The Impact of Managerial and Adaptive Capabilities to Stimulate Organizational Innovation in SMEs: A Complementary PLS–SEM Approach
Abstract
:1. Introduction
2. Conceptual Model Development and Research Variables
2.1. Managerial Capability
2.2. Adaptive Capability
2.3. Organizational Innovation
3. Hypothesis Development
3.1. Managerial Capability and Adaptive Capability
3.2. Adaptive Capability and Organizational Innovation
3.3. Managerial Capability and Organizational Innovation
4. Research Methodology and Measurement
4.1. Data Collection and Sample
4.2. Measurement Variables
5. Empirical Results and Analysis
5.1. Model Evaluation of PLS-SEM
5.2. Evaluation of the Measurement Model
5.3. Evaluation of the Structural Model
5.4. Predictive Validity of PLS Path Model Using Holdout Samples
5.5. Importance-Performance Matrix Analysis (IPMA)
6. Discussion and Implications
7. Concluding Remarks
Author Contributions
Conflicts of Interest
References
- Bullinger, H.-J.; Bannert, M.; Brunswicker, S. Managing Innovation Capability in SMEs. Available online: http://www.techmonitor.net/tm/images/9/9f/07may_jun_sf1.pdf (accessed on 6 November 2017).
- Rivard, S.; Raymond, L.; Verreault, D. Resource-based view and competitive strategy: An integrated model of the contribution of information technology to firm performance. J. Strateg. Inf. Syst. 2006, 15, 29–50. [Google Scholar] [CrossRef]
- Bititci, U.S.; Ackermann, F.; Ates, A.; Davies, J.D.; Gibb, S.; MacBryde, J.; Mackay, D.; Maguire, C.; van der Meer, R.; Shafti, F. Managerial processes: An operations management perspective towards dynamic capabilities. Prod. Plan. Control 2011, 22, 157–173. [Google Scholar] [CrossRef] [Green Version]
- Grimaldi, M.; Quinto, I.; Rippa, P. Enabling open innovation in small and medium enterprises: A dynamic capabilities approach. Knowl. Process Manag. 2013, 20, 199–210. [Google Scholar] [CrossRef]
- Saunila, M. Innovation capability for sme success: Perspectives of financial and operational performance. J. Adv. Manag. Res. 2014, 11, 163–175. [Google Scholar] [CrossRef]
- Inan, G.G.; Bititci, U.S. Understanding organizational capabilities and dynamic capabilities in the context of micro enterprises: A research agenda. Procedia Soc. Behav. Sci. 2015, 210, 310–319. [Google Scholar] [CrossRef]
- Rahman, M.; Doroodian, M.; Kamarulzaman, Y.; Muhamad, N. Designing and validating a model for measuring sustainability of overall innovation capability of small and medium-sized enterprises. Sustainability 2015, 7, 537. [Google Scholar] [CrossRef]
- Whittaker, D.H.; Fath, B.P.; Fiedler, A. Assembling capabilities for innovation: Evidence from new zealand SMEs. Int. Small Bus. J. 2016, 34, 123–143. [Google Scholar] [CrossRef]
- Tidd, J.; Bessant, J. Managing Innovation: Integrating Technological, Market and Organizational Change, 5th ed.; John Wiley & Sons: Chichester, UK, 2013. [Google Scholar]
- Porter, M.E. The Competitive Advantage of Nations; Free Press: New York, NY, USA, 1990. [Google Scholar]
- Day, G.S. The capabilities of market-driven organizations. J. Mark. 1994, 58, 37–52. [Google Scholar] [CrossRef]
- Barney, J. Firm resources and sustained competitive advantage. J. Manag. 1991, 17, 99–120. [Google Scholar] [CrossRef]
- Teece, D.J.; Pisano, G.; Shuen, A. Dynamic capabilities and strategic management. Strateg. Manag. J. 1997, 18, 509–533. [Google Scholar] [CrossRef]
- Evaristo, R.; Zaheer, S. Making the most of your firm’s capabilities. Bus. Horiz. 2014, 57, 329–335. [Google Scholar] [CrossRef]
- Sternad, D.; Jaeger, S.; Staubmann, C. Dynamic capabilities of resource-poor exporters: A study of SMEs in New Zealand. Small Enterp. Res. 2013, 20, 2–20. [Google Scholar] [CrossRef]
