The Impact Of Strategic Orientation On Product Innovation And Performance In Ghanaian SME's

Although the economic role and value of small and medium scale enterprise‘s in the Ghanaian economy is much recognized,much is left to be desired about relative to the impact of strategic orientation on product innovation to spur on performance in such dynamic environment.Factually,strategic orientation potently represents an important catalyst for firm performance.This research suggests that the mere adoption of strategic orientation alone is inadequate but the adoption of the entrepreneurial orientation and market orientation as an interactive model effect on product innovation gives better understanding to performance as an outcome benefit.The research topic is grounded in some facts associated to the research setting.Small and medium scale enterprise may not necessarily be small,but t hey are goal oriented,persistent and most especially passionate.As a business it is that passion that makes SMEs the drivers of Ghana‘s economy,contributing up to 46% of total employment.Sadly,most SMEs struggle to survive in their first two years of business because they sometimes lack funding,access to market but most especially because they lack the right business training,mentorship and strategic choices.This is where the remit of this research comes to the fore,to provide practical and academic contribution to industry in order to empower SMEs to build appropriate capacity and training needed because every time a small business succeeds,jobs are created,opportunities opened and the economy improves.This is because there is a link between economic development and innovation.This research is hinged on a particular focus.Inadequate studies on the interaction between strategic orientation and performance of SME‘s within transitional economies in developing countries provides the research focus of the study.The research is aimed at achieving some objectives.It tries to find out the moderating roles of dynamic and competitive environment on product innovation in delivering business performance.This will spur on the gains regarding private sector performance and economic development in the Ghanaian economy.These thematic areas surmise as the objectives of the study(1)Exploring the influence of entrepreneurial orientation and market orientation on product innovation.(2)Examining the interactive impact of entrepreneurial orientation and market orientation on product innovation and performance.(3)Investigating the moderating impact of market turbulence on the product innovation-performance nexus.(4)Examining the extent of the moderating impact of market turbulence on strategic orientation and product innovation for superior firm performance of SME‘s.The study attempts to explore the boundary conditions of firms‘ strategic orientation on performance,since available literature points to the fact that the beneficial effects of firms‘ strategic orientation may be context specific as against its universal applicability.This informed the basis of the following research questions in order to find solutions to the challenged facing SMEs.(1)What is the impact of strategic orientation(EO and MO)on product innovation that leads to performance of SMEs?(2)What is the existent interactive impact of EO-MO on product innovation?(3)Is there a degree of moderating influence of market turbulence on E O and MO that may impact market performance of SMEs?Based on ambidexterity theory,strategic fit theory and with an interactional perspective of the firm,the study examines the impact of strategic orientation on product innovation and performance in Ghanaian SME‘s.In clarifying the nature of impact product innovation has on performance,the study delves into the fit between business environment(in terms of market turbulence)and product innovation.The extent to which market turbulence as a contingency factor affects the impact of product innovation in delivering business performance is a demonstration of how it can moderate the relationship between product innovation and performance.The two main research theories aided the adoption of a conceptual mode l to reflect the possibility of SMEs possessing more strategic orientation and its impact on product innovation as a necessary strategy for managers in the research setting although this may not be applicable in a generalized term.From the conceptualized model the research generated eight(8)hypotheses of which seven(7)were confirmed and accepted while one(1)was denied and rejected.The research adopted a quantitative method for empirical analysis which aided in carrying out deep analysis of SMEs and the role of environmental factors to link two related but different streams of research in responding to the research call of clarifying the role of external and internal factors to achieve superior performance.The research used data of 132 SME‘s across multi-functional industries in Ghana with the aid of questionnaire survey tool for data collection from managers as targeted respondents after preliminary pre-test of the questionnaire tool which showed consistency.The data collected was used for research purposes other than those related to the solutions of the investigated problem.A multi-dimensional measurement instrument from exiting measures was adopted to measure the variables.The research analysis made use of the statistical package SPSS 23.0,AMOS 23.0 and STATA 15.0.The reliability and validity of each measure was examined using Cronbach‘s alpha.The descriptive of the research sample and characteristics was obtained through the usage of percentage and frequency.The refinement of the instrument for construct consistency and factor validation was achieved by the application of exploratory factor analysis(EFA)and confirmatory factor analysis(CFA).Discriminant and convergent validity was created by using the average variance extracted(AVE)and composite reliability(CR).In a structural equation modeling(SEM),a hierarchical equation modeling(HLM)was applied to test the hypotheses developed with the aid of the conceptual model.Finally,using path analysis,the interaction effect was plotted for full interpretation of results.The results generated revealed interesting implications which are beneficial to managers and society in solving peculiar challenges in the society.Interestingly,managers and owners are relatively young in age and this shifts the dependence on government for employment opportunities to private sector development for sustainable jobs and livelihood empowerment.There was a farther indication that:1)Entrepreneurial orientation is an important strategic orientation for SME s and therefore has an impact on product innovation and performance.A very essential strategy of the two orientations adopted in this research.2)Market orientation has a relative impact on product innovation compared to entrepreneurial orientation.The research indicated that market orientation is needed to compliment product innovation for performance in a turbulent market.However,although this strategic choice is plagued with firm inertia in some economies,this is not the case in Ghana.3)The possession of entrepreneurial orientation and market orientation has an interactive effect for SMEs in the research setting.Precisely,the interaction impact of product innovation on performance is positive and relative to market turbulence,the possession of multi strategic orientation impacts on product innovation for superior performance.Overall,the results indicates that the possession of not just one but more than one strategic orientation and its interaction,impacts positively on product innovation for better firm performance.Collectively all these strategic choices are impacted by market turbulence.4)Product innovation has an impact on firm performance.Although process innovation leads to product innovation,SMEs rather adopt product innovation as a strategic choice as a solution to the rampant changing taste of customers to increase sales and profitability since they have a specific market target.5)The contingency factor(market turbulence)implored in this research moderated and evidently strengthened the relationships of all the constructs.This means that mangers must note that though strategic choices are essential for performance it is important to incorporate the external market turbulence to strengthen the performance outcome.In discussing theoretical and practical implications,the possession of dual strategic orientation and its interactive effect is firmly postulated whiles possible areas of interest for further research has been duly identified.The study professes solution to SMEs to perform better and avoid the collapse of firms after few years of existence due to the lack of adopting appropriate strategic choices.