The Mediating Role of Frugal Innovation in the Relationship between Environmental Uncertainty and Organization Performance in Medium-Sized Enterprises (MSEs)
Main Article Content
Keywords
Environmental uncertainty, frugal innovation, organization performance, medium sized enterprises
Abstract
In the new global economy, marked by environmental uncertainty is an opportunity and a threat to businesses. Organization with greater innovativeness will be more successful in responding to changing environments and in developing new capabilities that allow them to achieve better performance. The objective of the study was to determine the mediation effect of frugal innovation on the relationship between environmental uncertainty and performance of medium sized enterprises in Kenya. To test the current study hypothesis, we apply linear regressions. Sample sizes of 291 firms were selected using stratified and simple random sampling techniques. Data was collected using structured questioners and items anchored on a five-point likert scale. The results showed that environmental uncertainty had a positive and significant effect on organization performance, and environmental uncertainty had a positive and significant effect on frugal innovation. Additionally, frugal innovation had a positive and significant effect on organization performance. Lastly, frugal innovation had a mediating effect on the relationship between environmental uncertainty and organization performance. The study concludes that environmental uncertainty and frugal innovation are determinants of organization performance. Hence, frugal innovation in conditions of high environmental uncertainty is related to new product and high organization performance. This study offers insights to managers and practitioners dealing with network services, showing the potential benefits of competitive strategies while facing the initial phases of the dissemination process.
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