The Impact of Environmental Turbulence on Product Innovation in Small to Medium Enterprises in Harare, Zimbabwe

Abstract

The purpose of the research was to examine the impact of environmental turbulence on product innovations in small to medium enterprises (SMEs). In the study environmental turbulence consisted of five dimensions namely, supplier turbulence, technological turbulence, market turbulence, regulatory turbulence and competitive intensity. A cross-sectional quantitative research design was adopted in the study. The study sample was drawn from a pool of 3,000 SMEs both unregistered and registered with the Ministry of Small and Medium Enterprises in Harare, Zimbabwe. In the study, a total of 200 completed surveys were obtained and analysed. To analyse the research data SPSS23 was utilised. Regression analysis was carried out to establish the cause-and-effect relationship between the independent and dependent variables in the study. The findings of the study showed that technology turbulence and competitive intensity had a statistically significant positive impact on product innovation. Market turbulence was noted as having a statistically significant negative impact on product innovativeness. The main implications established in the study were that SMEs should introduce mechanisms to manage and mitigate market, supplier and regulatory turbulence to ensure that their levels of product innovativeness remain positive.

Managing environmental turbulence through innovation speed and operational flexibility in B2B service organizations

“…To further understand the results, we delved deeper into the findings of two studies in the manufacturing context using environmental turbulence as the antecedent to innovation (Zimuto et al, 2018). Zimuto et al (2018) found that CI had the greatest association with innovationmarket innovation was higher in more competitive environments. In our service context, CI was negatively associated with innovation speed.…”

“…The more competitive the environment, the more likely that firms will try to find ways to increase their ability to read the environment, make rapid decisions on how to respond and accelerate the product development cycles as a basis for competitive advantage (Porter, 1979;Van Riel et al, 2004). CI has been found to have the greatest positive influence of the three environmental forces on innovation in manufacturing environments (Zimuto et al, 2018). The level of competitive activity forces B2B service firms to increase the speed of innovation (as well as service delivery efforts) to affect customer needs and stimulate new demand (Baddar-Alhussan et al, 2017): H4.…”

“…CI is positively related to innovation speed. MT has been found to have a negative or non-significant influence on innovation in manufacturing environments (Abdallah and Persson, 2014;Zimuto et al, 2018). The innovation process for a service firm in turbulent markets must be more adaptable and agile to meet customer demand (Menor et al, 2002, p. 149).…”

“…Hypercompetitive markets create urgency "for continuous, fast and effective innovation," generating technological intensity that yields shortened service life cycles and a high risk of innovation failure (Van Riel et al, 2004, p. 348). TT has been found to positively influence innovation in manufacturing environments (Abdallah and Persson, 2014;Zimuto et al, 2018). The level of TT in service accelerates the pace and success of innovation (Greenley, 1995;Indounas, 2015;Tsai and Yang, 2014;Wu et al, 2017).…”

“…Theory suggests that environmental turbulence should impel more innovation (O'Cass and Weerawardena, 2010). Previous research has examined the role of three environmental forcescompetitive intensity (CI), technological turbulence (TT) and market turbulence (MT)in influencing firm and new product innovation (Abdallah and Persson, 2014;Jaworski and Kohli, 1993;Tsai and Yang, 2014;Voss and Kock, 2013;Zimuto et al, 2018). Most studies examine some combination of the three environmental forces as moderators (Andotra and Gupta, 2016;Chen et al, 2016;Gonz alez-Benito et al, 2014;Jaworski and Kohli, 1993;Tsai and Yang, 2014;Voss and Kock, 2013), while only a few others have examined them in an antecedent role (Boeker and Goodstein, 1991;Zimuto et al, 2018).…”