International journal of Contemporary Business Studies

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International Journal of Contemporary Business Studies Vol: 3, No: 6. June, 2012 ISSN 2156-7506 Available online at http://www.akpinsight.webs.com Vashisth, 2011). This is because an organizational learning process involved high degree of parallelism and depended on the knowledge based of organization (Weerd-Nederhof, Pacitti, Gomes, & Pearson, 2002). According to Garcıá-Morales, et al., (2006), organizational learning and innovation is positively related to organizational performance. Even, in a study of cultural organization, learning orientation influences innovativeness and performance (Garrido & Camarero, 2010). Due to the broad process of innovation, the learning has enables the implementation of new idea, product and process, new management styles in communication and marketing, organizational structure and relations with clients (Garrido & Camarero, 2010). The impact of learning orientation is studied through three dimensions: commitment to learning, an open mind and a shared vision. Similarly, Phromket and Ussahawanitchakit (2009) has also found that organizational learning have positive effect on innovation outcome and export performance. In the study, organizational learning comprise of unique knowledge establishment, useful knowledge integration, holistic knowledge expansion and effectively knowledge utilization (Phromket & Ussahawanitchakit, 2009). Four processes integrally linked organizational learning : Information acquisition, information distribution, information interpretation and organizational memory used as tool for improvement (Weerd- Nederhof, et al., 2002). In a study to foster innovation, organizational learning is found to be a significant antecedent effect on performance (Jimeńez-Jimenez, Vall, & Hernandez-Espallardo, 2008). According to this author organizational learning is a process to develop new knowledge and insight from people common experiences within organization and it also include four processes such as knowledge acquisition, information distribution, information interpretation and organizational memory (Jimeńez- Jimenez, et al., 2008). Plessis (2007), defined the value proposition of knowledge management in innovation process as assist in creating tools, platform and processes for tacit knowledge creation and sharing, converting tacit knowledge to explicit knowledge, facilitates collaboration in the innovation process, ensures the accessibility of both tacit and explicit knowledge in innovation process, flow of knowledge, integration of organization‟s knowledge base, identify gaps in the knowledge, building competencies, provide organizational context, gathering explicit and tacit knowledge and provide knowledge-driven culture. As noted in the previous section, innovation process involved a dynamic form of activities. Therefore, knowledge management is much needed in this phase such as knowledge creation and knowledge sharing on the innovativeness of the firm (C.-J. Chen, Huang, & Hsiao, 2010). The study showed empirical evidence that knowledge management is positively related to firm innovativeness; however it is moderated by organizational structure. Employees are incline in managing knowledge and translated new knowledge when the structure is less formalized, less centralized and more integrated (C.-J. Chen, et al., 2010). Apart from being direct influence on innovation, knowledge management is crucial as mediating role when examined the relationship between social interaction and innovation performance (Jing-Wen Huang, 2009). However, the dimensions only focus on knowledge acquisition, knowledge sharing and knowledge application (Jing-Wen Huang, 2009). According to Adams, et al., (2006) , there are three areas within the knowledge management that is important for innovation management: idea generation, knowledge repository (including implicit and explicit knowledge), and information flows (information gathering and networking. Besides, knowledge management orientation comprise of knowledge acquisition, knowledge dissemination and responsive to knowledge (Darroch & McNaughton, 2002). In a study to examine the relationship between knowledge management practices and types of innovation, it has postulated that incremental innovation came from firms that sensitive to information about marketplace and responded to knowledge about technology. While radical innovation came from firms developed innovation that change consumer behavior (Darroch & McNaughton, 2002). Copyright © 2012. Academy of Knowledge Process 10
International Journal of Contemporary Business Studies Vol: 3, No: 6. June, 2012 ISSN 2156-7506 Available online at http://www.akpinsight.webs.com 1.5Culture The final managerial lever is culture. Organizational culture includes shared vision where clearer vision would act as effective facilitator to innovation (Adams, et al., 2006). In fact, culture brings values and beliefs, attitudes and experiences which is shared by personnel in organization (Kanchan & Gupta, 2009; Martins & Terblanche, 2003). In order to influence creativity and innovation, culture is influenced by several determinants such as strategy, structure, support mechanisms, behavior, and open communication (Martins & Terblanche, 2003). Culture also reflect a degree to which values, norms and artifacts support the organization‟s innovativeness (Stock & Zacharias, 2011). Thus, it is noted that organizational culture will push organizational members towards creating innovation mentality (Stock & Zacharias, 2011). According to Ahmed (1998), culture has multiple elements which could enhance of exhibit tendency to innovate. He pointed that culture should not be isolated and need to match with organizational context. Thus, balance and understanding of context is important because culture with strong drive towards innovation could lead to problems when market circumstances and customer requirements demand predictability and conforming to specifications (Ahmed, 1998). Implementing innovation in the organization would accommodate risk of failure and uncertainty, Therefore, Kanchan and Gupta (2009) has suggested to change the corporate culture which is important to have a set of understanding that people of an organization share in common. In this context, several criteria have been highlighted to change corporate culture include: committed in becoming innovative organization through informed decision and investment, consistent communication, physical and organizational support, stimulating environment, encouragement for innovation and compensation (Kanchan & Gupta, 2009). These criteria shared similar arguments by previous scholar, Madan (2000), which added the importance of the leadership role of top management values, attitudes and leadership style. There is also other approach to indicate that culture is an operating mechanism to support innovation. For instance, „culture field concept‟ is proposed to promote innovation through climate style management entity (Qingrui, Ling, & Zhangshu, 2003). In this approach, firm need to cultivate employee individual innovative ability so that their firm will form core competencies in all elements of innovation (Qingrui, et al., 2003). An empirical findings on innovation in SMEs has proven that general organization culture and specific organization culture with regards to innovation projected good impact on innovation levels (Kenny & Reedy, 2006). General organization culture is the familiarity of mission statement and R&D aspects of the company while specific culture of innovation were the innovation strategy, type of innovation engaged, drivers and constrains of innovation (Kenny & Reedy, 2006). It is noted most authors have stress on the importance of innovative culture due to the innovation activities as a method of competitive differentiation and ways of customer value creation. For that matter, Dobni (2008) has empirically presented innovation culture constructs based on seven factors: innovation propensity, organizational constituency, creativity and empowerment, market orientation, value orientation and implementation context. In a study of product innovation, it is found that companies should foster cultures with external and flexibility orientation and culture is also act as determinant to innovation strategy (Julia C. Naranjo Valencia, Valle, & Jimenez, 2010). Thus, hocratic cultures (emphasizes flexibility and change) could enhance the development of new products or service while hierarchical cultures inhibit product innovation (Julia C. Naranjo Valencia, et al., 2010). Organization that implemented both radical and incremental innovation is found to have culture that cultivate learning and knowledge sharing contributed significant relationship into innovation (Lin & Edward F. McDonough III, 2011). Besides, innovation culture which is promoted in the organization would depended on the right types norms which is widely shared and activate creativity (Ahmed, 1998). These norms include challenge and belief in action, freedom and risk taking, dynamism and future orientation, external orientation, trust and openness, Copyright © 2012. Academy of Knowledge Process 11
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