Academic journal article Management : Journal of Contemporary Management Issues

How to Improve Innovativeness of Small and Medium Enterprises

Academic journal article Management : Journal of Contemporary Management Issues

How to Improve Innovativeness of Small and Medium Enterprises

Article excerpt

Small and medium enterprises cannot avoid the global economy and its demand for innovative business as a precondition for competitiveness. Given their small size and related pool of professionals, small and medium enterprises need to work very hard on their staff's innovativeness and related personal traits. Making a small and medium enterprise successful must be considered as an invention-innovation-diffusion process that tackles both the businesses mix of the given size, and the small and medium enterprise as an entrepreneurial achievement. Thus, all preconditions concerning both the content and the process of innovation must be considered, which requires the requisite holism and, therefore, systemic rather than one-sided thinking/behavior of the usual specialists. Hence, values/culture/ethics/norms of owners, entrepreneurs, managers and their co-workers must also be innovated along with their knowledge. Then, interdisciplinary creative cooperation can result from cultural and professional differences.


An organization is not only a business system (BS), which it is when the selected viewpoint of dealing with it exposes its business attributes. Called with different names (such as firm, enterprise, company), BSs became very influential institutions of the modern age (Schumpeter, 1934; Kuratko, 2008). Since the great majority of BSs are small and medium enterprises (SMEs), it is almost impossible to reach any goal in society without engaging also the SMEs (Hebert, Link, 1989; Fink, Kraus, 2009). Currently, in Europe, about 99 % of all enterprises are SMEs, employing beyond 50 % of employees (Potocan, Mulej, 2007; Potocan, 2008). Demands over SMEs, too, have developed from efficiency by synergetically adding quality, range, uniqueness, and sustainability in recent decades (Collins, Porras, 1994; Collins, 2001; Potocan, Mulej, 2007). This requires innovations all the time.

Innovation is defined as every novelty found beneficial in the experience of its users (Affuah, 1998; Rogers, 2003; EU, 2006). Or, in other words: Innovation = invention + commercialization (Affuah, 1998).

Business practice proves that innovative business (= business style based on innovation rather than routine) tends to yield much more value added than a routine-based one. It is especially crucial as a way out of the economic crisis of 2008. Therefore, the modern BSs face two important challenges, at least: how to satisfy demanding customers' requirements, and how to make their own business requisitely innovative to make customers happier with it than with competitors' supplies.

The synergy of findings from the research of both challenges says that one-sided professionals / humans fail to perceive that success depends on systemic thinking based on interdisciplinary creative cooperation. It is helpful to develop and maintain the innovativeness and creative cooperation of all organizational members.

Therefore, SMEs must create and implement a requisitely holistic development like or even more than the bigger enterprises. Meeting these requirements depends on influential humans, not only on the institutional order alone. Thus, most SMEs must innovate their management style, including the application of the ethics of interdependence within the organization, in the market, and in society at large. Thus, it makes sense to consider the human part of preconditions of the innovative business in SMEs as BSs.

However, if we wish to understand the human part, we must take into consideration the mutual interdependence and synergetic entity of personality traits, professional cultures, job cultures, department cultures, cultures prevailing in organizations, local communities, regions, nations, and beyond their borders. In this framework, it is the ethics of inter-dependence, which provides (also) the bases for innovativeness of BSs, including SMEs.

We discuss, here, the issue of improving the level of innovativeness on the basis of knowing: the role and the meaning of contemporary economics, i. …

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