Chapter 4: What Makes Small Businesses Better? Innovation, Innovative Work Climate, Readiness for Change and Entrepreneurial Leadership

In today’s business life, known as Industry 4.0, intensive research and development studies are carried out, and technological applications from the use of artificial intelligence to automation are preferred. During this process, the expectations of the enterprises can create sustainable innovations that will have a competitive advantage in the market in which they play a role. From this point of view, innovation is considered an important resource that will bring high returns and competitiveness to businesses. Moreover, innovation is also evaluated as a rapid development indicator of small businesses and family businesses. Entrepreneurial leaders have the ability to analyse the environment well, and are role models for employees. Entrepreneurial leaders ensure that innovation is a sustainable competence within the organisation. On the other hand, making the necessary preparations for the adaptation of the employees who resist in situations where change is needed, and explaining the necessity of change are an issue that entrepreneurial leaders emphasise. In addition, the concept of innovation climate, which enables innovation to be an organisational element, is also significant for the evolvement of the innovation in the workplace. The role of leadership in creating an innovation climate and adapting it to the organisational structure has a major role on businesses performance. In this chapter, the subject of how small businesses will survive in the perspective of innovation in today’s competitive business life is examined theoretically in the context of entrepreneurial leadership, innovation climate, and readiness to change variables. Suggestions were made for small businesses and the relations between variables were examined within the scope of the theoretical framework.