Developing process and product innovation through internal and external knowledge sources in manufacturing Malaysian firms: the role of absorptive capacity

2020 ◽  
Vol 26 (5) ◽  
pp. 1021-1039 ◽  
Author(s):  
T. Ramayah ◽  
Pedro Soto-Acosta ◽  
Khoo Kah Kheng ◽  
Imran Mahmud
Keyword(s):  
Absorptive Capacity ◽  
Product Innovation ◽  
Manufacturing Firms ◽  
Innovation Performance ◽  
Knowledge Sources ◽  
Manufacturing Companies ◽  
Organizational Capability ◽  
Data Set ◽  
Content Type ◽  
External Knowledge

PurposeFirms' knowledge-processing capabilities have a central role in achieving innovation performance and competitive advantage. Absorptive capacity capabilities and innovation are viewed as essential for enterprise success. Absorptive capacity is deemed as a highly important organizational capability to recognize value and assimilate both external and internal knowledge in order to enhance firm innovation. The aim of this study is to determine if innovation performance can be improved through absorptive capacity (knowledge acquisition, dissemination and utilization), when it is supported by internal (firm experience) and external knowledge sources (R&D cooperation and contracted R&D).Design/methodology/approachA quantitative methodology based on employing a structured questionnaire was used for data collection. The proposed research model and its associated hypotheses are tested by using Partial Least Squares (PLS) structural equation modelling (SEM) on a data set of 248 manufacturing companies located in the Northern Region of Malaysia.FindingsResults showed that firms' experience is significantly related to absorptive capacity, while for R&D cooperation and contracted R&D findings were mixed. In addition, absorptive capacity was found as a strong predictor of innovation performance.Originality/valueOne of the defining features of competition in many industries has been the extremely rapid pace of technological change, marked by a continuous stream of innovations. Manufacturing firms, therefore, face the challenge of nurturing existing knowledge and developing novel knowledge in order to create new business opportunities. This study makes valuable contributions with regard to understanding the behavioural of manufacturing firms towards process and product innovation.

scholarly journals Breadth of external knowledge search in service sectors

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Dragana Radicic
Keyword(s):  
Manufacturing Firms ◽  
Innovation Performance ◽  
Single Type ◽  
Service Firms ◽  
Knowledge Sources ◽  
Content Type ◽  
External Knowledge ◽  
Process Innovations ◽  
Knowledge Search ◽  
Product And Process

PurposeThere is a dearth of empirical research on the impact of external knowledge search on innovation performance in different categories of service firms. This study explores the effectiveness of the breadth of external search on product and process innovations in German firms. In particular, the author modelled a non-linear relationship between the breadth of knowledge and product and process innovations.Design/methodology/approachDrawing on the Mannheim Innovation Panel (MIP) data for the German service firms in the period 2014–2016, the author reported findings from a bivariate probit model which took into account mutual interdependence between product and process innovations. Moreover, the model was separately estimated for knowledge-intensive business services (KIBS) and other services. For comparative purposes, the author also estimated the model for manufacturing firms.FindingsEmpirical findings uniformly indicated an inverted U-shaped effect of the breadth of knowledge on both product and process innovations. Furthermore, the results demonstrated that using up to three knowledge sources increases the probability of a joint implementation of product and process innovations. These findings hold for both KIBS firms and other services. However, those service firms that focussed on a single type of innovation experienced diminishing returns to external knowledge when exploiting more than one source of knowledge. These results indicated that a simultaneous introduction of different types of innovation required diverse knowledge sources. In contrast, when focussing on a single type of innovation, service firms experienced diminishing returns when multiple sources were used. However, this finding was only partially found for manufacturing firms. Accordingly, this study’s findings provided support for the demarcation approach, insofar as the breadth of knowledge had a heterogenous impact on innovation in manufacturing relative to service firms.Originality/valuePrevious studies on the breadth of knowledge search mostly examined its influence on innovation performance without separately analysing manufacturing and service firms. The present study focussed on service firms that were further divided into KIBS and other service firms. By investigating potentially non-linear relationships between knowledge breadth and product and process innovations, it illustrated how different innovation strategies were affected by a diverse pool of external knowledge sources.

