DAMBI

DOLLO UNIVERSITY
COLLEGE OF
BUSINESS AND
ECONOMICS
DEPARTMENT OF
MANAGEMENT
GROUP NAME ID NUMBER
1. Miliyon Diriba PGW/018/24
2. Edosa Raga PGW/006/24
3. Bikila Eliyas PGW/004/24
4. Jahad Gurmesa PGW/012/24
5. Milkiyas Mesgabu PGW/017/24
6. Wada Kebede PGW/027/24
7. Ifa Fikadu PGW/025/24
8. Fikadu Tolasa PGW/008/24

Submitted to Mr .Chalchissa Amentie Kero(PHD)

Submission date July 10,2025

DAMBI DOLLO , OROMIA ,ETHIOPIA

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The Effects of Network Ties on Product Innovation Success: A
Study of SMEs
Statement of the problem
Large firms can establish separate sub-units for pursuing the exploitation and exploration strategies
simultaneously, but SMEs do not usually have that option. How, then, can a firm pursue this strategy if it
has limited resources? When resources are limited, SMEs must remain alert for windows of
opportunities. The SME sector in the developing nations faces many constraints such as technological
backwardness, and entrepreneurial capabilities, unavailability of appropriate and timely information,
insufficient use of information technology and poor product quality.Small and medium enterprises in
Ethiopia have lack of cooperation (network ties), lack of competitive strategic orientation & market
information, inadequate R&D were obstacle to SMEs’ technological and product innovation success. The
major barriers of introducing or expanding technological innovation for SMEs were: lack of government
policy and regulation, high cost of innovation, organizational culture, absence of cooperation(network
ties), size of enterprise, lack of skilled personnel and lack of finance.

Purpose
It is justifiable to study how small firms and entrepreneurs can enhance their product innovation success
and achieve sustainable competitive advantages.

Specific objectives
To fill some of the research gaps by assessing the effects of network ties (intra and extra) on product
innovation success of SMEs in Ethiopia.
To assess how to develop use of new technological, entrepreneurial capability, use of timely information
and product quality.
To assess how to increase their interlinkage, provide useful information for competitive strategy and
making research and development on time.
To assess how to use government policy and regulations
To assess how to decrease the cost of innovation and change organizational structure.
To assess how to increase size of enterprise, personal skills and their finance

Data used (including its type: qualitative or quantitative)

These researchers used the mixed method for collecting data like the qualitative, quantitative data for
finding the solutions. The instrument it used to collect data like pre-test, posttest and used primary data
method in the randomly distribute the questionaries’ among their participants and interviews
Quantitative data: Cross-sectional survey of 425 SMEs in manufacturing and services sectors, with 388
valid responses.
Qualitative data: In-depth interviews with SME owners/managers to gather context and deeper insights.
Sampling: Multi-stage clustering and stratified sampling from industrial zones in Oromia region, Ethiopia.

Method of data analysis

Quantitative:
Structural Equation Modelling (AMOS) to test hypotheses.
Multiple regression analysis to determine the strength and significance of relationships.

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Reliability tests (Cronbach’s alpha), convergent validity, and discriminant validity assessments.
Qualitative:
Thematic analysis of interview responses to complement statistical results.
Triangulation: Integrated qualitative and quantitative findings to strengthen validity.
To test the relationships between various variables of strategic orientations and innovative success,
statistical technique for hypothesis testing specifically, multiple hierarchical regression analysis and
structural equation modeling (SEM) were used.
Mixed methods approach ,triangulation ( qualitative , quantitative , case study and descriptive survey of
425 of SMEs through regression analysis and SME
Generally this researchers analyze their data by using inferential analysis.

Finding , conclusions and policy recommendations.

Finding of this artile

To identify the local and non-local knowledge linkages.

To identify that the network ties has either positive effect on product innovation success or not.
To identify that what the managers said and owners of SMES said are similar or not.
To describe that not all the small and medium enterpreneurs have capabilities and sufficient resource to
utilize various opportunities.

Conclusions

This study has made a conceptual and empirical contribution to the research on SMEs in developing
countries as general examining the network ties on product innovation success of SMEs. One is that
networks ties (extra/intra cluster ties) are the drivers’ successful product innovations of SMEs. Our study
shows that committing too many resources to sharing knowledge only within clusters may be counter
productive, since it can lead to the diffusion of redundant knowledge, instead of bringing in new
knowledge to the firm. Therefore, using both internal cluster ties and external cluster ties, then, seem to
be amore preferred source for SMEs seeking new ideas, information and knowledge.
SMEs with stronger and more diverse networks achieve better innovation outcomes in terms of market
success (share, customer acceptance) and financial success (sales, profit growth).
Networking mitigates resource limitations, enabling SMEs to compete more effectively.

The policy recommendation

Encourage SME participation in both local and external industry networks.

Facilitate partnerships with research institutions, large firms, and international organizations.
Develop policies and programs that reduce barriers to collaboration (e.g., improving access to
information, funding for joint projects).
I want to recommend those SMEs as it used for the rule and regulations of government policy.
Use for new technology related to their product and to search new information in the markets.
Make market research as well as develop their capacity depend on their finding.
To solve for personal skill by giving the training to their employees.

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Able to be control their product according to their size

In your opinion,what were the strength and weakness of the paper?

Strength of this paper

According to this paper used the cross sectional data its strength of this paper according to my opinion.
Rightly this study can able indicates the major problems as the small and medium enterprises cannot
change in the working progress like the case of inadequate finance ,poor personal skill , unable to use
government policy and regulations are the major factors to be decrease the Small and medium
enterprise in Ethiopia.
Strengths:
Comprehensive mixed-method approach enhances robustness.
Strong statistical analysis with reliability and validity testing.
Practical implications for SMEs and policymakers in developing economies.

In addition to this using for a data collection from both managers and owners of their enterprises can
express deeply the problem for as the SMEs have.

Weakness of this paper

The researchers used only original and field research collected informations. Due to the lack of
longitudinal data the casual effects of one variable on the other is not completely defined. The numbers
of work ties is not enough for getting best solution for this studies. Its not brefily to describe the policy
instrument for the developing of the SMEs in the Ethiopia based on there problem for the future time
and techniques to fill their gaps by providing the necessary resources.
Cross-sectional design limits ability to establish long-term causality.
Focuses solely on Ethiopian SMEs; generalizability may be limited.
Does not explore the role of emerging digital networking platforms