Innovation capability configuration and its influence on the relationship between perceived innovation requirement and organizational performance

Abstract

Purpose When the management of an information technology (IT) manufacturing firm perceives a need for innovation due to any threat in the external environment, it will be prompted to use organizational resources to support innovation and improve organizational performance through the implementation of the innovation. The purpose of this paper is to explore whether an IT manufacturing firm’s budget slack, information quality of information system (IS), process innovation and product innovation would interact to collectively form an innovation capacity, which is termed “innovation capability configuration (ICC)”, and whether ICC mediates the relationship between perceived innovation requirement and organizational performance. Design/methodology/approach To answer these questions, a structural equation model was built and a questionnaire survey was conducted to collect data from research and development and production managers of IT manufacturing companies listed on the Taiwan Stock Exchange and Over-The-Counter markets. Findings The results showed that budget slack, IS information quality, process innovation and product innovation are all significantly related to ICC, in which high-quality information and low level of budget slack are the key factors that underpin the innovation capacity. In addition, ICC has a full mediation effect, that is, perceived innovation requirement positively influences ICC, which, in turn, improves organizational performance. Research limitations/implications Because all items in a questionnaire were answered by a manager, the common method variance might exist in this study. In addition, the effective recovery rate of the questionnaire was not high due to which the non-response bias might occur. Following the research limitations, several future research recommendations are proposed. Practical implications This study offers managerial implications for the development of an IT manufacturing firm’s innovation strategy and structure to smooth the implementation of innovation in the severe environment. Originality/value The study is the first attempt to integrate the four elements clearly illustrating the ICC, which is a more complete innovation strategy, thus contributing to improve the past fragmental studies and clarify some controversial points existing in the extant innovation research.

A Nexus among Strategic Orientation, Social Network, Knowledge Sharing, Organizational Innovation, and MSMEs Performance

“…MSMEs businessmen are fully aware that today they are required to have a strategy that is right on track, which include resource and market aspects. This result also strengthens the prior research finding that resources orientation (Muafi et al, 2019;Obeidat, 2016;Zaied et al, 2015;Su et al, 2018;Islami et al, 2018) and market orientation (Ashrafi & Ravasan, 2018) can increase organizational innovation and organizational performance (Saunila, 2014;Aujirpongpan & Hareebin, 2020;Lee & Xuan, 2019;Huang & Ngoc, 2019).…”

“…It becomes an added value for the organization. Dynamic means that organization resources must integrate, build, and reconfigure the internal and external capabilities of the organization in order to deal with turbulent environmental changes and can have an impact on organizational innovation (Islami et al, 2018;Muafi et al, 2019) and company performance (Islami et al, 2018;Tuan & Yoshi, 2010;Su et al, 2018;Napitupulu et al, 2020). This result is strengthened by the research from Zaied et al 2015that there is an effect between internal and external resources of the company on organizational innovation.…”

“…Internal knowledge can be an important element to proves that has an impact toward organizational innovation, so that the organization can create new design, new product, or even new method (Muafi et al, 2019). The synergy between resources makes the organization able to produce organizational innovation that will have a significant impact on company performance (Su et al, 2018;Islami et al, 2018).…”

Sensitivity about inventory leanness

“…For instance, a consequence of high IT usage is greater clockspeed – the rapidity in the introduction, development and replacement of products and processes by firms in the industry (Rylands et al , 2016; Sharifi et al , 2006; Perrons and Platts, 2005). For firms to survive in such fast-paced and information-rich environments, their inventory management practices would require more efficient information processing abilities and require faster responses to internal and external changes (Sharma and Bhagwat, 2006; Su et al , 2018; Nobre, 2011).…”

Elementos Determinantes Para a Capacidade De Inovação Das Empresas: Uma Revisão Sistemática Da Literatura

“…da administração da empresa que ao perceber a necessidade de inovação precisa investir em uma capacidade de inovação forte e constante (Su, Cheng, Chung & Chen, 2018).…”