External knowledge sourcing and innovation in family firms

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Manzoor Ul Akram ◽  
Koustab Ghosh ◽  
Rojers P. Joseph
Keyword(s):  
Social Capital ◽  
Absorptive Capacity ◽  
Product Innovation ◽  
Family Firms ◽  
Family Firm ◽  
Content Type ◽  
External Knowledge ◽  
Mediating Role ◽  
Realized Absorptive Capacity

Purpose This study aims to investigate the external knowledge search behaviors in terms of search breadth and search depth in family firms and the resultant product innovation in Indian context. The authors theorize the mediating role of absorptive capacity (potential and realized absorptive capacity) between knowledge sourcing from external sources and product innovation. Further, the authors examine the moderating role of crucial internal social capital of the family firm in enhancing the use of external knowledge for firm innovation activities. Design/methodology/approach The study uses a quantitative research design taking single informant for collection of data from 151 family small and medium enterprises in automotive sector in India. The authors use structural equation modeling to test hypothesized relationships. Findings The findings indicate that both search breadth and search depth of family firms are positively associated with product innovation in family firms. The authors also find evidence for partial mediating role of potential and realized absorptive capacity in the relationship between search breadth and innovation and search depth and innovation. The results show how family firms learning taking place while scanning external knowledge sources in terms of external absorptive capacity routines. Finally, the authors find that family firm internal social capital positively moderate the relationship between search breadth and depth, and product innovation. Practical implications Family firms need to innovate to remain relevant in the long-run and as such development of superior capabilities is of great significance to them. Family firm managers must be open to external knowledge as such knowledge help them improve the firm level of innovation through absorptive capacity. Further, family firms must realize and act upon the importance of their social capital for the integration and utilization of acquired knowledge. Originality/value This paper is amongst a few papers that take dynamic capability views of innovation in family firms wherein the authors theorize how external search breadth and depth lead to the development of potential and realized absorptive capacity in family firms. The importance of family firm internal social capital as a strong integrating and knowledge sharing mechanism that helps family firms transform external knowledge into innovation is also highlighted.

Product innovation processes and the trade-off between product innovation performance and business performance

2014 ◽  
Vol 17 (1) ◽  
pp. 61-84 ◽  
Author(s):  
Hans Löfsten
Keyword(s):  
Product Innovation ◽  
Business Performance ◽  
Life Cycles ◽  
Innovation Performance ◽  
Innovation Activity ◽  
Data Set ◽  
Trade Off ◽  
Content Type ◽  
Research Framework ◽  
Innovation Processes

Purpose – This paper is concerned with the management and organization of product innovation processes, and how innovation performance relates to business performance. The underlying rationale is that encouraging firms to innovate will lead to a better business performance. Design/methodology/approach – This study leverages a data set of 99 medium-sized technology firms in Sweden. The first part of the analysis in this study aims at finding determinants of product innovation processes, and the second part is the analysis and trade-off between innovation performance and business performance. First, a research framework is developed in which the link between strategic dimensions, process dimensions and organizational dimensions of product innovation activity and product innovation performance is tested. Second, the research framework tests the relationship between innovation performance and business performance (sales and profitability). Findings – Product innovation performance (patent) is affected by seven variables of the 14 variables that represent product innovation processes. Product innovation performance is not affected by firm size, firm age, branch and product life cycles and, in the regression model, all three innovation performance variables (patents, copyrights and licenses) have a positive effect on the firm's sales, but there were no connections to the firm's profitability. Originality/value – The main implication of the study is the idea supporting a multi-aspects approach to the product innovation processes and performance since product innovation process dimensions (variables used in the study) have only partial influence on innovation-/business performance.

