The Role of Innovation Practices on the Financial Performance of Telecommunications Firms in Zimbabwe

Abstract

In Zimbabwe, the dependence of telecommunications firms on the national fiscal revenues to sustain their operations ranges between 1% to 3.72% of GDP. Financially, dependent telecommunications firms have an aggregate market share of 17.6% whilst non-dependent firms’ controls 82.4% of the total market share in terms of revenue generated in the sector. In this study, the researchers sort to determine the innovation practices influencing the financial performance of telecommunications firms in Zimbabwe. The researchers identified four practices, namely corporate entrepreneurship orientation (COREO), market opportunity evaluation (MOPE), resource mobilisation strategy (REMOS) and competitive positioning strategy (COMOS). A cross sectional research design was adopted. The sample size was determined using Krejcie and Morgan’s formula. Data was collected using a five point Likert Scale using Google forms. Data analysis was conducted using SPSS in which a Cronbach alpha reliability coefficient of 88.9% was achieved. Regression tests were statistically significant for each independent variable to the dependent variable. A Spearman rank correlation analysis method revealed statistically significant correlational values between each innovation practice and financial performance ranking from -0.214 to 0.947. From the results of the study, the researchers concluded that the hierarchical order of influence of innovation practices on the financial performance of telecommunication firms in Zimbabwe were COREO with 89.68%, COPOS with 85.93%, and REMOS with 66.42% and MOPE with 4.58%. The researchers recommend that the management of firms in the telecommunication industry should consider the hierarchical order of influence of innovation practices when making strategic decisions in order to achieve positive results.