*3.4. Innovativeness*

Innovation is better known as creativity [67] and creativity is "the application of a person's mental ability and curiosity to discover something new". Where there is no creativity there would be no force to be innovative [68]. So, creativity is the source of better innovation. Simultaneously, the organization that fails to innovate will expire in the long run [63]. Innovation can be categorized into four classes, i.e., creation of a new product/service, expansion (extension), replication (duplication) of an existing product or service line, and synthesis with the combination of existing and new processes [69].

Innovation as an element of EO has been found in positive correlation with the business performance [33,39,40,45,56] and contributes to a particular firm moving one step ahead of rivals by its practice in all sorts of business even in the SMEs also [70]. In the context of Greek SMEs, innovation was identified to have a significant effect on business performance [71] while Malaysian SMEs were found to be the same among 182 SMEs in the manufacturing sector [72].

#### **H4:** *Innovativeness orientation is positively related to business performance*.