Trading places: innovation and performance go head-to-head

2014 ◽  
Vol 30 (6) ◽  
pp. 14-16
Keyword(s):  
Product Innovation ◽  
Business Performance ◽  
Innovation Performance ◽  
Data Set ◽  
Content Type ◽  
Technology Firms ◽  
Trade Offs ◽  
Pertinent Information ◽  
And Performance ◽  
Practical Implications

Purpose – This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies. Design/methodology/approach – This briefing is prepared by an independent writer who adds his own impartial comments and places the articles in context. Findings – This briefing examines the trade-offs that take place between product innovation performance and business performance. It leverages a data set of 99 medium-sized technology firms in Sweden and considers the variables that affect these trade-offs. The paper suggests that while product innovation performance is positively related to the sales of the firm, the links with profitability are rather less proven. Practical implications – The paper provides strategic insights and practical thinking that have influenced some of the world’s leading organizations. Originality/value – The briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and an easy-to-digest format.

Innovation performance of Italian manufacturing firms

2017 ◽  
Vol 20 (3) ◽  
pp. 428-445 ◽  
Author(s):  
Fabio de Oliveira Paula ◽  
Jorge Ferreira da Silva
Keyword(s):  
Structural Equation ◽  
Manufacturing Industry ◽  
Manufacturing Firms ◽  
Innovation Performance ◽  
Equation Modeling ◽  
High Tech ◽  
Content Type ◽  
External Knowledge ◽  
Italian Manufacturing Firms ◽  
Internal Knowledge

Purpose The purpose of this paper is to explain how internal and external sources of knowledge influence the innovation performance (IP) in Italian manufacturing firms and how different these relationships are for low-technology (LT) and high-technology (HT) firms. Design/methodology/approach The study proposed a model relating external knowledge, internal knowledge and IP that was tested using Bayesian structural equation modeling with a sample of Italian manufacturing firms of Community Innovation Survey 2010. It was run separately for high-tech firms (including HT and medium-HT aggregations of manufacturing industries of NACE Rev. 2) and low-tech firms (including LT and medium-LT aggregations). Findings The results showed a difference between high-tech and low-tech manufacturing firms in Italy. The investments to leverage internal knowledge sources are important for high-techs and not significant for low-techs. On the other hand, the level of external KS improves significantly the IP of low-techs and has a negative effect for high-techs. The level of absorptive capacity is central to improve the positive effect of the external knowledge on the IP for all firms, but it is still underdeveloped. Originality/value The effects of 2008 economic crisis hit the Italian manufacturing industry specifically hard and are still felt. Innovation is a solution for firms’ growth and Italy is considered a below-average innovator country in Europe. The study could identify important gaps in Italian manufacturing firms that hinder their innovative performance improvement.

Proactive and reactive corporate social responsibility: antecedent and consequence

2015 ◽  
Vol 53 (2) ◽  
pp. 451-468 ◽  
Author(s):  
Ching-Hsun Chang
Keyword(s):  
Organizational Culture ◽  
Corporate Social Responsibility ◽  
Product Innovation ◽  
Driving Force ◽  
Innovation Performance ◽  
Green Product ◽  
Manufacturing Companies ◽  
Content Type ◽  
Green Product Innovation ◽  
Corporate Social

