2.3. Organizational Culture and Innovation
A small number of studies on the relationship between organizational culture and innovation among SMEs in Malaysia limit comprehensive understanding on the dynamic of organizational culture- innovation. In view of this limitation, most previous studies were derived from international repository. Perhaps, one of the most relevant studies is the one conducted by Valencia et al (2010). Using structural equation modeling to analyze 420 responses from organizations which have more than 25 employees in Southern Europe, they found product innovation is positively associated with adhocracy culture and has negative relationship with hierarchal cultures. Adhocracy culture characteristics include creativity, empowerment, freedom and autonomy and risk taking, which in essence parallel with Involvement dimension in Denison Model of Organizational Culture. As such, this study hypothesized that;
H1: There is a significant relationship between Involvement and product innovativeness
Valencia et al (2010) also found that product innovation is stimulated by organizational culture that embraces external and flexible orientation. Flexibility orientation is similar with Adaptability dimension of Denison model of organizational culture. Thus, this study postulated that H2: There is a significant relationship between Adaptability and product innovativeness
Bart (2004) asserts that mission is a critical starting point for enhancing firm innovativeness and has been linked with new product success. Thus, this study hypothesized that;
H3: There is a significant relationship between mission and product innovativeness
McShane et al. (2013) proposed a model of potential benefits and contingencies of culture strength which is labelled as Consistency in Denison’s model of organizational culture. Strong cultures would stimulate innovation if the culture content fits the environment and adaptive in nature. As such, it is hypothesized that;
H4: There is a significant relationship between consistency and product innovativeness
2.3. Organizational Culture and InnovationA small number of studies on the relationship between organizational culture and innovation among SMEs in Malaysia limit comprehensive understanding on the dynamic of organizational culture- innovation. In view of this limitation, most previous studies were derived from international repository. Perhaps, one of the most relevant studies is the one conducted by Valencia et al (2010). Using structural equation modeling to analyze 420 responses from organizations which have more than 25 employees in Southern Europe, they found product innovation is positively associated with adhocracy culture and has negative relationship with hierarchal cultures. Adhocracy culture characteristics include creativity, empowerment, freedom and autonomy and risk taking, which in essence parallel with Involvement dimension in Denison Model of Organizational Culture. As such, this study hypothesized that;H1: There is a significant relationship between Involvement and product innovativenessValencia et al (2010) also found that product innovation is stimulated by organizational culture that embraces external and flexible orientation. Flexibility orientation is similar with Adaptability dimension of Denison model of organizational culture. Thus, this study postulated that H2: There is a significant relationship between Adaptability and product innovativenessBart (2004) asserts that mission is a critical starting point for enhancing firm innovativeness and has been linked with new product success. Thus, this study hypothesized that;H3: There is a significant relationship between mission and product innovativenessMcShane et al. (2013) proposed a model of potential benefits and contingencies of culture strength which is labelled as Consistency in Denison’s model of organizational culture. Strong cultures would stimulate innovation if the culture content fits the environment and adaptive in nature. As such, it is hypothesized that;H4: There is a significant relationship between consistency and product innovativeness
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