez, la influencia de las capacidades de colaboración en la innovación en el modelo de negocio resultó no ser significativa. Los resultados también indican que el uso de herramientas para la innovación en el modelo de negocio facilita la innovación en el modelo de negocio. Al abordar el fenómeno desde una perspectiva configuracional, los resultados sugieren que las PYMEs combinan estos antecedentes siguiendo caminos diferentes, pero igualmente eficaces para innovar en el modelo de negocio; lo que refleja distintos comportamientos (causales y efectuales). Además, la innovación en el modelo de negocio parece estar relacionada con un rendimiento superior de la empresa, y la ventaja del modelo de negocio explica parcialmente esta relación. Por último, se muestra que la innovación en el modelo de negocio es una forma de innovación distinta, pero complementaria, que se interrelaciona con otros tipos de innovación. Esta investigación contribuye así a una mejor comprensión de la innovación en el modelo de negocio, al tiempo que proporciona implicaciones prácticas para las PYMEs y la administración pública

Exploring Factors Influencing Open Innovation Adoption in SMEs: The Evidence from Emerging Markets

Open Innovation (OI) is among the vital innovation paradigms for assisting small and medium enterprises (SMEs) to effectively implement innovation initiatives. Drawing on the concepts of organisational agility and absorptive capacity with transaction cost theory, this study’s goal is to investigate factors affecting the adoption of an Open Innovation (OI) orientation in Thai SMEs. Using data from 214 SMEs in Thailand, structural equation modelling validated the model and analysed the proposed hypotheses. The results show that organisational agility, economic and financial readiness and absorptive capacity relate positively to OI adoption and innovation performance. Organisational agility (b = 0.553) had the greatest influence on OI adoption, then economic and financial readiness (b = 0.405) and absorptive capacity (b = 0.387) followed. The results of mediation analysis also reveal that OI adoption partially mediates the effects of organisational agility and absorptive capacity on innovation performance. Our study provides a trailblazing empirical analysis of the major factors influencing SMEs’ OI adoption and performance, extending knowledge of OI adoption by SMEs in emerging economies. The paper proposes a holistic framework for examining SMEs’ OI adoption and performance, through the integration of organisational agility, absorptive capacity and transaction-cost concepts. Doi: 10.28991/esj-2021-01295 Full Text: PD

Business Model Innovation in Established SMEs: A Configurational Approach

Small and medium-sized enterprises (SMEs) are at the heart of a nation’s wealth creation, employment generation and economic development. To help SMEs stay competitive in a fast-changing environment, researchers have recently emphasized the relevance of business model innovation (BMI). However, BMI and its performance are not linear but rather a complex phenomenon that depends on contingency factors. Based on configurational theory, this study extends the BMI research to SMEs, exploring the management approaches and BMI capabilities that foster BMI in established SMEs. To achieve this objective, this study of a purposive sample of 78 Spanish SMEs adopts the fuzzy set qualitative comparative analysis (fsQCA) method. Results suggest three substantive conclusions. First, long-term managerial orientation is a key factor for the development of BMI in SMEs. Second, five BMI capabilities (sensing customer needs, sensing technological options, conceptualizing and experimenting, collaborating and BMI strategy) support, in combination with the management approach, the development of BMI in established SMEs. Third, open innovation (open flows of knowledge regarding market needs and the potential of technologies, as well as collaboration with customers) are concrete preconditions of business model innovation. Therefore, managers in SMEs need both to actively consider their management approach towards BMI, and to develop some key dynamic capabilities in their organizations to implement BMI, an approach also valid for post-Covid-19 management

Information technology-enabled explorative learning and competitive performance in industrial service SMEs: a configurational analysis

