Risky combination: the role of managerial perceptions of social media use and entrepreneurial orientation on SME innovation
Date
2023-01-17Author
Brooks, Stoney
Sahaym, Arvin
Datta, Avimanyu
Srivastava, Smita
Metadata
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Brooks, S., Sahaym, A., Datta, A. and Srivastava, S. (2023), "Risky combination: the role of managerial perceptions of social media use and entrepreneurial orientation on SME innovation", Management Decision, Vol. 61 No. 1, pp. 33-56. https://doi.org/10.1108/MD-03-2021-0385
Abstract
Purpose – This study examines the conditions when “managerial perception of the contribution of social
media” (SMC) enhances and inhibits entrepreneurially oriented small and medium-size enterprises’ (SMEs’)
ability for new product introductions (NPI) to the market. We also propose that while firm proactiveness
enhances the rate of NPI, managers’risk-taking attitude hurts the process even when managerial perceptions of
social media use are high.
Design/methodology/approach – This study uses the survey data collected from 322 SMEs in the US to
examine the theoretical model. By adopting the partial least square (PLS-SEM) technique, the direct and
moderating effects among the SMC, proactive behavior and risk-taking attitude on NPI are explored under
dynamic and stable market conditions.
Findings – Empirical findings show that although SMC has a significant positive influence on the rate of NPI
in case of SMEs’, if the managers are risk-takers themselves, then social media use can distract them, make
them overly adventurous trying to introduce too many products and hurt SMEs’ innovation efforts with less
NPI. We show that SMEs’ entrepreneurial orientation (EO) has a differential impact on SMC-NPI relationship,
especially in dynamic market conditions.
Practical implications – The findings provide practical evidence that SMEs get benefitted when their
managers perceive that the contributions from social media are positive for their firm. Contrary to the prior
understanding of high risk and high return, managers’ risk-taking attitude hurts SMEs innovation efforts.
SMEs being resource-constrained, it is practically vital for them to be taking less risk while developing new
products.
Originality/value – This research synthesizes the insights of the new and emerging “Strategy-as-practice
view” and “Behavioral theory of the firm” to empirically examine how managerial perceptions on social media
use shape firms’ key strategic activity, NPI. This research also highlights the dark side of firm characteristics,
such as managerial risk-taking attitude for SMEs.
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