Frugal innovation in Saudi Arabian SMEs: Role of organizational networking,entrepreneurial bricolage and humane entrepreneurial orientation

Abstract

Understanding the factors that lead to frugal innovation helps small and medium enterprises (SMEs) develop competitive advantages by creating cost-effective, sustainable and innovative products or services. This is particularly important for SMEs operating in resource-constrained environments where traditional innovation models may not be feasible. Drawing on resource-based and capability-based views, this research aims to examine the direct and indirect effects (through entrepreneurial bricolage) of organizational networking on frugal innovation. Furthermore, on the basis of the attention-based view, this study also proposes that humane entrepreneurial orientation amplifies bricolage's main impact on frugal innovation. Using a time-lagged approach, the data for this study were collected from 243 SME representatives in Saudi Arabia. PLS-SEM was run to confirm the proposed hypotheses. The findings reveal that the complex relationship between organizational networking and frugal innovation is mediated by entrepreneurial bricolage. The empirical findings also confirm that the ‘bricolage-frugal innovation’ relationship intensifies in the presence of higher humane entrepreneurial orientation. To the best of the authors’ knowledge, this study is pioneering in taking humane entrepreneurial orientation as a boundary condition and bricolage as a mediator in the ‘organizational networking-frugal innovation’ relationship. It demonstrates that incorporating humane values into SMEs may improve their ability to utilize entrepreneurial bricolage and achieve success in the domain of frugal innovation.