- Kor, Y.Y.; Mesko, A. Dynamic managerial capabilities: Configuration and orchestration of top executives’ capabilities and the firm’s dominant logic. Strateg. Manag. J. 2013, 34, 233–244. [Google Scholar] [CrossRef]
- Boonpattarakan, A. Model of thai small and medium sized enterprises’ organizational capabilities: Review and verification. J. Manag. Res. 2012, 4, 15–42. [Google Scholar] [CrossRef]
- Ambrosini, V.; Bowman, C.; Collier, N. Dynamic capabilities: An exploration of how firms renew their resource base. Br. J. Manag. 2009, 20, S9–S24. [Google Scholar] [CrossRef] [Green Version]
- Protogerou, A.; Caloghirou, Y.; Lioukas, S. Dynamic capabilities and their indirect impact on firm performance. Ind. Corp. Chang. 2012, 21, 615–647. [Google Scholar] [CrossRef]
- Sawers, J.L.; Pretorius, M.W.; Oerlemans, L.A.G. Safeguarding SMEs dynamic capabilities in technology innovative SME-large company partnerships in South Africa. Technovation 2008, 28, 171–182. [Google Scholar] [CrossRef]
- Yu, J. Dimensions of firm integrative capability from the perspective of systems engineering. Syst. Eng. Procedia 2012, 4, 393–401. [Google Scholar] [CrossRef]
- Ali, M.; Seny Kan, K.A.; Sarstedt, M. Direct and configurational paths of absorptive capacity and organizational innovation to successful organizational performance. J. Bus. Res. 2016, 69, 5317–5323. [Google Scholar] [CrossRef]
- Palomino, M.A.; Bardsley, S.; Bown, K.; De Lurio, J.; Ellwood, P.; Holland-Smith, D.; Huggins, B.; Vincenti, A.; Woodroof, H.; Owen, R. Web-based horizon scanning: Concepts and practice. Foresight J. Futures Stud. Strateg. Think. Policy 2012, 14, 355–373. [Google Scholar] [CrossRef]
- Paliokaitė, A.; Pačėsa, N. The relationship between organisational foresight and organisational ambidexterity. Technol. Forecast. Soc. Chang. 2015, 101, 165–181. [Google Scholar] [CrossRef]
- Eshima, Y.; Anderson, B.S. Firm growth, adaptive capability, and entrepreneurial orientation. Strateg. Manag. J. 2017, 38, 770–779. [Google Scholar] [CrossRef]
- Bhamra, R.; Dani, S.; Burnard, K. Resilience: The concept, a literature review and future directions. Int. J. Prod. Res. 2011, 49, 5375–5393. [Google Scholar] [CrossRef]
- Burnard, K.; Bhamra, R. Organisational resilience: Development of a conceptual framework for organisational responses. Int. J. Prod. Res. 2011, 49, 5581–5599. [Google Scholar] [CrossRef]
- Gunasekaran, A.; Rai, B.K.; Griffin, M. Resilience and competitiveness of small and medium size enterprises: An empirical research. Int. J. Prod. Res. 2011, 49, 5489–5509. [Google Scholar] [CrossRef]
- Tuominen, M.; Rajala, A.; Möller, K. How does adaptability drive firm innovativeness? J. Bus. Res. 2004, 57, 495–506. [Google Scholar] [CrossRef]
- Adner, R.; Helfat, C.E. Corporate effects and dynamic managerial capabilities. Strateg. Manag. J. 2003, 24, 1011–1025. [Google Scholar] [CrossRef]
- Augier, M.; Teece, D.J. Dynamic capabilities and the role of managers in business strategy and economic performance. Organ. Sci. 2009, 20, 410–421. [Google Scholar] [CrossRef]
- Hodgkinson, G.P.; Healey, M.P. Psychological foundations of dynamic capabilities: Reflexion and reflection in strategic management. Strateg. Manag. J. 2011, 32, 1500–1516. [Google Scholar] [CrossRef]
- Nada, N.; Ali, Z. Integrated interoperability capability model for adaptive and sustainable SMEs. In Enterprise Interoperability vi: Interoperability for Agility, Resilience and Plasticity of Collaborations; Mertins, K., Bénaben, F., Poler, R., Bourrières, J.-P., Eds.; Springer International Publishing: Cham, Switzerland, 2014; pp. 501–511. [Google Scholar]
- Mulder, K.F. Innovation for sustainable development: From environmental design to transition management. Sustain. Sci. 2007, 2, 253–263. [Google Scholar] [CrossRef]
