The Effect of Innovation Types on the Performance of Small and Medium-Sized Enterprises in the Sekondi-Takoradi Metropolis

Abstract

Innovativeness! has! been! touted! as! one! of! the! fundamental! instruments! of! growth!strategies!to!enter!new!markets,!to!increase!the!existing!market!share! and! to! provide! the! company! with! a! competitive! edge.! Despite! this! acknowledgement,!there!is!lack!of!research!into!how!innovation!contributes!to! the!performance!of!small!and!medium!sized!enterprises.!The!aim!of!this!study! was!to!investigate!the!influence!of!innovation!on!organisational!performance!of! small! and! mediumDsized! enterprises! (SMEs)! in! the! SekondiDTakoradi! metropolis.!The! research! design! used!was! survey! research! design!whilst! the! research! approach! was! quantitative! research! approach.! Simple! random! sampling!technique!was!used!to!collect!data!from!243!owners/owner!managers! of! SMEs! in! the! SekondiDTakoradi! Metropolis! through! selfDadministered! questionnaires.!Partial!least!squares!(PLS)!structural!equation!modelling!(SEM)! was! used! to! test! the! hypotheses! postulated.!The! study! revealed! that! all! four! different! types! of! innovation! significantly! influence! organisational! performance! positively,! except! the! product! innovation/organisational! performance! relationship,!which!was!positive!but! not! significant.!The! results! also!suggest!that!innovation!accounted!for!more!than! fifty!one!percent!of!the! variation!in!organisational!performance.! It!was,!therefore,!recommended!that! managers! of!SMEs!pay! critical! attention! to! the!implementation! of! innovation! activities!in!their!firms!due!to!its!positive!impact!of!performance.!