Risks and Uncertainties in Micro and Small Enterprises' Decision to Innovate
Keywords:
Risks and Uncertainties, Hammond, Keeney and Raiffa's (1999) Risk Factors, Decision Taking, Open Innovation, Micro and Small Enterprises.Abstract
The decision to innovate involves risks and uncertainties and is among the difficult decisions that businesses need to take in their organizational evolution. In this context, the MSEs, for detaining financial constraints in their very own structure, often find themselves and their actions limited and become lesser innovative companies. Given this, one of the alternatives that is presented to these companies is the open innovation model, based on the use of external knowledge in order to add value to the organization, since learning and mutual interaction among a company and its various agents, fostered by the model, allow the sharing of risks and uncertainties and may confer the necessary skills to innovate dynamically and continuously. In this article we analyze how the use of the open innovation model by micro and small enterprises may reduce the risks and uncertainties in the decision to innovate, starting from Hammond, Keeney and Raiffa's (1999) analysis of risk factors to verify the uncertainties, outcomes, probability of occurrence and consequences of the decision taken. This is an exploratory qualitative study, using semi-structured interviews and literature review. The results show that as micro and small enterprises go through critical times in their organizational performance, seek in the innovation an alternative for survival ahead of new parameters that are imposed on them. However, as these companies have uncertainties associated with the decision to innovate the lack of knowhow and insufficient capital to afford the cost of innovation. To reduce these uncertainties, they seek in the external sources of knowledge the financial, technological, market and competitive support that enable them to innovate and achieve sustainable competitive advantages, having as the results of such innovation model the overcoming of uncertainties, the launching of product, service and process innovations, and improvement of their competitive potential and the formation of an innovation process. Thus, it can be argued that the use of the open innovation model not only reduces the risks and uncertainties related to innovation but also helps those organizations to innovate and improve their organizational performance.
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