Purpose – The purpose of this paper is to develop an original framework to explore corporate social responsibility (CSR) plays a mediation role between green organizational culture and green product innovation performance. Design/methodology/approach – This study divides CSR into proactive CSR and reactive CSR. This research employs an empirical study by means of the questionnaire survey method to verify the hypotheses and to explore its managerial implications in Taiwanese manufacturing companies. Structural equation modeling is applied to verify the research framework. Findings – The empirical results verify that green organizational culture positively affects proactive CSR and green product innovation performance. This study shows that proactive CSR mediates the positive relationship between green organizational culture and green product innovation performance, but reactive CSR does not. Green organizational culture is a driving force for proactive CSR and green product innovation performance. Organizational members in Taiwanese companies are exposed to green organizational culture which influences CSR activities. Moreover, this study verifies that proactive CSR of large companies are significantly higher than those of small and medium enterprises (SMEs). Research limitations/implications – There are three limitations of this study. First, this study verifies the hypotheses by means of questionnaire survey which only includes cross-sectional data. Second, this study utilize self-reported data may suffer the problems of common method variance. Third, this study applies a “five-point Likert scale” ranging from 1 to 5 to measure the constructs. Future research can apply a “seven-point Likert scale” to measure the constructs and compare with this study to test the significance of the variability of the data. There are two implications emerging from the study. First, proactive CSR has a positive effect on green product innovation performance, but reactive CSR does not. Second, green organizational culture is a driving force for proactive CSR and green product innovation performance. Originality/value – This study summarizes the literature of CSR into a new managerial framework and highlights the importance of proactive CSR. Therefore, green organizational culture cannot only affect green product innovation performance directly, but also influence it indirectly via proactive CSR in the Taiwanese manufacturing industry. Taiwanese manufacturing companies can increase their green organizational culture and proactive CSR to enhance their green product innovation performance. This study also explores that proactive CSR of large companies are significantly higher than those of SME.

scholarly journals Absorptive capacity and relationship learning mechanisms as complementary drivers of green innovation performance

2018 ◽  
Vol 22 (2) ◽  
pp. 432-452 ◽  
Author(s):  
Gema Albort-Morant ◽  
Antonio L. Leal-Rodríguez ◽  
Valentina De Marchi
Keyword(s):  
Absorptive Capacity ◽  
Manufacturing Sector ◽  
Innovation Performance ◽  
Path Modeling ◽  
Green Innovation ◽  
Learning Mechanisms ◽  
Content Type ◽  
External Knowledge ◽  
Automotive Components ◽  
Knowledge Based

Purpose This paper aims to explore in depth how internal and external knowledge-based drivers actually affect the firms’ green innovation performance. Subsequently, this study analyzes the relationships between absorptive capacity (internal knowledge-based driver), relationship learning (external knowledge-based driver) and green innovation performance. Design/methodology/approach This study relies on a sample of 112 firms belonging to the Spanish automotive components manufacturing sector (ACMS) and uses partial least squares path modeling to test the hypotheses proposed. Findings The empirical results show that both absorptive capacity and relationship learning exert a significant positive effect on the dependent variable and that relationship learning moderates the link between absorptive capacity and green innovation performance. Research limitations/implications This paper presents some limitations with respect to the particular sector (i.e. the ACMS) and geographical context (Spain). For this reason, researchers must be thoughtful while generalizing these results to distinct scenarios. Practical implications Managers should devote more time and resources to reinforce their absorptive capacity as an important strategic tool to generate new knowledge and hence foster green innovation performance in manufacturing industries. Social implications The paper shows the importance of encouraging decision-makers to cultivate and rely on relationship learning mechanisms with their main stakeholders and to acquire the necessary information and knowledge that might be valuable in the maturity of green innovations. Originality/value This study proposes that relationship learning plays a moderating role in the relationship between absorptive capacity and green innovation performance.

The interaction between external and internal knowledge sources: an open innovation view

2014 ◽  
Vol 18 (2) ◽  
pp. 430-446 ◽  
Author(s):  
Nieves L. Díaz-Díaz ◽  
Petra de Saá Pérez
Keyword(s):  
Absorptive Capacity ◽  
Business Strategies ◽  
Knowledge Sources ◽  
Content Type ◽  
External Knowledge ◽  
Sources Of Knowledge ◽  
External Sources ◽  
Internal Sources ◽  
External Sources Of Knowledge ◽  
Internal Knowledge

