The effects of cultural factors on innovation in a Thai SME

Purpose ââ"šÂ¬Ã¢â‚¬Å“ The purpose of this paper is to look at a Thai manufacturing small to medium-sized enterprise (SME) in order to develop a basic understanding of the innovation concept and process in Thailand, and to investigate how the five factors associated with innovation interact with Hofstede's five cultural dimensions to influence the innovation process. Design/methodology/approach ââ"šÂ¬Ã¢â‚¬Å“ This study employs a qualitative methodology, using a case-study approach. Findings ââ"šÂ¬Ã¢â‚¬Å“ All the studies of national culture and innovation potential use Hofstede's dimensions but this study suggests that in Thailand there may be cultural factors other than Hofstede's that influence innovation and that modify the effects of Hofstede's model on innovation. Allied to this, it appears that the traditional cultural values could be shifting, as younger people absorb an increasing amount of influence from Western media. The first finding from this study suggests that Thai SMEs may tend to more effectively produce or adopt incremental innovations rather than radical ones. The second finding is that, if the research company is typical of Thai SMEs, Thai SMEs are likely to experience difficulties with adopting completely novel innovations effectively. This is because four (except the dimension of long versus short-term orientation) of Hofstede's five Thai cultural dimensions were clearly found to obstruct the innovation process. Also there are some cultural factors peculiar to Thailand, not mentioned by Hofstede, that impact on the innovation process. Research limitations/implications ââ"šÂ¬Ã¢â‚¬Å“ The paper underlines the need to understand local culture and environment, which play a crucial role in the success or failure of innovation activities of firms, particularly SMEs. Originality/value ââ"šÂ¬Ã¢â‚¬Å“ There have been very few studies on innovation with reference to Thai SMEs.