INNOVATION AND BUSINESS PERFORMANCES: SMEs CASE STUDY

This study examined the relationship between innovations and SMEs business performances in a Malaysian context. It has two objectives, firstly to determine the relationship between organizational power, experience and culture, and commitment and innovation in Malaysian SMEs. Secondly, the objective was to investigate the moderating effect of participation in decision making and work effort on innovation and business performances. These two objectives were through a descriptive study based on a 60 Malaysian SME survey. The correlation analysis resulted from this study confirmed previous researcher observations that a link exists between higher organizational innovations, commitments, and higher business performance. The results suggest that among the three components of power, experience, and a cultural commitment to the organization, these were the most important predictors of innovations. Cultivating an organization’s power, experience, and culture would further enhance employees’ acceptance of, and alignment with, organizational goals that promote greater organizational commitment, this leading eventually to increases in innovations and business performances.