- Nidumolu, R.; Prahalad, C.K.; Rangaswami, M.R. Why sustainability is now the key driver of innovation. Harv. Bus. Rev. 2009, 87, 56–64. [Google Scholar]
- Helfat, C.E.; Peteraf, M.A. The dynamic resource-based view: Capability lifecycles. Strateg. Manag. J. 2003, 24, 997–1010. [Google Scholar] [CrossRef]
- Wernerfelt, B. A resource-based view of the firm. Strateg. Manag. J. 1984, 5, 171–180. [Google Scholar] [CrossRef]
- Amit, R.; Schoemaker, P.J.H. Strategic assets and organizational rent. Strateg. Manag. J. 1993, 14, 33–46. [Google Scholar] [CrossRef]
- Grant, R.M. Prospering in dynamically-competitive environments: Organizational capability as knowledge integration. Organ. Sci. 1996, 7, 375–387. [Google Scholar] [CrossRef]
- Ogarca, R.F. An investigation of decision making styles in SMEs from south-west oltenia region (Romania). Finance 2015, 20, 443–452. [Google Scholar] [CrossRef]
- Kunc, M.H.; Morecroft, J.D.W. Managerial decision making and firm performance under a resource-based paradigm. Strateg. Manag. J. 2010, 31, 1164–1182. [Google Scholar] [CrossRef]
- Sethibe, T.; Steyn, R. The relationship between leadership styles, innovation and organisational performance: A systematic review. S. Af. J. Econ. Manag. Sci. 2015, 18, 325–337. [Google Scholar] [CrossRef]
- Kacem, S.; Harbi, S.E. Leadership, innovation among tunisian ICT SMEs. J. Enterp. Cult. 2014, 22, 283–311. [Google Scholar] [CrossRef]
- Golla, E.; Johnson, R. The relationship between transformational and transactional leadership styles and innovation commitment and output at commercial software companies. Bus. Rev. Camb. 2013, 21, 337–343. [Google Scholar]
- Matzler, K.; Schwarz, E.; Deutinger, N.; Harms, R. The relationship between transformational leadership, product innovation and performancein SMEs. J. Small Bus. Entrep. 2008, 21, 139–151. [Google Scholar] [CrossRef]
- Wright, P.M.; Dunford, B.B.; Snell, S.A. Human resources and the resource based view of the firm. J. Manag. 2001, 27, 701–721. [Google Scholar] [CrossRef]
- Motwani, J.; Levenburg, N.M.; Schwarz, T.V.; Blankson, C. Succession planning in SMEs. Int. Small Bus. J. 2006, 24, 471–495. [Google Scholar] [CrossRef]
- Cabrera-Suárez, K.; Saá-Pérez, P.D.; García-Almeida, D. The succession process from a resource- and knowledge-based view of the family firm. Fam. Bus. Rev. 2001, 14, 37–46. [Google Scholar] [CrossRef]
- Paliokaitė, A. The relationship between organisational foresight and product innovation in small and medium enterprises. In Proceedings of the 8th International Ph.D. School on National Systems of Innovation and Economic Development, Globelics Academy, Rio de Janeiro, Brazil, 20–31 August 2012. [Google Scholar]
- Lockett, A.; Wiklund, J.; Davidsson, P.; Girma, S. Organic and acquisitive growth: Re-examining, testing and extending penrose’s growth theory. J. Manag. Stud. 2011, 48, 48–74. [Google Scholar] [CrossRef] [Green Version]
- Julien, P.-A.; Andriambeloson, E.; Ramangalahy, C. Networks, weak signals and technological innovations among SMEs in the land-based transportation equipment sector. Entrep. Reg. Dev. 2004, 16, 251–269. [Google Scholar] [CrossRef]
- Rathgeber, H.; Kotter, J. Our Iceberg Is Melting: Changing and Succeeding under Any Conditions; St. Martin’s Press: New York, NY, USA, 2006. [Google Scholar]
- McKee, D.O.; Varadarajan, P.R.; Pride, W.M. Strategic adaptability and firm performance—A market-contingent perspective. J. Mark. 1989, 53, 21–35. [Google Scholar] [CrossRef]
- Penrose, E. The Theory of the Growth of the Firm; Billing and Sons Ltd.: Guildford/London/Worcester, UK, 1959. [Google Scholar]
- Sheffi, Y.; Rice, J.B. A supply chain view of the resilient enterprise. MIT Sloan Manag. Rev. 2005, 47, 41–48. [Google Scholar]
- Ponomarov, S.Y.; Holcomb, M.C. Understanding the concept of supply chain resilience. Int. J. Logist. Manag. 2009, 20, 124–143. [Google Scholar] [CrossRef]
