The art of orienteering small firms' innovation: Illuminating the link between innovation and strategy making

Purpose Even though innovation is widely understood as a critical success factor, little is still known about the top management ability to steer small firms’ innovativeness. In an attempt to fill such gap, the purpose of this paper is to investigate the relationship between strategic orientation and propensity to innovate of a representative sample of Italian small-sized organizations. Design/methodology/approach Secondary data collected from the Community Innovation Survey performed in Italy by the Italian Institute of Statistics were investigated. Data concerned a representative sample of 5.833 units of analysis. Ad hoc logistic regression models were designed to illuminate the relationship between small firms’ propensity to innovate and their strategic orientation. Findings The outputs of logistic regression models suggested that strategic aims, strategic goals and awareness of environmental threats influenced the propensity of small firms to innovate. On the one hand, the desire to expand the current market share and to open new markets aroused product innovation; on the other hand, the need to increase organizational flexibility boosted process innovation. Research limitations/implications This study relied on secondary data; therefore, it was not possible to tailor the process of data collection to the specific purposes of this research. Besides, findings are not generalizable at either the European or worldwide level. Originality/value This is one of the first attempts to exploit the potential of multiple logistic regression models to shed light on the relationship between small firms’ strategic orientation and their propensity to innovate.