Innovation Capability and Performance of Small Agrofood Processing Businesses in Ghana: The Mediating Role of Organisational Capability Irene

Abstract

Innovation capability is well established as a key process and the ability to continuously transform resource capabilities in creating value for growth and performance. As part of the quest to resolve the decline in performance of small businesses, the study prioritised the effects of innovation capability and organisational capability for performance of small agro-food processing businesses located in the Greater Accra Metropolitan Area, Ghana. The study also considered the mediating role of organisational capability. It followed the sequential mixed methods research approach and a descriptive-causal research design. It involved a non-probability sampling technique for a population of 800 which resulted in the selection of 260 small agro-food processing businesses with a response rate of 80.8%. Through convenience sampling interviews were conducted with 11 Managers of the small agro-food processing businesses. Inferential analysis through structural equation modeling showed that innovation capability positively and significantly influenced the performance of small agro-food processing businesses in Ghana. The facets of innovation capability made up of knowledge management, organisational learning and organisational culture capabilities were evident in the operations of the businesses. However, there was a minimal level of training and development activities, a systematic means for searching, receiving, and sharing information on new ideas. The mediating role of organisational capability was positive in relation to contribution to performance. A key outcome of this study was that, intentionally building systems to increase innovation capability through operational structures of organisational capability would result in high performance and development of small agro-food processing businesses in Ghana. The study recommended that national growth strategies should be embedded in innovation capability and organisational capability technical support management systems for small businesses in Ghana.