CHAPTER 6
Conclusions and Recommendations
6.1 Conclusion
This study examined the relation between the aspects of innovation capability, an intangible asset, and innovation performance of the Bicolana entrepreneurs in the pili food processing business using the resource-based view as a theoretical anchor and Saunila’s (2014) innovation capability model of Saunila. It intends to contribute to the innovation capability and performance field by examining the practices of rural women entrepreneurs in the food processing industry. With the RBV as a theoretical framework and using Saunila’s Innovation Capability Framework, this study looked into the innovation strategies of 92 pili processors of the Bicol Region and further explored the relationship of the innovative capability practices with marketing and organizational innovation capabilities and of these capabilities to their firm performance.
In this study, RBV helps expand our understanding of how resources are applied and combined by the women entrepreneurs to improve their performance and create a competitive advantage. Saunila’s Innovation Capability framework was also helpful in examining and analyzing the nature of the relationship between innovation capabilities and the strategic capability and innovation performance of Bicolana entrepreneurs. Six hypotheses were presented to define the relationship between innovation capabilities, strategic capability, and innovation performance.
Hypothesis 1 proposed that innovation capability leads to the development of a firm’s strategic capability for marketing innovation. This hypothesis is partially supported because it
was only participatory leadership culture, which showed a positive and significant relationship with marketing innovation capability. In Hypothesis 2, it is proposed that innovation capability leads to the development of a firm’s strategic capability on organizational innovation. This hypothesis is only partially supported because it was only participatory leadership culture that showed a positive and significant relationship with OI. Hypothesis 3a proposed that marketing innovation capability results to improved innovation performance as measured in the firm’s financial performance. This is not supported by the study. Hypothesis 3b proposed that marketing innovation capability results in improved firm performance as measured in the firm’s operational performance. This is supported by the study. Hypothesis 4a proposed that marketing innovation capability results in improved firm performance as measured in the firm’s financial performance is not supported by the study. Hypothesis 4b, which proposed that marketing innovation capability results in improved firm performance as measured in the firm’s operational performance, is supported by the study.
For Hypothesis 5a, it was proposed that organizational innovation capability results to improved firm performance as measured in the firm’s financial performance. This is not supported by the study. Hypothesis 6a proposed that organizational innovation capability results in improved firm performance as measured in the firm’s operational performance is not supported by the study.
Based on the result of this study, it is concluded that only one aspect of innovation capability, participatory leadership culture, consistently showed significant and positive relationship with the development of an enterprise’s strategic capability. Given the findings of the study, it is evident that the women entrepreneurs exercised participatory leadership culture in their businesses to encourage their workers to be more creative in developing new products and
generating new ideas to improve either their marketing or organizational innovation practices.
The women entrepreneurs should provide the support for innovation in order to have a positive impact on employees’ creativity and innovation. The study also found that the other six aspects of innovation capability – ideation and organizing structures, work climate and well-being, know-how development, regeneration, external knowledge, and individual activity have very weak correlation with the strategic capabilities and are not statistically significant in the development of strategic capability among the women entrepreneurs. Hence, it appears that other factors need to be included to explain the level of implementation of the different innovation capability aspects among women entrepreneurs.
Moreover, the study showed that the two strategic capabilities have a significant and positive relationship only with operational performance. Hence, women entrepreneurs need to develop these capabilities in order to improve their performance. Overall, the findings imply that a participatory leadership culture is an important antecedent for the development of strategic capabilities among the women entrepreneurs. Moreover, to drive innovation it is important for women to encourage initiative by providing feedback and being part of the ideation processes themselves. However, to generalize the results of this study, additional empirical investigation is needed since the research only covered one region in the country.
6.2 Recommendations
If the enhancement of an innovation culture is important for performance, the challenge for women entrepreneurs and other SME’s is how to embed and boost their innovation capabilities. Based on the findings of this study, the following areas can be the focus of future studies:
First, the six other aspects of innovation capability that were found to have no significant relation to the development of a firm’s strategic capability can be further explored. Although the correlation results show a weak relationship between the two variables, there can be other factors not considered in the model that mediate or influence the relationship between the variables.
Second, the explanatory power of the model used can be improved by considering other factors or cultural variables not examined and can influence conditions within the organization.
Or, the model can look into factors such as the network the women have established and the enabling support given by the government and other institutions in marketing and R & D.
Hence, the entrepreneurs can be encouraged to join and be an active member of industry associations, but they need to register their businesses to avail of the assistance given by government institutions. They also need to participate actively in marketing activities sponsored by both the private and government sectors since their participation can provide needed information such as preferences of the market, improvements in packaging and labelling, and possibly establishment of market linkages.
Third, government should continue providing the necessary marketing support i.e. design and packaging to entrepreneurs especially to those who are just starting. Entrepreneurs A, B, and C acknowledged the important role given to them by government agencies when they were just starting and the continuing assistance being given to them. The support was both in terms of market exposure through their trade fair participation and technical through the provision of equipment for their processing activities.
Fourth, further studies can also be done on the influence of the external environment on the performance of the business. The external environment, based on the Internal Organization (I/O) Model is the primary determinant of a firm’s strategic action. Hence, studying the influence
of the external environment on resource development and performance can provide important insight on the appropriate strategies needed by the women entrepreneurs to implement value- creating strategies.
The findings, conclusions, and recommendations of this study should be understood within the study’s methodological limitations. It is also suggested that a similar study with a more refined methodological approach be conducted to make these findings robust. It is also suggested that the study be replicated for other industries and locations for a more robust result.
Despite the limitations, however, it is hoped that the study’s research findings successfully provided empirical support to Saunila’s attempt to incorporate the concept of innovation into management theory.