- Hamel, G.; Välikangas, L. The quest for resilience. Harv. Bus. Rev. 2003, 81, 52–65. [Google Scholar] [PubMed]
- Park, K.; Ali, M.; Chevalier, F. A spiral process model of technological innovation in a developing country: The case of samsung. Af. J. Bus. Manag. 2011, 5, 5162–5178. [Google Scholar]
- Ali, M.; Park, K. The mediating role of an innovative culture in the relationship between absorptive capacity and technical and non-technical innovation. J. Bus. Res. 2016, 69, 1669–1675. [Google Scholar] [CrossRef]
- Giniuniene, J.; Jurksiene, L. Dynamic capabilities, innovation and organizational learning: Interrelations and impact on firm performance. Procedia Soc. Behav. Sci. 2015, 213, 985–991. [Google Scholar] [CrossRef]
- Breznik, L.; Hisrich, R.D. Dynamic capabilities vs. Innovation capability: Are they related? J. Small Bus. Enterp. Dev. 2014, 21, 368–384. [Google Scholar] [CrossRef]
- Simpson, P.M.; Siguaw, J.A.; Enz, C.A. Innovation orientation outcomes: The good and the bad. J. Bus. Res. 2006, 59, 1133–1141. [Google Scholar] [CrossRef]
- Laforet, S. Organizational innovation outcomes in SMEs: Effects of age, size, and sector. J. World Bus. 2013, 48, 490–502. [Google Scholar] [CrossRef]
- Julien, P.-A.; Raymond, L.; Jacob, R.; Ramangalahy, C. Types of technological scanning in manufacturing SMEs: An empirical analysis of patterns and determinants. Entrep. Reg. Dev. 1999, 11, 281–300. [Google Scholar] [CrossRef]
- Pal, R.; Torstensson, H.; Mattila, H. Antecedents of organizational resilience in economic crises—An empirical study of swedish textile and clothing SMEs. Int. J. Prod. Econ. 2014, 147, 410. [Google Scholar] [CrossRef]
- Barney, J.B.; Wright, P.M. On becmoming a strategic partner: The role of human resources in gaining competitive advantage. Hum. Resour. Manag. 1998, 37, 31. [Google Scholar] [CrossRef]
- Colbert, B.A. The complex resource-based view: Implications for theory and practice in strategic human resource management. Acad. Manag. Rev. 2004, 29, 341–358. [Google Scholar]
- Chadwick, C.; Dabu, A. Human resources, human resource management, and the competitive advantage of firms: Toward a more comprehensive model of causal linkages. Organ. Sci. 2009, 20, 253–272. [Google Scholar] [CrossRef]
- Brien, E.O.; Hamburg, I. Supporting sustainable strategies for SMEs through training, cooperation and mentoring. High. Educ. Stud. 2014, 4, 61–69. [Google Scholar] [CrossRef]
- Thassanabanjong, K.; Miller, P.; Marchant, T. Training in thai SMEs. J. Small Bus. Enterp. Dev. 2009, 16, 678–693. [Google Scholar] [CrossRef]
- Nieves, J.; Haller, S. Building dynamic capabilities through knowledge resources. Tour. Manag. 2014, 40, 224–232. [Google Scholar] [CrossRef]
- Aminu, M.I.; Mahmood, R. Mediating role of dynamic capabilities on the relationship between intellectual capital and performance: A hierarchical component model perspective in PLS-SEM path modeling. Res. J. Bus. Manag. 2015, 9, 443–456. [Google Scholar] [CrossRef]
- Vargo, J.; Seville, E. Crisis strategic planning for SMEs: Finding the silver lining. Int. J. Prod. Res. 2011, 49, 5619–5635. [Google Scholar] [CrossRef]
- Von der Gracht, H.A.; Vennemann, C.R.; Darkow, I.-L. Corporate foresight and innovation management: A portfolio-approach in evaluating organizational development. Futures 2010, 42, 380–393. [Google Scholar] [CrossRef]
- Ar, I.M.; Baki, B. Antecedents and performance impacts of product versus process innovation: Empirical evidence from SMEs located in turkish science and technology parks. Eur. J. Innov. Manag. 2011, 14, 172–206. [Google Scholar]
- O’Regan, N.; Ghobadian, A.; Sims, M. Fast tracking innovation in manufacturing SMEs. Technovation 2006, 26, 251–261. [Google Scholar] [CrossRef]
