Resources
3.10.2 Organizational Resources
Resources have been an interesting issue among scholars for a long time. It is widely known that resources are important. Most researches relate to the study of organization’s resources and methods of efficient resource deployment. Daft, 1983;
Barney, 1991, noted that resources include all assets, capabilities, organizational management process, information, and knowledge of the organization, that enable the organization to deploy for its benefits and implement strategies for resource management that improve its efficiency and effectiveness.
If considering from the concept of resource-based view, the firm is the collective source of resources (Liao, Kickul and Ma, 2009). Generally, organizational
resources can be categorized into two major types, which are tangible resources and intangible resources (Lily and Ahmad, 2010). Tangible resources refer to capital, land, building and supporting equipment, while intangible resources refer to knowledge and skills of personnel. Similarly (Navas and Guerras, 1998), organizational resources are divided into tangible resources and intangible resources. Tangible resources include physical resource and financial resource, whereas intangible resources can be categorized into human resources and non-human resources such as technology source and management resources.
3.10.2.1 Tangible Resources
As mentioned above, tangible resources are divided into physical resources and financial resource. Physical resources relate to infrastructure of management that stimulates managerial operation of an organization to achieve its objectives. Physical resources include computers, tools, equipment, laboratories, buildings, etc. Financial resources include supporting budget or fund allocation that enables the organization to perform and achieve managerial operation.
According to the findings of Prastacos, Spanos and Kostopoulos (2002), financial resources (internal/external capital) and technical resources (physical resource), such as equipment and IT systems, are recognized as the drivers of organization’s capabilities in creating innovations in the IT industry. As a result, it can be concluded that financial resources and physical resources can facilitate innovations in the organization.
Financial resources refer to the budget that is sufficient for completing projects according to the established objectives. Importantly, it requires setting out a clear budget for innovation development stipulated in the school development plans.
Besides, it is necessary to allocate sufficient budgets for any development, such as equipment procurement, building and property development, personnel development, etc. Allocating sufficient budgets for educational management as the goals specified by schools can bring about efficient management. In addition, the executives should provide sufficient budgets for good remuneration and welfare which must be enough to create good morale and motivation for personnel.
Physical resources refer to technological equipment for efficient educational management and technological equipment for efficient information
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communication technology. Physical resources can also refer to a place or location of organization that can be easily accessed. It also refers to sufficient activity rooms and activity corners, including resources facilitating innovations. Chester (1972: 149) stated that physical incentives that play significant roles in an organization refers to working environment, materials, equipment, tools, devices and facilities that are the key factor that contribute to efficiency. Thus, the physical resources are equipment and tools such as computers, internet, and materials, location, buildings, and facilities.
Sufficient time for developing innovation projects is also recognized as physical resources that affect innovation competency.
3.10.2.2 Intangible Resources
Intangible resources in this research can be divided into human resource and knowledge of organization (Prastcos, Spanos and Kostopoulos, 2002).
Bates and Flynn (1995) asserted that the existence of innovation capability rests on an accumulated expertise and set of skills which supports innovation and the accumulated expertise enables or constrains innovation has been identified as knowledge and is based on human and organizational resources. As a result, it can be concluded that intangible resources include human resources and knowledge of organization.
Quality human resources are one of the key factors influencing innovation management in the organization because it is an important capital. Human capital greatly relates to organizational innovation (Santos-Rodrigues, Dorrego and Jardon, 2010). Abilities and skills, including creativity and competencies of an organization’s employees are the attributes of quality human resources of the organization. Chieh-Yu (2007) found that quality human resources have a relationship to the creation of innovation and development in the organization. The same author also stated that quality and good human resources (i.e. good education and well- trained) are the factors supporting innovations. To acquire quality human resources have innovation capabilities, an organization needs to have effective tools to recruit employees who have skills and abilities in creation of innovation.
Personnel who show organizational commitment are also recognized as one characteristic of human resource that encourages an organization’s productivity (Dost, Zia-ur-Rehman and Awan, 2012). Allen and Meyer (1996) defined organizational
commitment as a psychological link between the employee and the organization that makes it less likely that the employee will voluntarily leave the organization. There are about five factors that facilitate commitment in among employees which are clear communication, high job satisfaction, inspired leadership and management, effective management systems and positive work environment (Leininger, 2004). Kimbel (2002) related an organizational commitment questionnaire developed by Mowday, Steers and Porter (1979) to three aspects of organizational commitment that are characterized as: 1) a strong belief in, and acceptance of, the organization’s goals and values. 2) the willingness to exert considerable effort on behalf of organization. 3) a strong desire to maintain membership in the organization.
An organization’s knowledge is the resources of the organization which are necessary for enhancing marketing efficiency and innovations of the organization (Egbu, 2004). Fitchett (1998) stated that knowledge management is the core competency for professionalism in general industries. According to the concept of Drucker (1985), when familiar knowledge is applied, we will call it productivity.
However, when applied knowledge is new and different from the previous one, we will call it innovation. Prahalad and Hamel (1990) proposed that knowledge derived from learning process and learning of the organization is a part of core competencies.
The organization will have a continuous learning process and transform gained knowledge to products and services to meet the needs of customers (Chew, 2008).
Bollinger and Smith (2001) stated that an organization’s knowledge will increase constantly when the organization has good knowledge management. This good knowledge management and organization’s knowledge will cause the organization to have innovations.