This is the author accepted manuscriptPurpose: As purveyors of knowledge-based and high value-added services to the manufacturing sector, industrial service small- and medium-sized enterprises (SMEs) must develop the information technology (IT) capabilities that, in combination with other non-IT capabilities, enable their capacity for organizational learning (OL) and for explorative learning in particular. In this context, this study aims to identify the different causal configurations that account for the nonlinear complex interplay of IT capabilities for exploration and strategic capabilities for explorative learning as they affect these firms’ competitive performance. Design/methodology/approach: Survey data obtained from 92 industrial service SMEs were analyzed with a configurational approach, using fuzzy set qualitative comparative analysis (fsQCA). Findings: As it allows for equifinality, the fsQCA analysis identified two sets of causal configurations that characterize the sampled firms’ explorative learning capability as it relates to competitive performance. In the first set, two configurations were equally associated with high innovation performance, whereas in the second set, four configurations were equally associated with high productivity. Originality/value: By viewing explorative learning as a dynamic capability that is enabled by the firm’s IT and strategic capabilities, the study contributes to OL theory by providing a more concrete or “operational” grounding, which allows for a greater practical applicability of this theory. By taking both the configurational and capability-based views of the OL-IT-performance causal framework, the authors provide an empirical basis for unraveling, explaining and understanding the complex non-linear relationships embedded within this framework

IT ambidexterity: a competitive IT capability for high-tech SMEs

The proliferation of information technology (IT) tools has pervaded industry environment with products that are becoming differentiated, smarter and competitive every day. Following this trend, high-tech small and medium enterprises (SMEs) face precarious pressures to enhance their technological competence continuously to survive. They are required to embed IT ambidexterity – the ability of the firm to simultaneously refine their existing technologies (IT exploitation) and search new technological solutions (IT exploration) – into their organisational strategy. Owing to limited slack resources and immature firm routines, processes, administrative hierarchy, organisational systems and operational experiences, a key challenge for high-tech SMEs arise in enabling and managing the simultaneous pursuit to exploit existing technology in the short-term and explore new technological breakthroughs for the long-term. This dissertation posits IT ambidexterity as a competitive IT capability and sets out to investigate what are the enabling mechanisms that allow high-tech SMEs to become IT ambidextrous and whether IT ambidexterity is, in fact, a relevant strategy to enable superior performance in high-tech SMEs of the United Kingdom. A survey based dataset of 292 high-tech British SMEs are empirically analysed to test the proposed hypotheses. The study consists of an introduction, a conclusion, and in between four empirical papers, which address specific research gaps in the extant IT ambidexterity literature. Chapter two examines the role of leadership and organisational configuration in facilitating IT ambidexterity and analyses its implications on projects’ performance. The empirical analysis suggests that both leadership and organizational configuration play a vital role to enable IT ambidexterity, which in turn improves project performance. Chapter three focuses primarily on the role of high-tech SME leaders to understand if leadership decision-making styles initiate IT ambidexterity and examines how and when a particular leadership decision-making style can be more effective by considering organisational diversity and shared vision as two important organisational contingencies. The findings suggest leadership participative as well as directive decision-making styles enable IT ambidexterity; however, the participative decision-making style is more effective with heterogeneous firm members, and the directive decision-making style is preferred when a shared vision is dominant among firm members. Moreover, results show that IT ambidexterity significantly enhances firm performance. Chapter four explicates the effect of IT ambidexterity on IT department performance. This chapter draws on a combination of the resource-based view and contingency theory to investigate the moderating effects of a firm’s internal and external contingencies on the IT ambidexterity-IT department performance relationship. The findings show that the positive effect of IT ambidexterity on IT performance is amplified for the firms with more resources and at higher levels of environmental dynamism, complexity and munificence. Interestingly, the results show that the performance implications of IT ambidexterity are not firm age-dependent. Chapter five develops on the IT-enabled organisational capabilities perspective to examine whether IT ambidexterity enhances speed to market – referred as how quickly product is made available in the market after the product definition stage. This chapter posits operational agility as an IT-enabled organisational capability and that formalisation plays a role of moderator in this equation. The developed model is further examined under the varying conditions of environmental complexity. The empirical analysis suggests that the effect of IT ambidexterity on speed to market is partially mediated by operational agility and the operational agility has a greater impact on speed to market in environments that are more complex. While formalization does not moderate the link between IT ambidexterity and operational agility, our results reveal that this moderation effect is evident and significant in complex environments. Despite of its importance, IT ambidexterity is an IT concept only proposed and investigated very recently, for which our understanding is extraordinarily limited in the field of IS. Altogether, this thesis contributes to the embryonic stage of IT ambidexterity literature by providing an in-depth understanding of the enabling mechanisms and consequences of IT ambidexterity in high-tech SMEs. The findings of this thesis contribute to the debate surrounding how to manage and organise for IT exploitation and IT exploration simultaneously within the same firm. In contrast to prior arguments that ambidexterity can only be enabled with separate exploration and exploitation organisational units, the mechanisms irrelevant to high-tech SMEs, this study highlights the idiosyncratic roles of firm leaders and configurations to develop IT ambidexterity. In addition, against the theoretical concerns that due to resource limitations ambidexterity might become a performance-constraining strategy for high-tech SMEs, this study illustrates that IT ambidexterity not only directly impacts performance outcomes of high-tech SMEs but also provide a foundation for developing a higher-order operational capabilities. In conclusion, this study responds to the call for greater attention on developing a competitive IT framework. In contrast to several other constructs (e.g. IT spending, IT development, and IT possession) that may not necessarily create competitive advantage due to imitability and substitutability, this study theorises IT ambidexterity as a distinct and valuable IT capability that is hard to emulate. This study contributes to the Information Systems research by clearly identifying the enabling mechanism and impacts of IT ambidexterity, thus, serves as a foundation stone for future research in this important and growing area of research

