This thesis seeks to develop insights into the nature of organisational capabilities that influence organisational competitiveness and innovation amongst a selection of SMEs. An interpretivist approach was followed to understand the phenomena from the participants point perspective. Participants in the study were the key players in the selected organisations, and had the experience and knowledge base to help the author develop deep insights into the research subject. The emerging analysis shaped the theory which the study set out to generate. This thesis generates an understanding and insights into the role of leadership, organisational structure and culture and a company's relationships with stakeholders in making an SME company innovative and competitively sustainable.The influence of the role of leadership, the influence of organisational culture on performance and their relationships and collaborations within companies and with others towards competitiveness and innovation is explored in this study. However, the author felt that whilst previous research were interesting, they did not fully explain the nature of innovation and its relationship to the ability of a company to achieve a sustainable competitive advantage. It is for this reason the author wished to put extant literature to one side and take a fresh look at innovation from the perspective of companies that had a successful innovative culture and had achieved sustainable growth through a strong track record of innovation.This research treats the innovation phenomena holistically and draws on the stories and views of company managers to develop insights into the true nature of a strong innovative culture and it relationships with sustainable competitive advantage from the perspective of the managers building the strategy and the culture of the company. The findings of this research are explained in the formulated theory which highlights the importance of creating innovative leadership, innovative structure and culture and innovative relationships and collaboration capabilities. These elements are linked by an open organisational mindset, effective internal and external relationships and proactive and supportive knowledge systems and resourcing to create a culture of innovation