- García-Morales, V.J.; Matías-Reche, F.; Hurtado-Torres, N. Influence of transformational leadership on organizational innovation and performance depending on the level of organizational learning in the pharmaceutical sector. J. Organ. Chang. Manag. 2008, 21, 188–212. [Google Scholar] [CrossRef]
- Noruzy, A.; Dalfard, V.M.; Azhdari, B.; Nazari-Shirkouhi, S.; Rezazadeh, A. Relations between transformational leadership, organizational learning, knowledge management, organizational innovation, and organizational performance: An empirical investigation of manufacturing firms. Int. J. Adv. Manuf. Technol. 2013, 64, 1073–1085. [Google Scholar] [CrossRef]
- Overstreet, R.E.; Hanna, J.B.; Byrd, T.A.; Cegielski, C.G.; Hazen, B.T. Leadership style and organizational innovativeness drive motor carriers toward sustained performance. Int. J. Logist. Manag. 2013, 24, 247–270. [Google Scholar] [CrossRef]
- Ruiz-Jiménez, J.M.; Fuentes-Fuentes, M.D.M. Management capabilities, innovation, and gender diversity in the top management team: An empirical analysis in technology-based SMEs. BRQ Bus. Res. Q. 2016, 19, 107–121. [Google Scholar] [CrossRef]
- Zehir, C.; Özşahin, M. A field research on the relationship between strategic decision-making speed and innovation performance in the case of Turkish large-scale firms. Manag. Decis. 2008, 46, 709–724. [Google Scholar] [CrossRef]
- Sekaran, U.; Bougie, R. Research Methods for Business: A Skill-Building Approach, 6th ed.; John Wiley and Sons Ltd.: West Sussex, UK, 2013. [Google Scholar]
- Jarvis, C.B.; MacKenzie, S.B.; Podsakoff, P.M. A critical review of construct indicators and measurement model misspecification in marketing and consumer research. J. Consum. Res. 2003, 30, 199–218. [Google Scholar] [CrossRef]
- Peter, J.P. Reliability: A review of psychometric basics and recent marketing practices. J. Mark. Res. 1979, 16, 6–17. [Google Scholar] [CrossRef]
- Churchill, G.A. A paradigm for developing better measures of marketing constructs. J. Mark. Res. 1979, 16, 64–73. [Google Scholar] [CrossRef]
- Gerbing, D.W.; Anderson, J.C. An updated paradigm for scale development incorporating unidimensionality and its assessment. J. Mark. Res. 1998, 25, 186–192. [Google Scholar] [CrossRef]
- Mowen, J.C.; Voss, K.E. On building better construct measures: Implications of a general hierarchical model. Psychol. Mark. 2008, 25, 485–505. [Google Scholar] [CrossRef]
- Abbas, M.; Raja, U.; Darr, W.; Bouckenooghe, D. Combined effects of perceived politics and psychological capital on job satisfaction, turnover intentions, and performance. J. Manag. 2014, 40, 1813–1830. [Google Scholar] [CrossRef]
- Raja, U.; Johns, G. The joint effects of personality and job scope on in-role performance, citizenship behaviors, and creativity. Hum. Relat. 2010, 63, 981–1005. [Google Scholar] [CrossRef]
- García-Morales, V.J.; Lloréns-Montes, F.J.; Verdú-Jover, A.J. The effects of transformational leadership on organizational performance through knowledge and innovation. Br. J. Manag. 2008, 19, 299–319. [Google Scholar] [CrossRef]
- Vaccaro, I.G.; Jansen, J.J.P.; Van Den Bosch, F.A.J.; Volberda, H.W. Management innovation and leadership: The moderating role of organizational size. J. Manag. Stud. 2012, 49, 28–51. [Google Scholar] [CrossRef]
- Franco, M.; Matos, P.G. Leadership styles in SMEs: A mixed-method approach. Int. Entrep. Manag. J. 2015, 11, 425–451. [Google Scholar] [CrossRef]
- Mosey, S.; Clare, J.N.; Woodcock, D.J. Innovation decision making in British manufacturing SMEs. Integr. Manuf. Syst. 2002, 13, 176–183. [Google Scholar] [CrossRef]
- O’Regan, N.; Sims, M.; Ghobadian, A. High performance: Ownership and decision-making in SMEs. Manag. Decis. 2005, 43, 382–396. [Google Scholar] [CrossRef]
