Innovation and Performance of Small and Medium-sized Bakeries in Tanzania

Authors

  • Kafigi Jeje Institute of Accountancy Arusha

Abstract

Small and Medium-sized Enterprises in Tanzania are still facing numerous challenges that have been affecting their competitiveness. To a great extent, literature has confirmed that innovation is a major driver of their competitiveness. One of the major challenges facing the owners or managers of these enterprises is the failure to understand and employ the right innovation strategies that can drive their performance. The performance of SMEs has a significant contribution to the socioeconomic development of many economies such as Tanzania where agriculture is one of the leading sectors. Enabling direct or indirect players in the agriculture sector such as the food enterprises, impacts the economy. We therefore characterise innovation as enhanced innovation process, customer-focused innovation, and enhanced innovation environment, and find whether they influence sales, and output performance of small and medium-sized bakeries. Our study adopts a multi-stage sampling technique and received responses from 161 questionnaires, and 20 in-depth interviews from bakery owners/managers throughout Tanzania. Through a moderator analysis, we find that both human resource competency and the size of the bakery moderate the relationship between innovation strategies and bakery performance. We argue that SMEs need to enhance their innovation capabilities in order to compete. Nevertheless, such capabilities should be supported by the innovation commitment of SMEs, and the policy development practices in the internal and external business environments.

Author Biography

Kafigi Jeje, Institute of Accountancy Arusha

Department of Business Management

References

Al Mamun, A. (2018). Diffusion of Innovation among Malaysian Manufacturing SMEs. European Journal of Innovation Management, 21 (1), 113-141.

Almeida, F. (2018). Strategies to Perform a Mixed Methods Study. European Journal of Education Studies, 5 (1), 137-151.

Amabile, T. M. (1988). A Model of Creativity and Innovation in Organizations. In B. M. Staw, & L. L. Cummings (Eds.), Research in Organizational Behavior (Vol. 10, pp. 123-167). Greenwich, CT: JAI Press Inc.

Amabile, T. M. (1996). Creativity in Context. Boulder, CO: Westview Press.

Amabile, T. M. (1997). Motivating Creativity in Organizations: On Doing What You Love and Loving What You Do. California Management Review, 40 (1), 39-58.

Andries, P., & Czarnitzki, D. (2014). Small Firm Innovation Performance and Employee Involvement. Small Business Economics, 43 (1), 21-38.

Barcellos, M. D., Aguiar, L. K., Ferreira, G. C., & Vieira, L. M. (2009). Willingness to Try Innovative Food Products: A Comparison between British and Brazilian Consumers. Brazilian Administration Review, 6 (1), 50-61.

Baskar, P., & Rajkumar, K. R. (2015). A Study on the Impact of Rewards and Recognition on Employee Motivation. International Journal of Science and Research, 4 (11), 1644-1648.

Bayarçelik, E. B., Taşel, F., & Apak, S. (2014). A Research on Determining Innovation Factors for SMEs. Procedia - Social and Behavioral Sciences, 150, 202-211.

Behera, S. M., & Srivastav, P. P. (2018). Recent Advances in Development of Multi Grain Bakery Products: A Review. International Journal of Current Microbiology and Applied Sciences, 7 (5), 1604-1618.

Ben Youssef, A., Hadhri, W., & M’Henni, H. (2011). Intra-Firm Diffusion of Innovation: Evidence from Tunisian SMEs Regarding Information and Communication Technologies. Middle East Development Journal, 3 (1), 75-97.

Bennett, B., Naziri, D., Mahende, G., & Towo, E. (2012). Driving Demand for Cassava in Tanzania: The Next Steps. Natural Recourse Institute, University of Greenwich.

Bon, A. T., & Mustafa, E. M. (2014). The Impact of Customer Focus on Innovation in Service Organizations. Journal of Engineering and Technology, 5 (1), 57-67.

