1.

1 Creativity and Innovation:

Creativity and innovation are such broader point of view that can be conceptualized, described and prescribed from diverse logic of arguments (Mumford and Gustafson 1988), as well as from different branch of studies linked to genius and science, business and art (Puccio 1991; Eysenck 2008). So, the building block of modeling creativity and innovation greatly depends on the intensity of domain upon which the specific context is based on. In the arena of business studies, the inseparability of creativity and innovation had been judged by Amabile et al., (1996) and Heye (2006) where they were focused on the chain relationship between creativity and innovation in accomplishing novel creation. Their workings termed creativity as a mechanism of producing novel and useful ideas (Wyckoff, 1991) whereas innovation is the implementing phase of transforming this novel and useful ideas into reality through creating new objects or processes. This argument is supported by Woodman et al. (1993) where they demonstrated a theoretical framework of understanding creativity in a complex social setting like organization and defined organizational creativity as a subset of the broader domain of innovation. It was actually their consistent showing of early research on interactionist model of creative behavior in organizational innovation (Woodman and Schoenfeldt, 1989). However, creativity is necessary but not sufficient condition for innovation. According to Robert Gahim, creativity is composition of anticipation and commitment, where anticipation is the fact of revealing or exploring hidden part of any aspect through visionary view and commitment is the embedded belief with vision. Both of these two dimensions demand the creative personality which shapes the trait patterns of creative persons (Guilford, 1950). But trait perspective of examining creativity was argued by pointing the intervention of social environment upon creative behavior (Amabile, 1998). In this prospect, West (2002) noted that although environment can hinder creativity and thus generate uncertainty, however, it can serve to drive innovation. Innovation arises from organizing circles of resources of experiencing new knowledge (Wheatley, 1994) as a means of introducing products, services, processes and management those are completely new by nature to the industry (Cosh & Hughes, 1998) which subsequently act as a key force in creating new demand and thus new wealth (Schumpeter, 1934). So, it is increasingly important for firm to introduce innovation and flexibility in creative activities into firms core competence (Peters, 1987). Moreover, in order to make sure the effective and efficient utilization of resource potential,

Prahalad (1993) emphasized on developing a proactive framework in which innovation and creativity are planned and managed.

1.2 Small Business Perspective & Contextual Consideration:

Although the discussion of creativity and innovation was initially subject to the context of large firms, Schumpeter (1939) provided his early insights on role of small business in innovation. In recent, study on creativity and innovation from small business domain acquired a paramount importance for economic sustainability. Martins and Terblanche (2003) regarded creativity and innovation as an overlapping construct between entrepreneurial stage and small business management stage to reach the optimal success for small businesses. Small business has some sorts of unique features like scarce resources, low market influence and informal communication, which in turn differentiate its role and scope of creativity and innovation from large corporations (Dickson et al., 1997). At the initial stage of business operation, small business confronts local competition to sustain in market and thus forced by creativity and innovation in order to provide high degree of value through creating heterogeneity. And further growth of small business is also underlying upon the intensity of creativity and innovation to differentiate its ability to meet the customer preferences. So, seeking innovative strategies through the creative response of corresponding environment is considered to be vital component for small firm success (Yap & Souder, 1994). Besides, the innovativeness and accumulated creativity within small business is highly sensitive to its national and regional context in which it find itself embedded (Tidd et al., 1997). But most of studies conducted in this prospect, are based on developed or industrialized context. Even negligible amount of research has been found providing empirical suggestions while interconnecting creativity and innovation in ensuring sustainable growth for small business in developing context (Bell & Pavitt, 1992). So, pointing this inevitable demand of contextual consideration, this project shall make an attempt to take a developing country perspective like Bangladesh where the economic and political condition is volatile in nature and market change happens frequently to adjust with.