- Loan-Clarke, J.; Boocock, G.; Smith, A.; Whittaker, J. Competence-based management development in small and medium-sized enterprises: A multi-stakeholder analysis. Int. J. Train. Dev. 2000, 4, 176–195. [Google Scholar] [CrossRef]
- Huang, T.C. The relation of training practices and organizational performance in small and medium size enterprises. Educ. Train. 2001, 43, 437–444. [Google Scholar] [CrossRef]
- Bryan, J. Training and performance in small firms. Int. Small Bus. J. 2006, 24, 635–660. [Google Scholar] [CrossRef]
- Jayawarna, D.; Macpherson, A.; Wilson, A. Training commitment and performance in manufacturing SMEs: Incidence, intensity and approaches. J. Small Bus. Enterp. Dev. 2007, 14, 321–338. [Google Scholar] [CrossRef] [Green Version]
- Simoneaux, S.L.; Stroud, C.L. Business best practices: Succession planning: Intentional and systematic preparation for the future. J. Pension Benefits 2014, 21, 62–63. [Google Scholar]
- Buang, N.A.; Ganefri, G.; Sidek, S. Family business succession of smes and post-transition business performance. Asian Soc. Sci. 2013, 9, 79–92. [Google Scholar] [CrossRef]
- Sharma, P.; Chrisman, J.J.; Chua, J.H. Succession planning as planned behavior: Some empirical results. Fam. Bus. Rev. 2003, 16, 1–15. [Google Scholar] [CrossRef]
- McAdam, R.; Stevenson, P.; Armstrong, G. Innovative change management in SMEs: Beyond continuous improvement. Logist. Inf. Manag. 2000, 13, 138–149. [Google Scholar] [CrossRef]
- Bold, E.O. Basic concepts of change management of SMEs. J. Adv. Res. Manag. 2010, 1, 102–111. [Google Scholar]
- Popescu, D.; Ciocarlan-Chitucea, A.; Steriu, A.; State, C. Change management—Condition of organizational sustainability in IT&C small and medium-sized enterprises. Amfiteatru Econ. 2012, 14, 333–348. [Google Scholar]
- Reinmoeller, P.; Baardwijk, N.V. The link between diversity and resilience. MIT Sloan Manag. Rev. 2005, 46, 61–65. [Google Scholar]
- Ates, A.; Bititci, U. Change process: A key enabler for building resilient SMEs. Int. J. Prod. Res. 2011, 49, 5601–5648. [Google Scholar] [CrossRef]
- Demmer, W.A.; Vickery, S.K.; Calantone, R. Engendering resilience in small- and medium-sized enterprises (SMEs): A case study of demmer corporation. Int. J. Prod. Res. 2011, 49, 5395–5413. [Google Scholar] [CrossRef]
- Guan, J.; Ma, N. Innovative capability and export performance of Chinese firms. Technovation 2003, 23, 737–747. [Google Scholar] [CrossRef]
- Salavou, H.; Baltas, G.; Lioukas, S. Organisational innovation in SMEs: The importance of strategic orientation and competitive structure. Eur. J. Mark. 2004, 38, 1091–1112. [Google Scholar] [CrossRef]
- Laforet, S. Chapter 6: Organizational innovation and outcomes in SMEs. In Organizational Culture, Business-to-Business Relationships, and Interfirm Networks; Woodside, A.G., Ed.; Emerald Group Publishing Limited: Bingley, UK, 2010; pp. 341–362. [Google Scholar]
- Weerawardena, J.; Mavondo, F.T. Capabilities, innovation and competitive advantage. Ind. Mark. Manag. 2011, 40, 1220–1223. [Google Scholar] [CrossRef]
- Lawson, B.; Samson, D. Developing innovation capability in organisations: A dynamic capabilities approach. Int. J. Innov. Manag. 2001, 5, 377–400. [Google Scholar] [CrossRef]
- Camisón, C.; Villar-López, A. Non-technical innovation: Organizational memory and learning capabilities as antecedent factors with effects on sustained competitive advantage. Ind. Mark. Manag. 2011, 40, 1294–1304. [Google Scholar] [CrossRef]
- Laforet, S. A framework of organisational innovation and outcomes in SMEs. Int. J. Entrep. Behav. Res. 2011, 17, 380–408. [Google Scholar] [CrossRef]
- Dadfar, H.; Dahlgaard, J.J.; Brege, S.; Alamirhoor, A. Linkage between organisational innovation capability, product platform development and performance. Total Qual. Manag. Bus. Excell. 2013, 24, 819–834. [Google Scholar] [CrossRef]