Boonsiritomachai, W., McGrath, G. M., & Burgess, S. (2016). Exploring Business Intelligence and Its Depth of Maturity in Thai SMEs. Cogent Business & Management, 3 (1), 1-17.

Bozkurt, Ö. Ç., & Kalkan, A. (2014). Business Strategies of SME’s, Innovation Types and Factors Influencing Their Innovation: Burdur Model. Ege Academic Review, 14 (2), 189-198.

Brody, A. L., Bugusu, B., Han, J. H., Sand, C. K., & Mchugh, T. H. (2008). Innovative Food Packaging Solutions. Journal of Food Science, 73 (8), 107-116.

Burbiel, J. (2009). Creativity in Research and Development Environments: A Practical Review. International Journal of Business Science and Applied Management, 4 (2), 35-51.

Chiguvi, D., & Guruwo, P. T. (2017). Impact of Customer Satisfaction on Customer Loyalty in the Banking Sector. International Journal of Scientific Engineering and Research, 5 (2), 55-63.

Chiu, C.-Y., Chen, S., & Chen, C.-L. (2017). An Integrated Perspective of TOE Framework and Innovation Diffusion in Broadband Mobile Applications Adoption by Enterprises. International Journal of Management, Economics and Social Sciences, 6 (1), 14-39.

Chongela, J. (2015). Contribution of Agriculture Sector to the Tanzanian Economy. American Journal of Research Communication, 3 (7), 57-70.

Crespell, P., & Hansen, E. (2008). Work Climate, Innovativeness, and Firm Performance in the US Forest Sector: In Search of a Conceptual Framework. Canadian Journal of Forest Research, 38 (7), 1703-1715.

Dah, H. M., & Dumenya, A. (2016). Investigating Customer Feedback Channels in the Hotel Industry: the Case of Ho – Ghana. European Scientific Journal, 12 (26), 353-369.

Dai, L., Maksimov, V., Gilbert, B. A., & Fernhaber, S. A. (2014). Entrepreneurial Orientation and International scope: The Differential Roles of Innovativeness, Proactiveness, and Risk-taking. Journal of Business Venturing, 29 (4), 511-524.

Dechamp, G., & Szostak, B. (2016). Organisational Creativity and the Creative Territory: The Nature of Influence and Strategic Challenges for Organisations. M@n@gement, 19 (2), 61-88.

DeVellis, R. F. (2003). Scale Development: Theory and Applications (2nd ed.). Thousand Oaks: Sage Publications.

Dewydar, W. M. (2015). The Optimum Relationship between Managers and Employees. International Journal of Business and Social Science, 6 (8), 135-141.

Doran, J., & Ryan, G. (2017). The Role of Stimulating Employees' Creativity and Idea Generation in Encouraging Innovation Behaviour in Irish Firms. The Irish Journal of Management, 36 (1), 32-48.

Dut, V. V. (2015). The Effects of Local Business Environments on SMEs' Performance: Empirical Evidence from the Mekong Delta. Asian Academy of Management Journal, 20 (1), 101-122.

Dziallas, M., & Blind, K. (2019). Innovation Indicators throughout the Innovation Process: An Extensive Literature Analysis. Technovation, 80-81, 3-29.

ElMelegy, A. R., Mohiuddin, Q., Boronico, J., & Maasher, A. A. (2016). Fostering Creativity in Creative Environments: An Empirical Study of Saudi Architectural Firms. Contemporary Management Research, 12 (1), 89-120.

Fay, D., Shipton, H., West, M. A., & Patterson, M. (2014). Teamwork and Organizational Innovation: The Moderating Role of the HRM Context. Creativity and Innovation Management, 24 (2), 261-277.

Fischer, B. D., & Montalbano, N. (2014). Continuous Innovation from All Employees: An Underutilized Font of Organizational Improvement. American Journal of Management, 14 (3), 40-50.

Fjose, S., Grünfeld, L. A., & Green, C. (2010). SMEs and Growth in Sub-Saharan Africa:Identifying SME Roles and Obstacles to SME Growth. Oslo: MENON Business Economics.

