Keywords
Frugal innovation practices
Cost reduction
MSMEs
Discriminant analysis
How to Cite
Abstract
The pandemic caused by the spread of the SARS-CoV-2 virus has compelled many companies to prioritize innovation strategies in order to survive. Consequently, this cross-sectional empirical study employed a quantitative approach to assess the level of innovation achieved through frugal innovation practices by micro, small, and medium-sized enterprises (MSMEs) in the post-pandemic era in the state of Guanajuato, Mexico.
A survey-type questionnaire was randomly administered to a sample of 58 companies. Stepwise discriminant analysis, utilizing Wilks' Lambda method, was applied to analyze the data. The results demonstrate that, during the crisis, the most influential variables in explaining the level of innovation are the significant reduction in the price of products or services and their durability, both regarded as frugal innovation practices. Consequently, decision-makers should establish frugal ecosystems that enable cost reduction while emphasizing the functionality and performance of their products or services.
References
Agarwal, N., Grottke, M., Mishra, S., Brem, A. (2017). A systematic literature review of constraint-based innovations: State of the art and future perspectives. “IEEE Transactions on Engineering Management”, 64(1). DOI: 10.1109/TEM.2016.2620562.
Bhatti, Y.A., Ventresca, M. (2013). How can ‘frugal innovation’ be conceptualized? “SSRN Electronic Journalc”. DOI: 10.2139/ssrn.2203552.
Cuevas-Vargas, H., Camarena, J.L., Velázquez-Espinoza, N. (2022). Sustainability performance as a result of frugal innovation. The moderating effect of firm size. “Procedia Computer Science”, 214. DOI: 10.1016/j.procs.2022.11.159.
Cuevas-Vargas, H., Parga-Montoya, N. (2022). How ICT usage affect frugal innovation in Mexican small firms. The mediating role of entrepreneurial orientation. “Procedia Computer Science”, 199. DOI: 10.1016/j.procs.2022.01.028.
Cuevas-Vargas, H., Parga-Montoya, N., Fernández-Escobedo, R. (2022). The adoption of ICT as an enabler of frugal innovation to achieve customer satisfaction. The mediating effect of frugal innovation. “Procedia Computer Science”, 199. DOI: 10.1016/j.procs.2022.01.025.
García-Morales, V.J., Lloréns-Montes, F.J., Verdú-Jover, A.J. (2008). The Effects of Transformational Leadership on Organizational Performance through Knowledge and Innovation. “British Journal of Management”, 19. DOI: 10.1111/j.1467-8551.2007.00547.x.
Hossain, M. (2021). Frugal innovation and sustainable business models. “Technology in Society”, 64. DOI: 10.1016/j.techsoc.2020.101508.
Hossain, M., Agarwal, N., Bhatti, Y., Levänen, J. (2022). Frugal innovation: Antecedents, mediators, and consequences. “Creativity and Innovation Management”, 31(3). DOI: 10.1111/caim.12511.
Instituto Nacional de Estadística y Geografía (INEGI). (2021). Directorio Estadístico Nacional de Unidades Económicas. https://www.inegi.org.mx/app/mapa/denue/default.aspx.
Iqbal, Q., Ahmad, N.H., Halim, H.A. (2020). Insights on entrepreneurial bricolage and frugal innovation for sustainable performance. “Business Strategy and Development”, September. DOI: 10.1002/bsd2.147.
Mishra, O. (2021). Principles of frugal innovation and its application by social entrepreneurs in times of adversity: An inductive single-case approach. “Journal of Entrepreneurship in Emerging Economies”, 13(4). DOI: 10.1108/JEEE-07-2020-0247.
Mutlu, C.C., Zhan, W., Peng, M.W., Lin, Z. (John). (2015). Competing in (and out of) transition economies. “Asia Pacific Journal of Management”, 32(3). DOI: 10.1007/s10490-015-9419-y.
Nunnally, J.C., Bernstein, I. H. (1994). Psychometric theory (3rd ed.). McGraw-Hill.
Pisoni, A., Michelini, L., Martignoni, G. (2018). Frugal approach to innovation: State of the art and future perspectives. “Journal of Cleaner Production”, 171. DOI: 10.1016/j.jclepro.2017.09.248.
Rossetto, D.E., Borini, F.M., Bernardes, R.C., Frankwick, G.L. (2017). A new scale for measuring Frugal Innovation: The first stage of development of a measurement tool. VI SINGEP – International Symposium on Project Management, Innovation, and Sustainability, 6.
Sarasvathy, S., Kumar, K., York, J.G., Bhagavatula, S. (2014). An Effectual Approach to International Entrepreneurship: Overlaps, Challenges, and Provocative Possibilities. “Entrepreneurship: Theory and Practice”, 38(1). DOI: 10.1111/etap.12088.
Weyrauch, T., Herstatt, C. (2017). What is frugal innovation? Three defining criteria. “Journal of Frugal Innovation”, 2(1). DOI: 10.1186/s40669-016-0005-y.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Copyright (c) 2023 Modern Management Review