- Henseler, J.; Ringle, C.M.; Sarstedt, M. A new criterion for assessing discriminant validity in variance-based structural equation modeling. J. Acad. Mark. Sci. 2015, 43, 115–135. [Google Scholar] [CrossRef]
- Sarstedt, M.; Ringle, C.M.; Hair, J.F. Partial least squares structural equation modeling. In Handbook of Market Research; Homburg, C., Klarmann, M., Vomberg, A., Eds.; Springer International Publishing: Cham, Switzerland, 2017; pp. 1–40. [Google Scholar]
- Richter, N.F.; Cepeda, G.; Roldán, J.L.; Ringle, C.M. European management research using partial least squares structural equation modeling (PLS-SEM). Eur. Manag. J. 2015, 33, 1–3. [Google Scholar] [CrossRef]
- Rönkkö, M.; McIntosh, C.N.; Antonakis, J. On the adoption of partial least squares in psychological research: Caveat emptor. Personal. Individ. Diff. 2015, 87, 76–84. [Google Scholar] [CrossRef]
- Rönkkö, M.; Evermann, J. A critical examination of common beliefs about partial least squares path modeling. Organ. Res. Methods 2013, 16, 425–448. [Google Scholar] [CrossRef]
- Rönkkö, M.; McIntosh, C.N.; Antonakis, J.; Edwards, J.R. Partial least squares path modeling: Time for some serious second thoughts. J. Oper. Manag. 2016, 47–48, 9–27. [Google Scholar] [CrossRef]
- Rigdon, E.E. Choosing PLS path modeling as analytical method in european management research: A realist perspective. Eur. Manag. J. 2016, 34, 598–605. [Google Scholar] [CrossRef]
- Henseler, J.; Dijkstra, T.K.; Sarstedt, M.; Ringle, C.M.; Diamantopoulos, A.; Straub, D.W.; David, J.; Ketchen, J.; Hair, J.F.; Hult, G.T.M.; et al. Common beliefs and reality about PLS: Comments on rönkkö and evermann (2013). Organ. Res. Methods 2014, 17, 182–209. [Google Scholar] [CrossRef]
- Sarstedt, M.; Hair, J.F.; Ringle, C.M.; Thiele, K.O.; Gudergan, S.P. Estimation issues with PLS and CBSEM: Where the bias lies! J. Bus. Res. 2016, 69, 3998–4010. [Google Scholar] [CrossRef]
- Roldán, J.L.; Sánchez-Franco, M.J. Variance-based structural equation modeling: Guidelines for using partial least squares in information systems research. In Research Methodologies, Innovations and Philosophies in Software Systems Engineering and Information Systems; Mora, M., Ed.; IGI Global: Hershey, PA, USA, 2012; pp. 193–221. [Google Scholar]
- Chin, W.W. How to write up and report PLS analyses. In Handbook of Partial Least Squares: Concepts, Methods and Applications; Esposito Vinzi, V., Chin, W.W., Henseler, J., Wang, H., Eds.; Springer: Berlin/Heidelberg, Germany, 2010; pp. 655–690. [Google Scholar]
- Hair, J.F.; Sarstedt, M.; Ringle, C.M.; Mena, J.A. An assessment of the use of partial least squares structural equation modeling in marketing research. J. Acad. Mark. Sci. 2012, 40, 414–433. [Google Scholar] [CrossRef]
- Hair, J.F.; Sarstedt, M.; Ringle, C.M.; Gudergan, S.P. Advanced Issues in Partial Least Squares Structural Equation Modeling; SAGE Publications, Incorporated: Thousand Oaks, CA, USA, 2017. [Google Scholar]
- Chin, W.W. Issues and opinion on structural equation modeling. MIS Q. 1998, 22, 7–16. [Google Scholar]
- Fornell, C.; Larcker, D.F. Structural equation models with unobservable variables and measurement error: Algebra and statistics. J. Mark. Res. 1981, 18, 382–388. [Google Scholar] [CrossRef]
- Joseph, F.; Hair, J.; Hult, G.T.M.; Ringle, C.; Sarstedt, M. A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM), 2nd ed.; SAGE Publications, Inc.: Thousand Oaks, CA, USA, 2017; p. 384. [Google Scholar]
- Armstrong, J.S. Illusions in regression analysis. Int. J. Forecast. 2012, 28, 689–694. [Google Scholar] [CrossRef]
- Shmueli, G.; Ray, S.; Velasquez Estrada, J.M.; Chatla, S.B. The elephant in the room: Predictive performance of PLS models. J. Bus. Res. 2016, 69, 4552–4564. [Google Scholar] [CrossRef]
