HOW DO EXTERNAL ENVIRONMENT AND INNOVATION MANAGEMENT AFFECT BUSINESS SURVIVAL?

Abstract

Business survival is crucial in today’s landscape, given the rapidly changing business
environment, whether in marketing style, business strategies, or technology. The objective of
this study is to determine whether components of external environment and innovation
management affect business survival – their ability to maintain their profitability and
competitiveness – especially in the context where mobile resources are used and, for innovating
organizations, where innovation is an important force that drives the business competitiveness.
This study quantitatively examined factors affecting business survivability. It used
questionnaires to collect data, surveying 200 business operators. Descriptive statistics and
structural equation modeling were used to analyze the collected data. Results showed that
factors constituting external environment, such as social conditions and changes in government
policies, affected an organization’s growth and survivability; and that factors constituting
innovation could augment business development and competitiveness by differentiating an
organization’s business. Hence, for a business to survive, it should encourage its operators to
be open to new ideas related to their expertise, adapt to suit changing market environment, and
strife for a higher level of business competitiveness.