Gans, J., Stern, S., & Wu, J. (2016). The Foundations of Entrepreneurial Strategy. SSRN Working Paper #2844843.

Ganta, V. C. (2014). Motivation in the Workplace to Improve the Employee Performance. International Journal of Engineering Technology, Management and Applied Sciences, 2 (6), 221-230.

Garzia, C. (2017). Innovation Diffusion and Bandwagon Effect: The Palm Oil in the Italian Bakery Industry. Proceedings of the 35th International Conference of the System Dynamics Society. Cambridge, Massachusetts: System Dynamics Society.

Gazem, N. A., & Rahman, A. A. (2013). Promoting the Systematic Innovation Process in Small and Medium Enterprises. Journal of Convergence Information Technology, 8 (11), 528-535.

Gebauer, H., & Kowalkowski, C. (2012). Customer‐focused and Service‐focused Orientation in Organizational Structures. Journal of Business & Industrial Marketing, 27 (7), 527-537.

Giménez-Bastida, J. A., Piskuła, M. K., & Zieliński, H. (2015). Recent Advances in Processing and Development of Buckwheat Derived Bakery and Non-Bakery Products – A Review. Polish Journal of Food and Nutrition Sciences, 65 (1), 9-20.

Gunday, G., Ulusoy, G., Kilic, K., & Alpkan, L. (2011). Effects of Innovation Types on Firm Performance. International Journal of Production Economics, 133 (2), 662-676.

Haiböck-Sinner, D., Ebner, A., & Lettmayer, G. (2008). A Methodology for SME Bakeries to Develop Innovative Sustainable Products and Services in a Participatory Process with their Stakeholders. Sustainable Consumption and Production: Framework for Action (pp. 103-108). Brussels: Sustainable Consumption Research Exchange (SCORE!) Network.

Hall, B. H., Lotti, F., & Mairesse, J. (2009). Innovation and Productivity in SMEs: Empirical Evidence for Italy. Small Business Economics, 33 (1), 13-33.

Harif, M. A., Hoe, C. H., & Ahmad, M. I. (2013). The Financial and Non-Financial Performance Indicators of Paddy Farmers’ Organizations in Kedah. World Review of Business Research, 3 (1), 80-102.

Hero, L.-M., Lindfors, E., & Taatila, V. (2017). Individual Innovation Competence: A Systematic Review and Future Research Agenda. International Journal of Higher Education, 6 (5), 103-121.

Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2007). Strategic Management: Competitiveness and Globalization (Concepts and Cases) (7th ed.). Thomson South-Western.

Holzmann, V., & Golan, J. (2016). Leadership to Creativity and Management of Innovation? The Case of the “Innovation Club” in a Production Company. American Journal of Industrial and Business Management, 6 (1), 60-71.

Ismail, A. I., Abdelrahman, S. E., & Majid, A.-H. A. (2018). Closing Strategic Human Resource Management Research Lacunas with Mediating Role of Employee Creativity. Academy of Strategic Management Journal, 17 (1), 1-18.

Jabłońska-Porzuczek, L., & Smoluk-Sikorska, J. (2016). Factors of Competitiveness of Enterprises Operating in the Confectionary-Bakery Industry in Wielkopolska Voivodship. Optimum. Studia Ekonomiczne, nr 6(84), 99-110.

Kalyani, M. (2011). Innovative Culture: An Intervention Strategy for Sustainable Growth in Changing Scenario. International Journal of Business Administration, 2 (4), 84-92.

Katua, N. T. (2014). The Role of SMEs in Employment Creation and Economic Growth in Selected Countries. International Journal of Education and Research, 2 (12), 461-472.

Khan, M. I. (2012). The Impact of Training and Motivation on Performance of Employees. Business Review, 7 (2), 84-95.

Kim, K. (2015). What Made a Bakery Franchise No. 1 in Korea? The Story of Paris Baguette and Its Success Factors. Journal of Marketing Thought, 2 (1), 14-26.