Purpose – The purpose of this paper is to study the external sources of knowledge that better exploit internal knowledge in order to innovate. Design/methodology/approach – A balanced panel of 1,266 firms that respond to the Survey of Business Strategies for a five-year period was used, which represents a total of 6,330 observations. Findings – The influence of the absorptive capacity on new products is significant, with an inverted U-shaped relationship. The interaction between external sources of knowledge and firm ' s absorptive capacity has a negative effect on innovation up to a certain level (substitution effect), after which that interaction improves the innovation of firms, displaying a complementary effect. Practical implications – Firms with excess of internal sources of knowledge do not obtain better innovative results because overtime firms tend to inertia and need external sources of knowledge to obtain new knowledge. Firms must be conscious that the effect on innovation of using a strategy of external knowledge acquisition could be different depending on their internal knowledge base level. Thus, those firms that select their strategies to combine knowledge appropriately will have better results. Originality/value – This paper reveals that the positive effect of internal sources of knowledge on innovation decline after it reaches a high level because those firms with strong absorptive capacity may enter a state of organizational inertia that reduces their innovation. This research enhances the importance of identifying each of the external knowledge sources likely to be used, since their influence on innovation differs depending on the level of internal knowledge. Finally, this study is based on panel data models, which allows us to control unobservable heterogeneity improving earlier studies that had to rely on cross-sectional data.

scholarly journals Accelerating Green Innovation Performance from the Relations of Network Potential, Absorptive Capacity, and Environmental Turbulence

2021 ◽  
Vol 13 (14) ◽  
pp. 7765
Author(s):  
Shuizheng Song ◽  
Md Altab Hossin ◽  
Xiaohua Yin ◽  
Md Sajjad Hosain
Keyword(s):  
Sustainable Development ◽  
Absorptive Capacity ◽  
Bootstrap Method ◽  
Manufacturing Firms ◽  
Innovation Performance ◽  
Mediation Effect ◽  
Environmental Turbulence ◽  
High Tech ◽  
Green Innovation ◽  
The Relationship

The demand for sustainable development and the advantages of industries are expediting over time with the triggering of green innovation performance (GIP). Improving a firm’s GIP, especially in manufacturing industries, can accelerate green development and mitigate the global-concerned environmental issues. Thus, to investigate GIP from its antecedent factors, we delineate the relationship between network potential, absorptive capacity, environmental turbulence, and GIP based on social network theory, organizational learning theory, and contingency theory. We tested our hypotheses based on 233 sets of questionnaire surveys from high-tech manufacturing firms in China through deploying the hierarchical regression and bootstrap method. Our empirical findings reveal that the network potential dimensions, including network position centrality (NPC), network structure richness (NSR), and network relationship closeness (NRC), significantly positively impacted the GIP. The absorptive capacity (AC) partially mediated the relationship between the network potential dimensions and GIP. Environmental turbulence (ET) as an essential mechanism not only positively moderated the relationship between AC and GIP but also enhanced the AC mediation effect. These findings indicate that manufacturing firms should continue to improve network potential and AC and respond rapidly to changes in the external environment to enhance GIP, consequently contributing to the sustainable development of the economy.

Market responsiveness: antecedents and the moderating role of external supply chain integration

2017 ◽  
Vol 32 (1) ◽  
pp. 30-45 ◽  
Author(s):  
Tuan Luu
Keyword(s):  
Supply Chain ◽  
Supply Chain Integration ◽  
Manufacturing Companies ◽  
Data Set ◽  
Content Type ◽  
Business Context ◽  
Market Responsiveness ◽  
Positive Effect ◽  
Ambidextrous Leadership

Purpose The interaction between opening and closing behaviors of ambidextrous leadership produces “change” force throughout the organization in proactive response to market forces. This research aims to assess the role of ambidextrous leadership in fostering entrepreneurial orientation (EO) and market responsiveness. The research also seeks an insight into how external supply chain integration moderates the positive effect of EO on market responsiveness. Design/methodology/approach Research data were collected from 327 meso-level managers and 517 subordinates from chemical manufacturing companies in the Vietnam business context. Findings Research findings shed light on the positive effect of ambidextrous leadership on EO, which in turn contributes to market responsiveness. The moderation role that external supply chain integration plays on the EO–market responsiveness linkage was also grounded on the data set. Originality/value Through the identification of the predictive roles of ambidextrous leadership and EO for market responsiveness, the current research indicates the convergence between leadership, EO and market responsiveness research streams.

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