LINKING INNOVATION CAPABILITY TO

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LINKING INNOVATION CAPABILITY TO

BUSINESS PERFORMANCE OF BICOLANA ENTREPRENEURS

Ma Cresilda M. Caning

Master in Agribusiness, University of Queensland, 2002 Master in Business Administration, Ateneo de Manila, 1997 BS Agribusiness, University of the Philippines at Los Banos, 1987

A Dissertation Submitted in Partial Fulfillment of the Requirements for the Degree of

Doctor of Business Administration

Management and Organization Department Ramon V. del Rosario College of Business

De La Salle University May 27, 2021

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APPROVAL SHEET

This dissertation hereto entitled:

“LINKING INNOVATION CAPABILITY TO FIRM PERFORMANCE OF BICOLANA ENTREPRENEURS”

requirements for the degree of Doctor of Business Administration has been

examined and is recommended for acceptance and approval for ORAL EXAMINATION.

Prof. Divina Edralin Adviser

Approved by the Committee on Oral Examination with a grade of PASSED on May 27, 2021

Dr. Maria Victoria Tibon Chair

Dr. Rachel Quero Dr. Luz Suplico-Jeong Member Member

Dr. Benito Teehankee Dr. Ronald Pastrana Member Member

Accepted in partial fulfillment of the requirements for the degree of Doctor of Business Administration.

Dr. Emilina Sarreal

Dean

Management and Organization Department Ramon V. del Rosario College of Business

De La Salle University

prepared and submitted MA. CRESILDA M. CANING in partial fulfillment of the

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Ma. Cresilda M. Caning

July 4, 2022

Linking Innovation Capability to Firm Performance of Bicolana Entrepreneurs

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Acknowledgment

For without Him we are nothing! With this, I would like to express my gratefulness to the Lord and to our Ina, the Lady of Peñafrancia, for paving the way for me to study in the best possible schools, for providing me with mentors who challenged, nurtured, and moulded me into a wholeness unique unlike any other, for giving me like minded lifelong-learners with whom I can share the joys and difficulties of pursuing graduate studies, and for friends and colleagues who encouraged me and prayed for my success.

I owe a debt of gratitude to my family, my nanay and tatay, my siblings, and my three daughters Trish, Gela, and Anna for believing in me, for being with me, and pushing me on this challenging and, at times, solitary journey. My spouse, +Vic, deserves special gratitude for his understanding, support, and the unwavering faith in my abilities to complete my studies.

My sincere thanks are extended to my Adviser, Dr. Divina M. Edralin, for her guidance and for providing the needed direction; and, to my Dissertation Committee members for sharing their time and expertise on how the study can be improved. Finally, I would like to extend my appreciation to all my unnamed women-research respondents for sharing your time and your stories with me. I will always have a deep respect for all of you; you took the risk and you overcame it.

For all these, thank you. I am because of all of you!

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Abstract

If innovation is perceived as important to business growth then it is imperative for businesses to foster the capability to innovate. With this premise, this research explored the relationship between the different aspects of innovation capability to an enterprise’s strategic capability, as indicated by their marketing and organizational innovation practices, and of strategic capability to the business performance of the Bicolana pili processors. The RBV framework was used as an anchor framework in examining the relationship of the different aspects of innovation capability to the strategic capability of 92 Bicolana pili processors and eventually to their financial and operational performances. Using the sequential mixed method, the research found that of the different innovation capability aspect, it was only the participatory leadership culture that showed a positive significant relationship to both marketing and organizational innovation capability. Further, result of the stepwise regression analysis revealed that marketing innovation has significant relationship to increase in profit, innovation in product and services, and innovation in process. For the organizational innovation, results showed that it has significant relationship to adoption of new business practice, an operational performance indicator.

Considering the result of the study, the research recommends that further study on other factors not considered in the model that can mediate or influence the relationship between the different variables. Similarly, given the geographical context of the study, there might be other cultural variables, not examined but can influence conditions within the organization to be studied. Also, further studies on the influence of the external environment on the performance of the business can be done since this study focuses on the internal environment of the business. Finally, the study suggests a new innovation capability model with people-centric leadership culture replacing participatory leadership culture. The new construct is characterized by a people- centric leadership and open communication and is posited as a determinant of both marketing and organizational innovation capability. It is suggested that the explanatory power of the proposed innovation capability model can be improved by considering other 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. It is also suggested that the government should continue providing the necessary marketing support i.e. design and packaging to entrepreneurs and organizational support such as the provision of the necessary equipment, especially to the start-ups to enhance the innovativeness and ensure the business performance and sustainability of rural-based women entrepreneurs.

