Relation between organizational factors & innovation capability in small & medium sized software companies

This paper aims to determine the organizational factors that have significant impact on the innovation capacity of SME. For this purpose an empirical research including 80 small and medium sized software development companies was conducted. Factor analysis and regression based methodology were used to analyze the collected data. The result shows that the innovative software companies regard three basic predictors signiFicantly important for innovation capacity. Human resource and idea generation impacted on the innovation capacity positively. However, the third predictor, cross-ftinctional integration impacted on the innovation capacity negatively.