1.3 Sustainable Competitive Advantages for Small Business:

When a small firm gets enroll in a particular industry or when it creates a new industry, in both cases it inevitably shakes some sort of visible and invisible competitive forces which determine the firms success or failure. By supporting this view, it is feasible that success and failure of small business greatly relay on firms best knowledge of competitive nature of the field and strategic response on it, in which it is playing the game. In order to ensure sustainable growth, small firms are thriving to construct a portfolio of competitive advantages which in turn

differentiate the firms ability to create heterogeneous value to reach subsequent growth. But creating competitive advantages are not sufficient enough without ensuring its longevity, because competitive advantages could be rapidly imitated by competitors in a dynamic situation (Dickson, 1992; Ghemawat, 1986). It is that point of sustainability in competitive advantages and competitive advantages can be sustainable only when it inherently exposes the inimitability attributes to replicate by rivals (Quinn, 1988; Barney, 1991; Kandampully & Duddy, 1999). Therefore, much greater attention has been rendered to the condition of imperfect imitability. Rumelt (1984) conceptualized the term isolating mechanisms in protecting individual firm from imitation that in turn impede imitative competition through firms possession of property rights to scarce resources and various quasi- rights in the form of lags, information asymmetries and frictions (Rumelt, 1987). This notion has also a particular interest of casual ambiguity (Lippman & Rumelt, 1982) when rivals are completely unconscious of some mysterious factors that lead the firm to utilize some sustainable competitive advantages, even in a subconscious state of organization. Deviating from this paradigm, Ghemawat (1986) advocated a bit of different categorization that focused on size advantages, preferred access to either resources or customers from market orientation to restrict the competitors option. This perspective is mostly realistic for a firm that operates under a criterion of small business. Further, the essence of sustainability of competitive advantages through firms capability and core competencies occupied a pivotal position in the literature of strategic management (Prahalad & Hamel, 1990; Stalk et al., 1992; Teece & Pisano, 1994). However, this view is well supported by Barneys (1991) resource based view of firm where his research findings argued the origin of heterogeneity is underlying upon firms resource bundle and capabilities. Works of Dierickx and Cool (1989) focused on the kind of resources i.e. time compression diseconomies, asset mass efficiencies, interconnectedness of asset stocks, asset erosion and casual ambiguity; those are considered to be center in the resource based view of firm. Remarkable number of researches demonstrated that differentiating output strategy and lowering the cost of input strategy (Porter, 1985) in achieving competitive edge could be viable only when resources of firm are heterogeneous in nature by the supplementary help of information technology to serve sustainability (Freeman 1974; Bessant, Lui, 1986; Acs, Audretsch, 1988; Drucker, 1990; Rainnie, 1991). Some researchers found the relevancy of this argument in enhancing small firms strategic and structural flexibility (Holmes et all., 1991; Geisler, 1992; Raymond, 1992;

Cafferata & Mensi, 1995; Quaglia, 1996). Taking small business for the course of study, Perkins (2004) justified three determinants (i.e. develop long term relationship, provide outstanding service and develop economies of scale) to compete effectively and efficiently in a dynamic economy. Studies (Barney, 2001; Sushil, 2000 cited in Ambastha & Momaya) cite the importance of flexibility, agility, speed and adaptability as becoming increasingly important sources of competitiveness in the current business environment. Small businesses, by their very nature, should have the advantage in these areas but only if they can leverage these sources of competitiveness effectively. In addition, buying groups, strategic partnerships, intense promotional efforts, and effective use of people within the small business have been proven techniques in developing competitive advantage for small businesses (S. Bressler). For many cases, small business is part of a large distribution channel; so it can leverage technology by utilizing routing management system to enhance cost efficiency (Kckhouse, 1998). Porter (1996) suggests that todays competitive realities demand leadership. Leaders believe in change; they energize their organizations to innovate continuously. Moreover, in order to maintain sustainable leadership and gain competitive advantages (Levitt, 1972; Chase, 1982; Groenroos, 1988; Ferrero, 1992), small firms will have to out-innovate the competition continuously so that it is the customer who constitutes the ultimate beneficiary (Kandampully and Duddy, 1999).