ABSTRACT Managerial capabilities play a critical role in shaping firm innovation and environmental performance, yet evidence for small‐ and medium‐sized enterprises in traditional sectors remains limited. This study examines the association between managerial orientation and two performance outcomes—product/marketing innovation and eco‐innovation—using survey data from wineries in the Hungarian wine sector. Managerial orientation is conceptualized as an individual‐level strategic capability and measured using an item response theory approach that accounts for differences in item informativeness. Innovation outcomes are captured through standardized latent performance scores. Ordinary least squares and seemingly unrelated regression models show that managerial orientation is positively associated with both product/marketing innovation and eco‐innovation. A cross‐equation test indicates that this relationship does not differ significantly across domains, suggesting that managerial orientation functions as a general‐purpose capability supporting both commercial and environmental innovation. The findings highlight the importance of managerial capabilities for advancing sustainability‐oriented innovation in incumbent SMEs.
Fertő et al. (Sun,) studied this question.