Managerial Issues
Name
Institution
Small and medium-sized enterprises (SMEs) are significant and pivotal to growing a vibrant economy. Business policy developers need to understand the factors that are relevant to SME performance. Two of the substantial and widespread factors that relate to that SME’s performance are networking and innovation. Therefore, it is vital to give these two aspects complete attention to establish the empirical and theoretical relationship. The theoretical and practical connection between the two elements should remain a particular thing in business practices. Much research has been carried out into the performance advantage of the networks and innovation and has increased the number of publications highlighting the performance benefits of the business methodological designs and innovation with empirical support. In the articles, model design is identified as a tremendous potential mechanism for unlocking and promoting the business process’s value, including creation and networking (Colombo et al., 2012). The articles present and highlight crucial empirical evidence that supports that assertion and establishes a more solid foundation for more development of business methodology with the dimensions of a firm.
SME performance
An empirical study by various researchers’ results on the innovation-performance connection has evidently shown that innovation has different relations to different measures. The variations in relational outcomes between innovation and various performance measures indicate a designer’s standard of performance, which attributes all aspects of SMEs. The multi-dimensional construct of innovation breadth is used as an independent variable in the study, including both products and services and process innovation and dependent variables. It helps to gain insights related to the gains that can be accrued from various types of innovation. As a key remedy, product innovations positively impact sales inventions while including innovation and networking. The design has to use the dependent variables to retrieve more benefits from various types of innovation (Colombo et al., 2012). Product innovations and are related to more sales increase while process innovation and networking have a direct connection with efficiency in SMEs’ business practices. Therefore, SMSs need to explore modern technical spaces that are more effective and efficient. The key challenges are pertained to human resources in terms of proficiency and skills and learning on a cost-sensitive small scale. There is also the challenge of research and development and absorbing new technological innovations. In this case, small businesses are identified as a crucial driving factor for design, and they have an innovative potentiality, just like big enterprises. Some of the factors prescribed could include networking and using regional centers, and having sensitive planning in developing strategies relevant to the business.
Innovation breath
Different scholars have acknowledged the relevance of diversity in innovative activities by drawing clear demarcations between the various innovations that include the products, market, process, input, and organizational innovations. Drawing close attention from Darwin’s theory of natural selection of adaptation in biological evolution, small businesses must develop revolutionary ideas of economic change to enhance and increase the chances of growth and expansion. Variations, diversity, mutations, and combinations offer natural selection as the foundation of biological evolution adjustment. In a similar case, diversification of products and athletic activities propels economic growth and evolution (Masalin., 2003). SMEs firms have to diversify their characteristics and experience, expressed in the total interaction within the industry. Therefore, SMSs firms have to actuate a change in routine practices and other diverse, innovative activities that include combining the routines in their business structure and rules. Innovation promotes the competitive advantage and has to be implemented by enforcing diverse competencies and regimes, promoting knowledge absorptive capacities, and developing network linkages needed to successfully develop and implement various innovations (Masalin., 2003). Close attention has to be paid to multiple aspects of the SMEs, including the administrative abilities, financial strengths, and social and human capital that can raise the extent of innovative activities that apply to different business functions that directly impact the SMEs’ performance and growth. Hence, the innovation extents as a measure of diversity in the creative processes reflect the broader usage of various sets of resources required for its enforcement. Diversity in firm innovation activity promotes the SME’s flexibility and adaptability with the prevailing market dynamics and pressures (Masalin., 2003). More emphasis is laid on identifying the firms’ specific competencies or abilities and resources in strategic development and implementation as the key determinates of the SME’s performance.
References
Colombo, M. G., Laursen, K., Magnusson, M., & Rossi‐Lamastra, C. (2012). Introduction: Small business and networked innovation: Organizational and managerial challenges. Journal of Small Business Management, 50(2), 181-190.
Masalin, L. (2003). Nokia leads to change through continuous learning. Academy of Management Learning & Education, 2(1), 68-72.