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

Evidence from IT manufacturing companies

Ming Feng Su, Kuo-Chih Cheng, Shao Hsi Chung, Der-fa Chen

Research output: Contribution to journalArticle

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.

Original languageEnglish
Pages (from-to)1316-1331
Number of pages16
JournalJournal of Manufacturing Technology Management
Volume29
Issue number8
DOIs
Publication statusPublished - 2018 Dec 10

Fingerprint

Information technology
Innovation
Industry
Manufacturing companies
Organizational performance
Innovation capability
Information systems
Managers
Manufacturing firms

All Science Journal Classification (ASJC) codes

  • Software
  • Control and Systems Engineering
  • Computer Science Applications
  • Strategy and Management
  • Industrial and Manufacturing Engineering

Cite this

@article{acdaee4b06024093b48783f71333c10a,
title = "Innovation capability configuration and its influence on the relationship between perceived innovation requirement and organizational performance: Evidence from IT manufacturing companies",
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.",
author = "Su, {Ming Feng} and Kuo-Chih Cheng and Chung, {Shao Hsi} and Der-fa Chen",
year = "2018",
month = "12",
day = "10",
doi = "10.1108/JMTM-03-2018-0097",
language = "English",
volume = "29",
pages = "1316--1331",
journal = "Journal of Manufacturing Technology Management",
issn = "1741-038X",
publisher = "Emerald Group Publishing Ltd.",
number = "8",

}

TY - JOUR

T1 - Innovation capability configuration and its influence on the relationship between perceived innovation requirement and organizational performance

T2 - Evidence from IT manufacturing companies

AU - Su, Ming Feng

AU - Cheng, Kuo-Chih

AU - Chung, Shao Hsi

AU - Chen, Der-fa

PY - 2018/12/10

Y1 - 2018/12/10

N2 - 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.

AB - 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.

UR - http://www.scopus.com/inward/record.url?scp=85053277727&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=85053277727&partnerID=8YFLogxK

U2 - 10.1108/JMTM-03-2018-0097

DO - 10.1108/JMTM-03-2018-0097

M3 - Article

VL - 29

SP - 1316

EP - 1331

JO - Journal of Manufacturing Technology Management

JF - Journal of Manufacturing Technology Management

SN - 1741-038X

IS - 8

ER -