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The relationship between innovation capability and performance

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  • Minna Saunila
  • Sanna Pekkola
  • Juhani Ukko

Abstract

Purpose - – The purpose of this paper is to discuss whether performance measurement moderates the relationship between innovation capability and firm performance. Design/methodology/approach - – The study was conducted through a web-based survey in small- and medium-sized enterprises (SMEs). A total of 311 responses were received from a sample of 2,400 randomly selected SMEs. Findings - – Consistent with predictions, the link between innovation capability and firm performance is significant in the presence of performance measurement. Performance measurement can thus be used as a tool for improving the performance of SMEs through innovation capability. Practical implications - – Using the results of this study, practitioners can improve their innovation capability through performance measurement by taking better account of various aspects. Originality/value - – Previous research has studied the effects of performance measurement, but not in the area of innovation management. Previous research has also showed that measurement has positive effects on innovation capability. The present study goes one step further by investigating the impacts of measurement on the relationship of multiple aspects of innovation capability and firm performance.

Suggested Citation

  • Minna Saunila & Sanna Pekkola & Juhani Ukko, 2014. "The relationship between innovation capability and performance," International Journal of Productivity and Performance Management, Emerald Group Publishing Limited, vol. 63(2), pages 234-249, January.
    • Handle: RePEc:eme:ijppmp:v:63:y:2014:i:2:p:234-249
    DOI: 10.1108/IJPPM-04-2013-0065
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    Citations

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    Cited by:

    1. Jorge Ferreira & Sofia Cardim & Arnaldo Coelho, 2021. "Dynamic Capabilities and Mediating Effects of Innovation on the Competitive Advantage and Firm’s Performance: the Moderating Role of Organizational Learning Capability," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 12(2), pages 620-644, June.
    2. Mohsin Shafi & Yongzhong Yang & Zobi Khan & Aixian Yu, 2019. "Vertical Co-operation in Creative Micro-Enterprises: A Case Study of Textile Crafts of Matiari District, Pakistan," Sustainability, MDPI, vol. 11(3), pages 1-16, February.
    3. Dao H. Duong & Fredric W. Swierczek, 2019. "The Impact of Top Management Team and Organizational Culture on Product/Service and Process Innovation in Vietnamese Banks," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 9(2), pages 1-3.
    4. Yongzhong Yang & Mohsin Shafi, 2020. "How does customer and supplier cooperation in micro-enterprises affect innovation? Evidence from Pakistani handicraft micro-enterprises," Asian Business & Management, Palgrave Macmillan, vol. 19(5), pages 530-559, November.
    5. Timur Pasch, 2019. "Strategy and innovation: the mediating role of management accountants and management accounting systems’ use," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 30(2), pages 213-246, July.
    6. Nor Asiah Omar & Muhamad Azrin Nazri & Syed Shah Alam & Azhar Ahmad, 2016. "Assessing the Factors Influencing Service Innovation Capabilities and Performance," Information Management and Business Review, AMH International, vol. 8(4), pages 52-63.
    7. Olusesan Michael Awoleye & Olugbenga Matthew Ilori & Timothy Oyedepo Oyebisi, 2019. "SOURCES OF INNOVATION CAPABILITY AND PERFORMANCE OF ICT AGGLOMERATED MSMEs IN NIGERIA," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 24(04), pages 1-33, June.
    8. Wilson, Grant Alexander & Case, Tyler & Dobni, C. Brooke, 2023. "A global study of innovation-oriented firms: Dimensions, practices, and performance," Technological Forecasting and Social Change, Elsevier, vol. 187(C).
    9. Hong, Jiangtao & Liao, Yi & Zhang, Yibin & Yu, Zhefu, 2019. "The effect of supply chain quality management practices and capabilities on operational and innovation performance: Evidence from Chinese manufacturers," International Journal of Production Economics, Elsevier, vol. 212(C), pages 227-235.
    10. Bui Quang Hung, Trinh Thuy Anh and Nguyen Ngoc Thong, 2020. "Innovation: From Capabilities to Performance in Manufacturing Enterprises in Vietnam," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 45(1), pages 61-81, March.
    11. Mukhamad Najib & Abdul Aziz Abdul Rahman & Farah Fahma, 2021. "Business Survival of Small and Medium-Sized Restaurants through a Crisis: The Role of Government Support and Innovation," Sustainability, MDPI, vol. 13(19), pages 1-16, September.
    12. Akinwumi Ojo, Adeshina, 2022. "Impact of Technology, Product and Process Innovation on Business Performance of Small and Medium Enterprises," Multidisciplinary Journal of Management Sciences, Association of Forensic Accounting Researchers (AFAR), vol. 4(1), pages 107-121, January -.
    13. , Aisdl, 2016. "The Relationship between Innovation Capabilities and Efficiency of Foreign Invested Enterprises in Vietnam," OSF Preprints j78cs, Center for Open Science.
    14. Yongzhong Yang & Mohsin Shafi, 0. "How does customer and supplier cooperation in micro-enterprises affect innovation? Evidence from Pakistani handicraft micro-enterprises," Asian Business & Management, Palgrave Macmillan, vol. 0, pages 1-30.
    15. Marlenne G. Velazquez-Cazares & Anna M. Gil-Lafuente & Ernesto Leon-Castro & Fabio Blanco-Mesa, 2021. "Innovation capabilities measurement using fuzzy methodologies: a Colombian SMEs case," Computational and Mathematical Organization Theory, Springer, vol. 27(4), pages 384-413, December.
    16. Hassan Keshavarz & Akbariah Mohd Mahdzir & Hosna Talebian & Neda Jalaliyoon & Naoki Ohshima, 2021. "The Value of Big Data Analytics Pillars in Telecommunication Industry," Sustainability, MDPI, vol. 13(13), pages 1-36, June.
    17. Wang, Changfeng & Hu, Qiying, 2020. "Knowledge sharing in supply chain networks: Effects of collaborative innovation activities and capability on innovation performance," Technovation, Elsevier, vol. 94.
    18. Rashidah Binti Mohamad Ibrahim & Abasiti Victor Abraham & Wan Abd Aziz Bin Wan Mohd Amin, 2021. "Evaluation of Small and Medium Sized Enterprise Innovation Performance Growth in Malaysia," International Journal of Business and Management, Canadian Center of Science and Education, vol. 13(10), pages 161-161, July.
    19. Małgorzata Kosała, 2015. "Innovation Processes as a Stimulant of Internationalisation Process of Firms," Entrepreneurial Business and Economics Review, Centre for Strategic and International Entrepreneurship at the Cracow University of Economics., vol. 3(2), pages 65-84.
    20. Agata Sudolska & Justyna Łapińska, 2020. "Exploring Determinants of Innovation Capability in Manufacturing Companies Operating in Poland," Sustainability, MDPI, vol. 12(17), pages 1-21, August.
    21. Daniel Rusu, 2021. "The Performance Of Sme Innovation Determined By The Technological Capability And Collaboration," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 6, pages 135-148, December.
    22. Daniel RUSU & Doriana SANDU & Maria FRANGIEH, 2020. "Aspects of Innovation and Leadership in Small and Medium Enterprises," REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 21(5), pages 659-673, December.
    23. Karani Beth Mbore, 2021. "Effect of entrepreneurship education on innovation capability of technical and vocational and education training (TVET) graduates in Kenya," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 10(3), pages 490-500, April.
    24. Mahmoud M. Migdadi & Mohammed K. Abu Zaid & Mohammed Yousif & Ra’d Almestarihi & Khalil Al-Hyari, 2017. "An Empirical Examination of Knowledge Management Processes and Market Orientation, Innovation Capability, and Organisational Performance: Insights from Jordan," Journal of Information & Knowledge Management (JIKM), World Scientific Publishing Co. Pte. Ltd., vol. 16(01), pages 1-32, March.
    25. Nur Faliza, 2016. "CSR and Islamic Banking Performance in Aceh: The Role of Innovation as Mediation ," GATR Journals jmmr116, Global Academy of Training and Research (GATR) Enterprise.

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