Klaas, B. S., Klimchak, M., Semadeni, M., & Holmes, J. J. (2010). The Adoption of Human Capital Services by Small and Medium Enterprises: A Diffusion of Innovation Perspective. Journal of Business Venturing, 25 (4), 349-360.

Klijn, M., & Tomic, W. (2010). A Review of Creativity within Organizations from a Psychological Perspective. Journal of Management Development, 29 (4), 322-343.

Klimczuk-Kochańska, M. (2017). Importance of Creativity of Employees in Adaptation of Food Companies to Innovative Trends in the World. Human Resources Management and Ergonomics, 11 (1), 50-64.

Krejcie, R. V., & Morgan, D. W. (1970). Determining Sample Size for Research Activities. Educational and Psychological Measurement, 30, 607-610.

Kyei, D. A., & Bayoh, A. T. (2017). Innovation and Customer Retention in the Ghanaian Telecommunication Industry. International Journal of Innovation, 5 (2), 171-183.

Lages, C. R., & Piercy, N. F. (2012). Key Drivers of Frontline Employee Generation of Ideas for Customer Service Improvement. Journal of Service Research, 15 (2), 215-230.

Landa, E. (2018). Influence of Training on Employees Performance in Public Institution in Tanzania. International Journal of Human Resource Studies, 8 (2), 324-336.

Lee, I. H., & Marvel, M. R. (2009). The Moderating Effects of Home Region Orientation on R&D Investment and International SME Performance: Lessons from Korea. European Management Journal, 27 (5), 316-326.

Lee, Y.-H., Hsieh, Y.-C., & Hsu, C.-N. (2011). Adding Innovation Diffusion Theory to the Technology Acceptance Model: Supporting Employees’ Intentions to use E-Learning Systems. Educational Technology & Society, 14 (4), 124-137.

Martínez-Monzó, J., García-Segovia, P., & Albors-Garrigos, J. (2013). Trends and Innovations in Bread, Bakery and Pastry. Journal of Culinary Science & Technology, 11 (1), 56-65.

Matopoulos, A., & Vlachopoulou, M. (2008). Identifying Innovation Strategies: Insights from the Greek Food Industry. 110th EAAE Seminar ‘System Dynamics and Innovation in Food Networks’. Innsbruck-Igls: European Association of Agricultural Economists (EAAE).

Mbizi, R., Hove, L., Thondhlana, A., & Kakava, N. (2013). Innovation in SMEs: A Review of Its Role to Organisational Performance and SMEs Operations Sustainability. Interdisciplinary Journal of Contemporary Research in Business, 4 (11), 370-389.

Melini, V., & Melini, F. (2018). Strategies to Extend Bread and GF Bread Shelf-Life: From Sourdough to Antimicrobial Active Packaging and Nanotechnology. Fermentation, 4 (1), 9.

Nam, T. H., Tuan, N. P., & Van Minh, N. (2017). Critical Successful Factors for Innovation in Vietnamese Firms. Journal of Industrial Engineering and Management, 10 (3), 522-544.

Neneh, N. B., & van Zyl, J. H. (2013). Achieving Optimal Business Performance through Business Practices: Evidence from SMEs in Selected Areas in South Africa. Southern African Business Review, 16 (3), 118-144.

Nguyen, M. Q., & Nguyen, P. V. (2013). The Impact of External Environment, Technology and Innovation Capacities, and Leadership Development on Organizational Performance in Food Industry. A Qualitative Study of Food Enterprises in Ho Chi Minh City, Vietnam. International Journal of Business, Humanities and Technology, 3 (4), 49-60.

Nicolescu, L., & Nicolescu, C. (2012). Innovation in SMEs – Findings from Romania. Economics & Sociology, 5 (2a), 71-85.

