Strategic Orientations and Innovation in Resource-constrained SMEs of an Emerging Economy

Abstract

While previous research has explored the linkages of strategic orientations and innovation for large businesses of developed economies, relatively little is known about these linkages for SMEs of emerging economies. To study these linkages, data were collected from owners or senior executives of 162 manufacturing SMEs in the Punjab region of India. Our results show that while customer orientation has been found to enable innovation for large firms, it does not directly facilitate innovation for Indian SMEs. The customer-oriented SMEs create successful innovation through better utilisation of their dynamic resources. Therefore, creation of dynamic resources by SMEs is more critical than that of unique resources for successful innovation. Implications of our findings are discussed for theory as well as practice.