Learning Orientation, Innovation and Performance: Evidence from Small-Sized Business Firms in Iran

Abstract

In the world where the only thing one can trust in is lack of confidence, for organizations to respond to this wavy environment, they need innovation, which by itself has a central role in the movement toward the comparative advantage and supreme performance. Although many researchers have in the past been carried out investigating the effect of innovation on organization's performance, it seems that in future we will face lack of applicable studies on the effect of learning orientation on innovation in general, and on the innovation of small firms in particular. Having investigated 82 small firms of Tehran with the aim of filling the gap existing in the research literature of the country, the present study showed that organization’s commitment to learning, open-mindedness and shared vision have significantly positive effects on the innovation of small firms. The results obtained from the regression analysis also indicated the presence of significantly positive relationships between innovation and profitability, sale and ROI in small firms.