Organizational Learning and Work Environment: A Formation of Innovative Work Behavior at Small Medium Enterprises (SMEs)

Empirical evidence has shown that employees' engagement in innovation is crucial as an effective resource for SMEs to be more innovative. Therefore, it is important to understand what is needed to foster innovative employees within an organization. The present study examines the effects of organizational learning and work environment on the formation of employees innovative work behavior in SMEs in three selected cities of the East Coast Economic Region, Malaysia. A stratified sampling technique was used for the sample of 260 employees at micro and small-scale enterprises. The study involved three main constructs: organizational learning, work environment and innovative work behavior. Frequency, percentage, mean, t-test and multiple linear regressions were used in data analysis. Our analysis revealed innovative work behavior of SMEs at a moderate level. Moreover, the innovative work behavior at micro enterprises is significantly lower than small enterprises. The innovation outputs are made up of employees with high innovative work behavior. Overall, statistical evidence indicated that organizational learning and work environment have a significant influence on the formation of innovative work behavior. Thus, the SMEs should strive to raise their employees' innovative work behavior in order to improve the performance of organizational innovation and competitiveness.