Innovation in SMEs : a case study in Thailand

Abstract

Innovation has long been accepted as instrumental to company success. As a result, it has been explored and studied by the business and management literature for several decades. However, very little research has been done specific to Thai SMEs, although innovation is likely to be affected by different national cultures.

This case-study research looks at Thai SMEs in order to develop a basic understanding of their innovation concepts and processes, and to investigate the influences of five factors - Environmental Uncertainty, Innovation Characteristics, Attitude and Commitment to Change, Structural Characteristics, and Resources - and Hofstede's Thai cultural characteristics on their innovation process. It aims to benefit Thai SMEs in terms of self analysis for improving their management practices and strategies to achieve company success and sustainability. It may benefit the Thai government as well, since it may help the government develop appropriate national plans and activities to help Thai SMEs succeed, and thus reduce the unemployment rate and sustain the commercial life of Thailand.

Literature on innovation and some related issues, such as creativity and its definition, stages of the innovation process, factors affecting the process, and Hofstede's five cultural dimensions are reviewed in order to develop the framework of this study. In-depth interviews, observations and document reviews were conducted in a medium-sized roller shutter manufacturer in Thailand. All the five factors and four Thai cultural dimensions - Collectivism, High Power Distance, Femininity, and Strong Uncertainty Avoidance – were found to affect the innovation process in this study. A potential schematic diagram illustrating their relationships with the innovation process is also revealed. This leads to the idea that Thai SMEs are less likely to produce or adopt innovations effectively. Finally, this study discusses its limitations and some ideas for future research.