Resources
3.11 Previous Studies and Researches
Goswami and Mathew (2011) have examined competencies that contribute to innovation in information technology organizations with the purpose to evolve a measure of organization competencies that enable innovation. The study was conducted to comprehend what organizational competencies enable innovation. From the literature review, the authors purpose many competencies that might contribute.
Only four competencies have significant effect on innovation. They are product breadth competency, new business competency innovation adaptability competency and organizational learning competency. Product breadth competency refers to developing new product ranges that are genuine improvements as compared to products currently available. It is also an organization’s ability to implement changes and new ideas into product features. New business development competency refers to
the extent to which the organization focuses on the development of new market opportunities and products. New business development encourages innovation by promoting and discovering new uses for products and services in new markets.
Innovation adaptability competency (absorptive capacity), when combined with resources and other organizational characteristics, can create greater capacity to innovate. The last one is that of organizational learning competency which is recognized as the strongest competency predictor of organizational innovation potential. It enhances knowledge creation and efficiency of innovation.
Hsien-Tang and Hsi-Peng (2010), have conducted research to gain insight into firm’s innovation competencies and at the same time, to develop an instrument to examine innovation competencies. From reviewing literatures, the authors divided innovation competencies into two categories; generic innovation competencies and specific industry-related innovation competency. For generic innovation competencies that most firms probably have, four dimensions of innovation competencies were proposed. These are product-related innovation competency, market-related innovation competency, technology-related innovation competency and organization- related innovation competency. For specific industry-related innovation competencies that come with the specific type of industries was described in term of industry- specific innovation competency. The descriptions of five dimensions are as follows:
The Product-related innovation competency comes up with three sub- dimensions which are:
1) Customization capabilities, which are the ability to understand customers’ needs and develop mechanisms to provide products or process that match with customers’ needs.
2) Human resources capabilities being employees’ skill and knowledge. Firms can provide incentives to encourage employees to come up with creativity that facilitates innovative new products.
3) Product characteristics which are compatibility, complexity and relative advantage of innovation to the decision-makers who decide to adopt or not adopt the innovation.
The market-related innovation competency dimension is divided into sub- dimensions:
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1) Marketing capabilities, as explained that a firm needs to identify market segments that are worthy to enter and a firm also need to achieve the extension of innovation into a new market.
2) Time to market capabilities, as explained that, a firm needs to consider the time to provide innovation that meets customers’ needs, in which the new needs and time-to-market must be matched effectively in order to allow for acceptance of new products.
Technology-related innovation competency is divided into sub-dimensions as follows:
1) R&D activities, refers to a body of empirical research that can expand the potential for the creation of new knowledge and facilitate the development of new products.
2) Technological capabilities are described as building up specialized technological capabilities through the development of cutting-edge technology and also being combined with the current firm’s technology, so they can attain high overall technological competencies.
Organization-related innovation competency has six sub-dimensions as shown below:
1) Operation management, as stated that innovative firms emphasize quality and flexibility. It is true that the most significant characteristics of those firms that have clear direction towards the development of innovation.
2) Supply chain management, a firm needs to allocate and use resources effectively to ensure a stable supply of raw materials.
3) Organizational structure portrays that centralized control and complexity formalization strategy are the main features affecting innovation.
4) Management attitudes that reflects demonstrative and risk-taking attitudes of senior executives can acquire better results in innovation.
5) Business strategy; researches show that firms with well-defined business strategies and development plans can attain high rates of innovation.
6) External resource management, to gain maximum benefit from the resources utilized, firms need the ability to make effective use of external resources in combination with their own core competency.
For industry-specific innovation competency, the following sub-dimension of innovation competencies are related to what firms should have in order to be leaders in a specific industry or have components that can facilitate innovation competencies.
And because the population of this research were communication industries, so the description and definition of industry-specific innovation competencies in this research were related to the competencies that the communication industry should have. In order to make the elaboration of this innovation competency become more generic and applicable to other industries, the implication from the research will be described by interpreting the characteristics of industry-specific innovation competency in this research and we described industry-specific innovation competencies that imply to what firms should have in order to facilitate their industry- specific innovation competencies eventually. Industry-specific innovation competency contains four sub-dimensions as follows:
1) System integration capabilities which are described as the combination of all abilities of firms to develop all parts of a system to function well related to characteristics of firm’s industry such as having culture of creativeness, ability to renovate and redesign and etc.
2) Special process capabilities; which is the developments process in organization requiring project team to deal with know-how, communication, coordination, management, ability to design and execute standard of process.
3) Special function capabilities; according to the firm’s industry, they should have special function capabilities that can accomplish the objective of its work. That means, firms should have capabilities to do their work that can help the company to produce effective outcomes comparing to competitors.
4) Special operation capabilities: companies must be capable to generate operations that can gain better systems or mechanisms to improve firm’s operation, for example, flexible capability to accommodate changes, systems or mechanisms to upgrade the firm’s operation.
The benefits that are gained from reviewing this previous research are the implications that can be used to develop instruments to measure innovation competencies of a firm, and as well as the reviewing also implies the determinants of innovation competencies.
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Shyu et al. (2006) studied organizational innovation in vocational education and proposed a model containing factors that affect innovation performance. The authors developed constructs of capability of organizational innovation as organization level and facilitating factors of innovation as innovative activity level.
Both levels generate effects on innovation performance as shown in Figure 3.14.
Figure 3.14 Factors Influencing Innovative Performance Source: Shyu et al, 2006.
Two universities in Taiwan were the sample of this study. The findings were as follows:
1) capability of organizational innovation implies generation of innovation ideas and activities
2) capability of organizational innovation positively implies innovation performance