Innovation and Organizational Resilience in Selected Manufacturing Firms in Enugu State, Nigeria
CHAPTER ONE
Objectives of the Study
The primary objective of this study is to empirically establish the relationship between innovation and organizational resilience in the Nigerian business environment with a study of some selected manufacturing firms in Enugu state, Nigeria. However, the specific objectives include to:
- Determine the extent to which process innovation affects organizational response.
- Determine the effect of product innovation on business vulnerability.
- Ascertain the nature of the relationship between service innovation and adaptive capacity.
- Ascertain the extent of the relationship between radical innovation and organizational recovery.
CHAPTER TWO
REVIEW OF RELATED LITERATURE
Conceptual framework: Innovation.
Innovation has been and continues to be an important topic of study for a number of different disciplines, including economics, business, engineering, science, and sociology. Despite the fact that innovation has been studied in a variety of disciplines, the term is often poorly understood and can be sometimes confused with related terms such as change, invention, design, and creativity. Most people can provide examples of innovative products such as the iPod or the PC, but few can clearly define the innovative aspects of these products. Among academics there is a difference of opinion about what the term innovation really means. The New Oxford Dictionary of English, 1998, p. 942 defines innovation as: Making changes to something established by introducing something new.
This definition does not suggest that innovation must be radical or that it occurs exclusively to products. Nor does it suggest that innovation is exclusively for large organizations or single entrepreneurs. Nor does it suggest that it is exclusively for profit-making businesses; innovation is as relevant for a hospital or local government as it is for a business. In the organizational context innovation can occur to products, processes, or services.
It can be incremental or radical, and it can occur at various levels in an organization, from management groups and departments to project teams and even individuals.
Innovation is a process that transforms ideas into outputs, which increase customer value. The process can be fed by both good and bad ideas. In management of the innovation process, destroying poor ideas often is as important as nurturing good ones; in this way, scarce resources can be released and good ideas spotlighted. Every good idea usually replaces an older established one. The goal of every organization is the successful development of good ideas. To express this development of good ideas in innovation, we need to add an addendum to our definition:
Innovation is the process of making changes to something established by introducing something new that adds value to customers. This addendum is important. By describing an innovation as adding value to customers, we assume naturally that customers who experience the added value will continue to use the product, process, or service or at least have an improved experience. This in turn will lead to growth for the organization.
Baumol (2004) emphasizes that while innovation is important for the development of organizations and sectors, the scientific literature on the subject has found it difficult to follow the development of a theoretical point of view, especially when dealing with organizational innovations.
Innovation is one of the instruments of growth that leverages a firm upon entering new and existing market,and provide the company with a competitive edge. Innovation opens new grounds and opportunities in both local and international market by offering new products and ideas to both local and foreign markets.
Innovation is generally understood as the successful introduction of a new thing or method, innovation is the embodiment, combination, or synthesis of knowledge in original, relevant, valued new products, processes, or service. Luecke and Katz (2003).
Plessis (2007) delineated innovation as a formation of new knowledge which helps the new business returns, which has purpose to make organization internal business process and structure more sophisticated and produce the market acceptable product and services
Companies cannot grow through cost reduction and reengineering alone… innovation is the key element in providing aggressive top-line growth and for increasing bottom – line results Davila et al (2006). Organizations have identified the numerous advantages presented by innovation and have seek to explore it in every possible way, either to improve quality or create new market or sometimes in attempt to reduce labour cost.
The term innovation may refer to both radical and incremental changes in thinking, in things, in process or in service Mckeown, (2008) Innovation can be looked at from two fronts of:
- Radical Innovation
- Incremental Innovation
CHAPTER THREE
METHODOLOGY
Research Design
Research design is a detailed blueprint used to guide a research study towards its objective (Aaker, Kumar and Day 1998). Thus, a survey design (cross sectional design) was employed. A cross sectional design is the investigation involving a sample of elements selected from the population of interest that are measured at a single point in time (Churchill, 2001). This design is used for this study because a cross section of the entire population was sampled for systematic collection, presentation and analysis of data from individual respondents selected from the three companies.
Sources of Data
Primary Sources of Data
These are originally collected basically for the purpose of the problem under investigation (Onodugo, et al 2010). It contains the data originally assembled by the person who actually observed the phenomenon. Primary data refers to first hand information obtained from the respondents through observation, interview and questionnaire. In this study, observation, questionnaires and interviews was used.
Secondary Source of Data
The secondary source involves the use of existing related data which were produced by earlier researchers. Secondary data was collected from relevant textbooks, Internet, earlier research works, journals and magazines.
CHAPTER FOUR
Presentation And Analysis Of Data
This focuses on presentation and analysis of data generated through the questionnaire administered to the respondents. Tables were used to present the data generated. Regression and correlation analysis were used to test the hypotheses.
CHAPTER FIVE
SUMMARY OF MAJOR FINDINGS, CONCLUSION AND RECOMMENDATIONS
Summary of Findings.
The findings of the study include the following:
- Process innovation affects organizational response to a great extent (R =0.746, R2 = 0.695, p = 0.000 <0.05).
- Product innovation significantly reduces business vulnerability(R =0.962, R2 = 0.926, p= 0.002<0.05).
- There is a positive relationship between service innovation and adaptive capacity (r =0.728, p = 0.000 <0.05).
- There is a significant relationship between radical innovation and organizational recovery (r =0.855; p = 0.001 <0.05).
Conclusions
Based on the findings we therefore conclude that innovative activities should be encouraged in manufacturing firms in order to enhance the resilient stance and capacities of the organization.
Recommendations
Based on the findings of this study, the following recommendations are proffered:
- Organizations through institutionalized policies can effectively manage their innovative tendencies and activities.
- Organizations should create an enabling environment which encourages employee creativity and innovative capacities
- The organizational atmosphere should be structured by management in such a way that appreciates and recognizes employee efforts and contributions to the organization
- Organizations should implement policies and processes which would allow for informed changes to structure, work processes and operations which in turn would be beneficial to the organization
- Organizations should ensure that employees are trained and mentored in respect to their identified strong points and skill areas.
- Organizations should be involved in active horizon scanning to uncover gaps in existing knowledge and commission research to fill those gaps.
Contribution to Knowledge.
Empirically, the study has expanded the quality and quantity of literature in the area of innovation and organizational resilience. Most importantly, the study shows that organizations that are not flexible in terms of innovation will die off due to pressure from the business environment. The study highlights the importance of innovation in the manufacturing industry in Enugu state.
Suggestions for further Studies
Given the fact that no study is exhaustive, the following areas should be studied:
The impact of innovation on organizational resilience in service industry.
The role of innovation in building organizational flexibility.
Effective innovation and the survival of organizations.
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