The Impact of Environmental Uncertainty Dimensions on Organisational Innovativeness: An Empirical Study on SMEs

Abstract

The purpose of this study is to examine the effects of factors of environmental uncertainty on the innovativeness of small and medium enterprises (SMEs). Innovativeness is widely accepted as an important characteristic for firm competitiveness and it has been studied by both researchers as well as business managers. Environmental uncertainty is a measure of the complexity of changing external forces faced by an organisation and it crucially impacts the responses of organisations in order to stay competitive. Based on approaches in existing literature, this study conceptualises environmental uncertainty comprised three separate dimensions — competitive intensity, market/demand turbulence, technological turbulence. Data for the study were collected from 156 SMEs in Turkey. SMEs are regarded as an important ingredient in the economic growth of nations and especially so in developing nations such as Turkey. The findings of the study reveal that market/demand turbulence and technological turbulence have a positive effect on the innovativeness of SMEs. Interestingly and contrary to popular belief, competitive intensity was not found to have significant effect on an SME's innovativeness. The implication of the results from this research is that the degree of organisational innovativeness for SMEs tends to increase and therefore should be supported in environments with greater technological and market/demand turbulence. This research makes an important contribution to the developing body of innovation literature and provides directions for managers and researchers in influencing innovativeness of firms.