Configurational Analysis of Inbound and Outbound Innovation Impact on Competitive Advantage in the SMEs of the Portuguese Hospitality Sector

This study analyzes the effects of inbound and outbound open innovation, along with organizational strategy and corporate risk management, on competitive advantage and disadvantage in the Portuguese hospitality sector’s cost, service, and product. We use a quantitative approach based on fuzzy set qualitative comparative analysis (fsQCA) of survey data from 251 executive directors of hotels from Portuguese small and medium-sized enterprises (SMEs). The results allow visualization of the interactions of inbound and outbound open innovation with corporate risk management and organizational strategy in order to generate competitive advantage. The results demonstrate that corporate risk management is a keystone for a competitive cost advantage, whereas inbound open innovation plays a fundamental role in obtaining competitive advantages for products and services. Other factors, such as outbound open innovation or those linked with organizational strategy, have less impact, and/or the sign of their influence depends on the configuration of the remaining variables

Enabling innovation in the face of uncertainty through IT ambidexterity: A fuzzy set qualitative comparative analysis of industrial service SMEs

This is the author accepted manuscriptTaking a configurational approach, this paper investigates the causal configurations of IT ambidexterity (i.e., IT capabilities for exploitation and exploration), dynamic capabilities (i.e., innovation and networking capabilities) and environmental uncertainty that are associated to service innovation performance in small and medium-sized enterprises (SMEs). Results from a fuzzy set qualitative comparative analysis (fsQCA) of 63 industrial service SMEs show that these firms attain high service innovation performance with three different configurations under conditions of high uncertainty. Two configurations highlight the importance of IT exploration capabilities (combined with the absence of innovation and networking capabilities in one configuration and with the absence of networking capabilities and IT capabilities for exploitation in another), whereas another configuration accentuates the importance of IT exploitation capabilities (combined with the presence of innovation and networking capabilities). Our study contributes to the literature in multiple ways. For instance, due to the equifinal properties of the configurational approach, our results suggest that SMEs can attain high innovation performance through both sequential and simultaneous IT ambidexterity, thus providing a starting point for reconciling competing views of IT ambidexterity. Other contributions to theory and practice and avenues for future research are also discussed.“Retos de la Sociedad” of the Ministry of Economy, Industry and Competitiveness of the Government of Spai

Open Innovation and Competitive Advantage: The Roles of Organizational Strategy and Corporate Risk Management