Keywords: Innovation capability, women entrepreneur, Bicolana entrepreneur, Rural based women entrepreneur

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List of Tables

Table 1. Summary of researches on the relationship between innovation capability and

performance ... 60

Table 2. Summary of innovation success measures... 83

Table 3. Number of research participants, by province ... 94

Table 4. Summary of Cronbach’s Alpha Values ... 96

Table 5. Model Summary of the Stepwise Multiple Regression Result between the Innovation Capability Aspects and Marketing Innovation Capability ... 103

Table 6. ANOVA for the Stepwise Regression between the Innovation Capability Aspects and Marketing Innovation Capability ... 104

Table 7. Coefficient of the Different Model of the Stepwise Multiple Regression on Innovation Capability Aspects and Marketing Innovation Capability ... 105

Table 8. Model Summary of the Stepwise Multiple Regression Result between the Innovation Capability Aspects and Organizational Innovation Capability ... 108

Table 9. ANOVA for the Stepwise Regression between the Innovation Capability Aspects and Organizational Innovation Capability ... 109

Table 10. Coefficient of the Different Model of the Stepwise Multiple Regression on Innovation Capability Aspects and Organizational Innovation Capability ... 110

Table 11. Model Summary of the Stepwise Multiple Regression Result between Strategic Capability and Increase in Profit... 116

Table 12. ANOVA for the Stepwise Regression between Strategic Capability and Increase in Profit ... 117

Table 13. Coefficient of the Different Model of the Stepwise Multiple Regression between the Strategic Capability and Increase in Profit ... 117

Table 14. Model Summary of the Stepwise Multiple Regression Result between Strategic Capability and Innovation in products/services ... 119

Table 15. ANOVA for the Stepwise Regression between Strategic Capability and Innovation in products/services ... 119

Table 16. Coefficient of the Different Model of the Stepwise Multiple Regression Strategic Capability and Innovation in products/services ... 120

Table 17. Model Summary of the Stepwise Multiple Regression Result between Strategic Capability and Innovation in processes ... 121

Table 18. ANOVA for the Stepwise Regression between Strategic Capability Aspects and Innovation in processes ... 122

Table 19. Coefficient of the Different Model of the Stepwise Multiple Regression on Strategic Capability and Innovation in Processes ... 122

Table 20. Model Summary of the Stepwise Multiple Regression Result between the Strategic Capability Aspects and Adoption of New Technologies ... 124

Table 21. ANOVA for the Stepwise Regression between Strategic Capability Aspects and Adoption of New Technologies ... 124

Table 22. Coefficient of the Different Model of the Stepwise Multiple Regression on the Strategic Capability Aspects and Adoption of New Technologies ... 125

Table 23. Model Summary of the Stepwise Multiple Regression Result between the Strategic Capabilities and Quality of Products/Services ... 126

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Products/Services ... 126 Table 25. Coefficient of the Different Model of the Stepwise Multiple Regression on Strategic

Capabilities and Quality of Products/Services ... 127

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List of Figures

Figure 1. Theoretical framework based on Barney’s RBV Model ... 20

Figure 2. Classification of Resources ... 22

Figure 3. Aspects of the innovation capability framework of Saunila relevant to the study ... 26

Figure 4. Conceptual framework of the study ... 29

Figure 5. The study's operational framework ... 33

Figure 6. Mapping the literature on innovation capability ... 70

Figure 8. The different forms of pili ... 90

Figure 9. Research procedure ... 100

Figure 10. Detailed innovation capability model showing specific aspects influencing the development of strategic capability and firm performance ... 142

Figure 11. Proposed innovation capability model ... 144

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List of Appendices

Appendix 1. Directory of pilinut processors in the Bicol Region ... 152

Appendix 2. Survey instrument ... 182

Appendix 3. Sample consent form ... 196

Appendix 4. Certification from the College of Arts and Sciences ... 197

Appendix 5. Classification of intangible resources ... 198

Appendix 6. Correlation between innovation capabilities to marketing innovation capability . 199 Appendix 7. Correlation between innovation capabilities and organizational innovation capability ... 200

Appendix 8. Correlation between marketing innovation capabilities and financial performance ... 201

Appendix 9. Correlation between marketing innovation capabilities and operational performance ... 202

Appendix 10. Correlation between organizational innovation capabilities and financial performance ... 203

Appendix 11. Correlation between organizational innovation capabilities and operational performance ... 204

LINKING INNOVATION CAPABILITY TO