Moderating Effect of Strategic Improvisation on product Innovation and Performance of Manufacturing SMEs

Abstract

In a dynamic, complex and competitive business environment, it is vital for business organisations including manufacturing SMEs to improve product innovation capabilities and increase creativity and spontaneity in order to deal with uncertainties associated with intensity and frequency of changes in the environment. This study attempts to investigate the effects of product innovation on performance of manufacturing SMEs in an emerging economy and examine the role of strategic improvisation on product innovation and performance. Data for the study was collected from 182 owners/managers of manufacturing SMEs in Nigeria. The collected data was analysed using correlation and regression techniques. Findings of the empirical study indicate that the coefficient for product innovation is positive and significant for firm performance. However, the result shows that the interaction term between product innovation and strategic improvisation is not significant in predicting firm performance. Therefore, firms can build and enhance their performance using product innovation capabilities regardless of the present or absent of strategic improvisation in the organisation. This study provides implications for managers, entrepreneurs and government in finding the right way to performance through adopting product innovation.