Nwewi, H. N., Onwuka, E. M., & Ogbotubo, E. (2017). Entrepreneurial Thinking and Competitiveness in Bakery Industry in Delta State of Nigeria. International Journal of Business, Management and Social Research, 4 (1), 192-197.

Ojeleye, Y. C. (2017). The Impact of Remuneration on Employees' Performance (A Study of Abdul Gusau Polytechnic, Talata-Mafara and State College of Education Maru, Zamfara State). Arabian Journal of Business and Management Review (Nigerian Chapter), 4 (2), 34-43.

Olughor, R. J. (2015). Effect of Innovation on the Performance of SMEs Organizations in Nigeria. Management, 5 (3), 90-95.

Ozor, P. A., Orji-Oko, C. L., & Olua, C. K. (2015). Productivity Improvement of Small and Medium Scale Enterprises using Lean Concept: Case Study of a Bread Factory. European Journal of Business and Management, 7 (32), 73-84.

Palmer, J. C., Wright, R. E., & Powers, J. B. (2001). Innovation and Competitive Advantage in Small Businesses: Effects of Environments and Business Strategy. Journal of Small Business Strategy, 12 (1), 30-41.

Peltier, J. W., Zhao, Y., & Schibrowsky, J. A. (2012). Technology Adoption by Small Businesses: An Exploratory Study of the Interrelationships of Owner and Environmental Factors. International Small Business Journal, 30 (4), 406-431.

Perkins, R. A. (2007). Using Rogers’ Theory of Perceived Attributes as a Framework for Understanding the Challenges of Adoption of Open Educational Resources. International Journal of Humanities and Social Science, 1 (18), 59-66.

Poon, W. C., Mohamad, O., & Yusoff, W. F. (2018). Examining the Antecedents of Ambidextrous Behaviours in Promoting Creativity among SMEs in Malaysia. Global Business Review, 21 (3), 1-18.

Rao, V. (2016). Innovation through Employee Engagement. Second Asia Pacific Conference on Advanced Research (pp. 1-9). Melbourne: Asia Pacific Institute of Advanced Research (APIAR).

Rios, R. V., Pessanha, M. D., Almeida, P. F., Viana, C. L., & Lannes, S. C. (2014). Application of Fats in Some Food Products. Food Science and Technology, 34 (1), 3-15.

Rogers, E. M. (1995). Diffusion of Innovations (4th ed.). New York: Free Press.

Rosli, M. M., & Sidek, S. (2013). The Impact of Innovation on the Performance of Small and Medium Manufacturing Enterprises: Evidence from Malaysia. Journal of Innovation Management in Small & Medium Enterprise, 2013.

Santos, J. L., Erdmann, A. L., Meirelles, B. H., Lanzoni, G. M., Cunha, V. P., & Ross, R. (2017). Integrating Quantitative and Qualitative Data in Mixed Methods Research. Texto & Contexto Enfermagem, 26 (3), 1-9.

Sarkar, S., & Costa, A. I. (2008). Dynamics of Open Innovation in the Food Industry. Trends in Food Science & Technology, 19 (11), 574-580.

Sawang, S., & Unsworth, K. L. (2011). Why Adopt Now? Multiple Case Studies and Survey Studies Comparing Small, Medium and Large Firms. Technovation, 31 (10-11), 554-559.

Seo, Y. W., & Chae, S. W. (2016). Market Dynamics and Innovation Management on Performance in SMEs: Multi-agent Simulation Approach. Procedia Computer Science, 91, 707-714.

Sherwani, K. H., & Mohammed, N. H. (2015). An Analysis of Training and Employee Performance: A Case Study in a Telecommunication Company in Erbil. International Journal of Social Sciences & Educational Studies, 2 (2), 74-82.

Shipton, H., West, M. A., Dawson, J., Birdi, K., & Patterson, M. (2006). HRM as a Predictor of Innovation. Human Resource Management Journal, 16 (1), 3-27.