Aquesta tesi es desenvolupa a partir de la premissa de que el model d'innovació oberta millora les capacitats innovadores de les empreses, influint en la gestió del risc empresarial, l’estratègia organitzativa i l'avantatge competitiu. L’objectiu principal de l’estudi és, doncs, analitzar la relació de la innovació oberta amb la gestió del risc corporativa, l’estratègia organitzativa i l’avantatge competitiu i, addicionalment, l’efecte mediador de la gestió del risc corporativa en la relació entre la innovació oberta i l’estratègia organitzativa. El marc teòric-conceptual es va elaborar a partir de la revisió bibliogràfica sobre el tema, de la qual es va derivar la construcció del model analític, a partir del qual es van formular les hipòtesis de recerca dels estudis. La contrastació empírica s’ha dut a terme a partir d'una metodologia quantitativa, que ha suposat la construcció d’un qüestionari que s’ha aplicat, en forma d’enquesta en línia, a una mostra de màxims directius de 251 empreses del sector de l’hostaleria a Portugal. Les dades primàries recollides van ser sotmeses a tractaments d’anàlisi estadística descriptiva i inferencial, destacant l’aplicació del model d’equacions estructurals. Els resultats d’aquesta tesi confirmen que (1) la innovació oberta millora positivament la gestió del risc empresarial, l'estratègia organitzativa i l’avantatge competitiu i (2) la gestió del risc corporativa millora positivament l'estratègia organitzativa i l’avantatge competitiu.Esta tesis se desarrolla a partir de la premisa de que el modelo de innovación abierta potencia las capacidades innovadoras de las empresas, influyendo en la gestión del riesgo corporativo, la estrategia organizativa y la ventaja competitiva. Así, el objetivo principal del estudio es analizar la relación de la innovación abierta con la gestión del riesgo empresarial, la estrategia organizativa y la ventaja competitiva y, adicionalmente, el efecto mediador de la gestión del riesgo empresarial en la relación entre la innovación abierta y la estrategia organizativa en esta relación. El marco teórico-conceptual se elaboró a partir de la revisión de la literatura sobre el tema, de la que se derivó la construcción del modelo analítico, a partir del cual se formularon las hipótesis de investigación de los estudios. La contrastación empírica de las mismas se realizó a partir de una metodología cuantitativa, que implicó la construcción de un cuestionario que se aplicó, en forma de encuesta online, a una muestra de 251 altos directivos de empresas del sector de la hostelería en Portugal. Los datos primarios recogidos fueron sometidos a tratamientos de análisis estadístico descriptivo e inferencial, destacando la aplicación del modelo de ecuaciones estructurales.This thesis is developed from the premise that the open innovation model enhances the innovative capabilities of firms, influencing corporate risk management, organizational strategy and competitive advantage. The main objective of the study is thus to analyse the relationship of open innovation with corporate risk management, organizational strategy and competitive advantage and, additionally, the mediating effect of corporate risk management on the relationship between open innovation and organizational strategy in this relationship. The theoretical-conceptual framework was elaborated based on the literature review on the subject, from which the construction of the analytical model was derived, from which the research hypotheses of the studies were formulated. The empirical contrasting of these was carried out based on a quantitative methodology, which involved the construction of a questionnaire that was applied, in the form of an online survey, to a sample of 251 firms’ top managers in the hospitality sector in Portugal. The primary data collected were subjected to descriptiv

Exploring the drivers of business model innovation and its significance for performance in high-tech sectors

Business model innovation (BMI) has emerged as a vital determinant for the organization’s success and survival. This study explores the external (technological turbulence and market dynamism) and internal (knowledge management culture and inbound open innovation) antecedents of BMI and its effect on firm performance on a sample of high-tech companies from Poland (n=160). We find that external antecedents and inbound open innovation are positively related to BMI and that BMI positively affects company performance. This study contributes to the extant literature by emphasizing the role of organizational propensity to conduct open innovation, revealed by building strong ties with external parties and relying on their innovation through proactive search for external ideas, technological knowledge, and products

What drives strategic agility? Evidence from a fuzzy-set qualitative comparative analysis (FsQCA)

Strategic agility is a topic that has not reached maturity and is of increasing interest for companies and academics alike. Yet few studies assess what drives strategic agility in organisations. This paper aims to review how companies are currently obtaining strategic agility and to identify the individual factors and confgurations that lead to it. The study draws on a survey carried out with 40 Spanish companies in the services sector. The study then uses Qualitative Comparative Analysis (QCA) to identify the diferent confgurations of factors that lead to strategic agility. Finally, we complement QCA analysis by performing a case study for each of the confgurations that lead to strategic agility. The study reveals that there is no necessary condition to reach strategic agility and that companies reach it in fve main ways, depending on diferent combinations of six factors: frm size, frm age, whether the frm is international, whether it competes in a turbulent environment, and whether the frm invests in i) capabilities and technologies, and ii) additional revenue models or cost-cutting mechanisms or not