THE ANTECEDENT AND CONSEQUENCE OF INNOVATION OF SMEs

Plubplueng  Sopatee; Watcharapong  Intrawong; Laddaporn  Kunkaew

Plubplueng Sopatee Graduate Student of Kasetsart University, Thailand
Watcharapong Intrawong Department of Business Management, Faculty of Liberal Arts and Management Science, Kasetsart University, Thailand
Laddaporn Kunkaew Department of Business Management, Faculty of Liberal Arts and Management Science, Kasetsart University, Thailand

Abstract

The objectives of this research were; firstly, to study the level of organizational dynamic, innovation, and business performance of Thai SMEs, secondly, to examine the differences in terms of organizational dynamic capabilities, innovation, and business performance of Thai SMEs when classified by organizational factors, thirdly, to investigate the influence of organizational dynamic capabilities on business performance through innovation. The focus target population includes SMEs entrepreneurs of Udon Thani province in Thailand, for a total of 1,037 enterprises. A sample was calculated according to the formula of Taro Yamane, and 400 samples were selected by proportional sampling and simple random sampling. Reliability testing was calculated by Cronbach's alpha coefficient values as follows; 0.915 of organizational dynamic capability, 0.945 of innovation and 0.864 of business performance. The statistics used for data analysis were frequency, percentage, mean, and standard deviation. The hypothesis has been tested by F-test (One Way ANOVA), Pearson product coefficient correlation, and Regression analysis.
The hypothesis testing: there was not difference in the level of organizational dynamic capability, innovation, and business performance when classified by organizational factors. The organizational dynamic capability can predict an innovation of 63.2%. Furthermore, it was found that the organizational dynamic capability presents a statistically significant positive influence on innovation by the standardized coefficients (β) was 0.795. For the second equation, organizational dynamic capability can predict a business performance of 54.2%, standardized coefficients (β) equals to 0.736. For the third equation, innovation can predict a business performance of 53.8% (adjusted R2 0.538). In addition, it was found that the innovation has a statistically significant positive influence on business performance by the standardized coefficients (β) was 0.734. Therefore, it can be concluded that the organizational dynamic capability had statistically significant positive influence on business performance through innovation of SMEs.