The Impact of Organizational Innovation on the Performance of Small and Medium-Sized Enterprises (SMEs) in Ilorin Metropolis

Abstract

This research paper explores the intricate relationship between organizational innovation and the performance of Small and Medium-sized Enterprises (SMEs). SMEs are critical contributors to economic growth and development, but they often face resource constraints and dynamic market pressures. Organizational innovation presents a strategic avenue for SMEs to thrive in such environments. This paper defines organizational innovation, discusses its various types, identifies drivers, and examines its benefits and challenges in the context of SMEs. Additionally, it delves into strategies for promoting organizational innovation and offers insights into performance measurement and continuous improvement. A questionnaire was used to collect primary data from 200 respondents aged 20 to 60 years above using a convenient sampling technique. Both descriptive and inferential statistics were used for data analysis. Results of the findings show that there is a significant relationship between Product Innovation and performance of SMEs (r = .344**, N= 200, P < .01); that there is a significant relationship between Process Innovation and performance of SMEs (r = .354**, N= 200, P < .01); that there is a significant relationship between Marketing Innovation and performance of SMEs (r = .354**, N= 200, P < .01). It was concluded that organizational innovation variables (Product innovation, process innovation and marketing innovation) will jointly and independently predict performance of SMEs and however recommends that SMEs must invest in gathering market demand, trends, competitors, and sources of innovation before making decisions.