Innovation capability in achieving higher performance: perspectives of management and employees

Abstract

The study clarifies the issue of whether innovation capability has a positive effect on firm performance. The effects are analysed in the perspectives of management and employees. The study has been executed by conducting a web-based survey in Finnish Small- and medium-sized enterprises (SMEs). A total of 311 responses were received from a sample of 2400 randomly selected SMEs. The results show that three aspects of innovation capability, namely ideation and organising structures, participatory leadership culture, and know-how development, are related to firm performance. The results also reveal that managers and employees have different perceptions on what aspects of innovation capability affect performance.