Soukoulis, C., Yonekura, L., Gan, H.-H., Behboudi-Jobbehdar, S., Parmenter, C., & Fisk, I. (2014). Probiotic Edible Films as a New Strategy for Developing Functional Bakery Products: The Case of Pan Bread. Food Hydrocolloids, 39, 231-242.

Stowe, C. R., & Grider, D. (2014). Strategies for Advancing Organizational Innovation. Journal of Management and Marketing Research, 15, 1-17.

Sulistiyani, S. (2017). Performance Marketing Model through Acculturation Innovation and Market Orientation in the Bakery Industry. Expert Journal of Marketing, 5 (1), 1-9.

Tavassoli, S., & Karlsson, C. (2016). Innovation Strategies and Firm Performance: Simple or Complex Strategies? Economics of Innovation and New Technology, 25 (7), 631-650.

URT & UNIDO. (2012). Tanzania Industrial Competitiveness Report 2012. Ministry of Industry and Trade of the United Republic of Tanzania (MIT), President’s Office Planning Commission of the United Republic of Tanzania (POPC) and United Nations Industrial Development Organization (UNIDO).

URT. (2012). National Baseline Survey Report for Micro, Small, and Medium Enterprises in Tanzania. United Republic of Tanzania: Ministry of Industry and Trade (MIT) and Financial Sector Deepening Trust (FSDT).

URT. (2003). Small and Medium Enterprise Development Policy. Dar es Salaam: Ministry of Industry and Trade-The Government of the United Republic of Tanzania.

Valdez-Juárez, L. E., García-Pérez de Lema, D., & Maldonado-Guzmán, G. (2016). Management of Knowledge, Innovation and Performance in SMEs. Interdisciplinary Journal of Information, Knowledge, and Management, 11, 141-176.

van Auken, H., Madrid-Guijarro, A., & García-Pérez-de-Lema, D. (2008). Innovation and Performance in Spanish Manufacturing SMEs. International Journal of Entrepreneurship and Innovation Management, 8 (1), 36-56.

Van Der Spiegel, M., Luning, P. A., De Boer, W. J., Ziggers, G. W., & Jongen, W. M. (2006). Measuring Effectiveness of Food Quality Management in the Bakery Sector. Total Quality Management & Business Excellence, 17 (6), 691-708.

von Treuer, K., & McMurray, A. J. (2012). The Role of Organisational Climate Factors in Facilitating Workplace Innovation. International Journal of Entrepreneurship and Innovation Management, 15 (4), 292-309.

White, K., & Hall, H. (2013). Chatman’s Bakery: Diversification and Innovation in the Family Business. Retrieved August 29, 2018, from Canadian Regional Development: A Critical Review of Theory, Practice and Potentials: http://ruralresilience.ca/wp-content/uploads/2013/10/Chatmans.pdf

Williams, A. B. (2013). Towards Creative Humanoid Conceptualization Learning from Metaphor-Guided Pretense Play. Creativity and (Early) Cognitive Development: Papers from the 2013 AAAI Spring Symposium (pp. 79-83). Association for the Advancement of Artificial Intelligence.

Yanes-Estévez, V., García-Pérez, A. M., & Oreja-Rodríguez, J. R. (2018). The Strategic Behaviour of SMEs. Administrative Sciences, 8 (4), 1-21.

Zhang, P., & Gheibi, S. (2015). From Intrinsic Motivation to Employee Creativity: The Role of Knowledge Integration and Team Psychological Safety. European Scientific Journal, 11 (11), 380-392.

Zizlavsky, O. (2016). Innovation Performance Measurement: Research into Czech Business Practice. Economic Research-Ekonomska Istraživanja, 29 (1), 816-838.

Zwingina, C. T., & Opusunju, M. I. (2017). Impact of Innovation on the Performance of Small and Medium Scale Enterprise in Gwagwalada, Abuja. International Journal of Entrepreneurial Development, Education and Science Research, 4 (1), 31-45.

Downloads

Published

2022-05-01

Issue

Section

Economic Development, Technological Change, and Growth