Amanating the Key Factors of Innovation Performance: Leveraging on the Innovation Culture Among SMEs in Malaysia

Innovation has become an approach to create value to customer in order to remain competitive in the market. However, previous research on innovation performance particularly among Bumiputera SMEs had received little intention. Hence, Bumiputera SMEs need to inculcate the innovation culture in order to generate innovation performance. As such, the purpose of this study is to examine the ambidextrous orientation and innovation strategy on innovation culture; and how innovation culture could mediate the relationship between ambidextrous orientation and innovation strategy and innovation performance. In addition, this study also examines the role of government support as the moderator between innovation culture and innovation performance. Data were collected from 140 Bumiputera SMEs and analyzed using partial least square-structural equation modelling via Smart PLS. Findings indicated that ambidextrous orientation (alignment and adaptability), innovation strategy (proactive creativity strategy and growth risk orientation strategy) had significant impact on innovation culture. Besides, innovation culture mediated the relationship between alignment, proactive creativity strategy, growth risk orientation strategy and innovation performance. However, innovation culture did not significantly mediate the relationship between adaptability and innovation performance. This study makes both theoretical and practical contributions, especially in identifying the significant role of Bumiputera SMEs in creating innovation culture. Besides, government support plays an important role in strengthening the relationship between innovation culture and innovation performance. Limitations of the study are explained and suggestions for future study are also presented.