A Proposal for a Standard With Innovation Management System

İpek Koçoğlu; Salih Zeki İmamoğlu and Hüseyin İnce
achieved decreasing time and cost of identifying market needs, satisfying customer requirements and
responding to changes in the environment by added-value (Prieto and Revilla, 2006). This way also
the experimentation and the freedom of the employees to take initiatives in improving their business
processes, interactions with the external as well as internal environment and responsibility enhances
the commitment and satisfaction of employees resulting in increased firm performance (Chiva and
Alegre, 2009). According to Baker and Sinkula (1999) the direct influences of organizational learning
can be listed as; (1) the promotion of generative learning as a core competency as a result of
knowledge creation, (2) the questioning of long-held assumptions such as to always follow marketoriented
strategy, instead try to lead the market with new product development strategy for instance,
(3) the realization that customer satisfaction cannot always be maximized with customer feedback
mechanism but innovative disruptions are needed. OLC can be seen as the dynamic capability
building organizations where people continually expand their capacity to create the results they truly
desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set
free, and where people are continually learning to see the whole together (Martinez-Costa and
Jimenez-Jimenez, 2009) which in turn contribute to the knowledge generation, accumulation and
application (Garcia-Morales et al., 2011). Also, OLC leads managers to focus on specific interventions
required to develop learning such as training, seminars, weekly meetings, team works, collaborative
projects to clearly articulate the mission, vision and goals of the organization (Goh, 2003). This way
OLC, encourages the creation of a shared vision among employees, facilitates the understanding of
the gap between the current stage and vision of the organization hence leads to an increased effort
for productivity (Goh and Richards, 1997). However, it would be misleading to state that
organizational learning always leads to increased performance (Garcia-Morales et al., 2011). But it
can be claimed that "organizations that have developed a strong culture of learning are good at the
creation, acquisition and transfer of knowledge, as well as at the modification of behavior to reflect
new knowledge and perspectives" which results in " such as greater flexibility and rapidity of
response, enabling them to face new challenges and act before their competitors do" through
distinctive competencies generated through learning (Bolivar-Ramos et al., 2012). Therefore we
hypothesize that:
H2: Organizational learning capability positively influences firm performance.
3.3 The relationship between innovation and firm performance
Although the link between innovation and performance at various levels of aggregation has been the
focus of attention in a number of studies in recent decades (Lööf and Heshmati, 2006), it is recently
being suggested that the influence of product and process innovation to performance has not been
empirically investigated sufficiently (Calantone, 2002). The ability of firms to satisfy customers’
emerging and complex requirements, meet growing consumer expectations and satisfaction, and
respond rapidly to changing environments, is largely based on their innovation orientation
(Ussahawanitchakit, 2008). Organizations which adopt innovation first are able to protect profit
margins and increase their financial performance through creating an inaccessible knowledge base.
This increases heterogeneity among firms thus positively impacting firm performance (Garcia-Morales
et al., 2011). An organization’s openness, acceptance, and implementation of new ideas, processes,
products or services and propensity to change through adopting new technologies, resources, skills
and administrative systems reflect its innovation orientation, in other words its degree of being ready
to innovation (Ussahawanitchakit, 2008). Innovation orientation strongly improves employees’ job
attitudes, job satisfaction and organizational commitment (Ussahawaniitchakit, 2008). The diffusion of
innovations literature also confirms this view and suggests that firms must be innovative to gain a
competitive edge in order to survive (Calantone et al, 2002). The study of Calantone et al (2002)
resulted in the positive relationship between innovativeness and firm performance. Also the findings in
other studies about new product and process development have resulted in positive relationship
between the two constructs. Firms without these attributes are less likely to stand out in terms of
innovation capability, although they may look elsewhere to find ways to survive (Calantone et al,
2002). Recent innovation studies place much emphasis on innovation as a production process, with
new or improved products as a separate output which enhances overall firm performance. This
enables a firm’s overall sales performance to be linked more explicitly to the innovation process
(Klomp and Van Leeuwen, 2001). Klomp and Van Leeuwen conclude that the innovation contributes
significantly to the overall sales performance, productivity (as measured by sales per employee) and
employment growth. Evidence obtained from the extensive literature research provides support for the
consequent hypothesis.
H3: Innovation positively influences firm performance.
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