<abstract xmlns="http://www.w3.org/1999/xhtml"><p> Innovations can provide small and medium-sized enterprises (SMEs) a significant competitive advantage considering the ambiguous business environment. SMEs may face lower capacity and more constrained funding for long-term investments, however, understanding innovation in a broader sense and looking into organizational structures, behaviors and processes, SMEs have an opportunity to become more competitive. This study analyzes the impact of ethical behavior as a part of an organizational culture on organizational innovation performance in SMEs. Six hundred SMEs in Latvia were surveyed to assess whether employees follow the principles of business ethics in their work and what is the organizational innovation performance in these enterprises. We found that more ethical behavior leads to better organizational innovation performance, and that the size of enterprise is the most significant factor affecting this relationship. The study proposes insights that contribute to theoretical and practical discussions on fostering small businesses innovation in small economies. </p></abstract>

Innovations can provide small and medium-sized enterprises (SMEs) a significant competitive advantage considering the ambiguous business environment. SMEs may face lower capacity and more constrained funding for long-term investments, however, understanding innovation in a broader sense and looking into organizational structures, behaviors and processes, SMEs have an opportunity to become more competitive. This study analyzes the impact of ethical behavior as a part of an organizational culture on organizational innovation performance in SMEs. Six hundred SMEs in Latvia were surveyed to assess whether employees follow the principles of business ethics in their work and what is the organizational innovation performance in these enterprises. We found that more ethical behavior leads to better organizational innovation performance, and that the size of enterprise is the most significant factor affecting this relationship. The study proposes insights that contribute to theoretical and practical discussions on fostering small businesses innovation in small economies.

Ethical Behavior and Organizational Innovation: Analysis of Small and Medium-Sized Enterprises in Latvia

Economics and Business

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Innovations can provide small and medium-sized enterprises (SMEs) a significant competitive advantage considering the ambiguous business environment. SMEs may...

Ethical Behavior and Organizational Innovation: Analysis of Small and Medium-Sized Enterprises in Latvia

Published Online: Apr 28, 2018

Page range: 74 - 88

DOI: https://doi.org/10.2478/eb-2018-0006

Keywords
Competitiveness, ethical behavior, organizational culture, organizational innovation, small and medium-sized enterprises

© 2018 Madara Apsalone, Ricardo Martín Flores, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Ethical Behavior and Organizational Innovation: Analysis of Small and Medium-Sized Enterprises in Latvia

Published Online: Apr 28, 2018

Page range: 74 - 88

DOI: https://doi.org/10.2478/eb-2018-0006

KeywordsCompetitiveness, ethical behavior, organizational culture, organizational innovation, small and medium-sized enterprises

© 2018 Madara Apsalone, Ricardo Martín Flores, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Keywords
Competitiveness, ethical behavior, organizational culture, organizational innovation, small and medium-sized enterprises