Innovation in Small Businesses: Culture and Ownership Structure Do Matter
Vol. Volume 8, Number 1 April/2003
Donald Gudmundson, C. Burk Tower, E. Alan Hartman
The empirical research presented in this article focuses on the relationships between ownership structure (family v. non-family), the type of customer served by the business, several dimensions of organizational culture and innovation in small businesses. The study posits that organizational culture, ownership structure and the type of customer are predictor variables for innovation. MANOVA and multiple regression were used in analyzing questionnaire data from 4264 individuals in 89 small businesses. The results indicate that initiation and implementation of innovation are related to aspects of culture and ownership. Organizational support was found to be more important for implementation than for initiation of innovation. Family businesses were found to have unique characteristics positively related to implementation. Finally, the cultural support for innovation was found to be related to the type of customer to which the firm sold and ownership structure. Small business managers are provided recommendations for improving firm innovativeness.