The Relationship of Technological Innovation Capabilities and Business Innovation Capabilities on Organization Performance: Preliminary Findings of Malaysian Food Processing SMEs

Due to the increasing of global competitive pressure, shortened product life cycles and ease of imitation, organizations must continue to innovate to ensure the organization sustainability. One of the major factors contributing to organization sustainability is innovation. Previous studies have shown significant impact of organizational innovation capabilities on product and service quality. Literature has identified various types of innovation in organization. Among them are business innovation capabilities and technological innovation capabilities. In the Malaysian context, business and technological innovation capabilities-related research, particularly among food SMEs are still not comprehensive. Many studies have overlooked at the process of successful TIC building in the industrialization of developing countries. To address the gap, this current empirical research identifies the relationship of BIC and TIC components at 30 Malaysian food SMEs in northern area. Using case study approach, the questionnaires were distributed among the top and middle management level staff. A total of 30 respondents involved in the survey. Data were analyzed using descriptive and inferential techniques. The study found that, BIC and TIC have moderate relationship on organizational performance. Business innovation capability was found to have the most influential impact. The findings could help food SMEs particularly in order to increase the level of innovation. The paper finalizes with some conclusions for industry and other actors, and also future research.