- Woodside, A.G. Moving beyond multiple regression analysis to algorithms: Calling for adoption of a paradigm shift from symmetric to asymmetric thinking in data analysis and crafting theory. J. Bus. Res. 2013, 66, 463–472. [Google Scholar] [CrossRef]
- Cepeda Carrión, G.; Henseler, J.; Ringle, C.M.; Roldán, J.L. Prediction-oriented modeling in business research by means of PLS path modeling: Introduction to a JBR special section. J. Bus. Res. 2016, 69, 4545–4551. [Google Scholar] [CrossRef]
- Schloderer, M.P.; Sarstedt, M.; Ringle, C.M. The relevance of reputation in the nonprofit sector: The moderating effect of socio-demographic characteristics. Int. J. Nonprofit Volunt. Sect. Mark. 2014, 19, 110–126. [Google Scholar] [CrossRef]
- Ringle, C.M.; Sarstedt, M. Gain more insight from your PLS-SEM results: The importance-performance map analysis. Ind. Manag. Data Syst. 2016, 116, 1865–1886. [Google Scholar] [CrossRef]
- Helfat, C.E.; Martin, J.A. Dynamic managerial capabilities. J. Manag. 2015, 41, 1281–1312. [Google Scholar] [CrossRef]
- Lin, H.-F.; Su, J.-Q.; Higgins, A. How dynamic capabilities affect adoption of management innovations. J. Bus. Res. 2016, 69, 862–876. [Google Scholar] [CrossRef]
- Durst, S.; Wilhelm, S. Knowledge management and succession planning in SMEs. J. Knowl. Manag. 2012, 16, 637–649. [Google Scholar] [CrossRef]
Construct | Item No | Operational Definition | Sources |
---|---|---|---|
Managerial capability | |||
Management style | 6 | The management style of leaders/managers inside the business regarding their approach, needs, priorities, and communication with workers. | [43,44,45,77,78,79,90,91,92] |
Decision-making | 5 | How and why decisions are made inside the business, and which stakeholders are involved. | [41,93,94] |
People development | 8 | The business’s approach to developing its employees. | [46,95,96,97,98] |
Succession planning | 4 | The selection and training of new leaders; also, how the succession plan works in the business. | [47,99,100,101] |
Adaptive capability | |||
Horizon scanning | 5 | How the business comprehends what happens in the external business environment, and how this data is utilized. | [23,25,64] |
Change management | 4 | How the business acts/reacts to internal/external changes, and how it manages the process of change. | [102,103,104] |
Resilience | 5 | The business approach when things go wrong; also, how it survives and flourishes during crises. | [28,65,105,106,107] |
Organizational innovation | 10 | How the innovation process is developed and managed. | [43,61,108,109,110,111,112,113,114,115] |
Constructs | Code | Items | SL | α | CR | AVE |
---|---|---|---|---|---|---|
Managerial capability | ||||||
Decision-making | 0.72 | 0.82 | 0.54 | |||
DM1 | Leaders/managers delegate decision-making power to employees within their scope of responsibility. | 0.82 | ||||
DM2 | All of the concerned stakeholders are involved, consulted, and asked for their opinion/feedback during decision-making. | 0.74 | ||||
DM3 | All employees feel that their feedback/opinions are taken into consideration when decisions are made. | 0.74 | ||||
DM4 * | The management team becomes a bottleneck in decision-making. | 0.44 | ||||
DM5 | Decisions are made with the vision of the business in mind. | 0.63 | ||||
Management style | 0.70 | 0.81 | 0.52 | |||
MS1 | Leaders/managers encourage open communication and feedback among all employees. | 0.79 | ||||
MS2 * | All employees can talk to their managers about any aspect of the business without fear of consequences. | 0.49 | ||||
MS3 * | Leaders/managers give all employees the opportunity to try new ways of doing things for the benefit of the business. | 0.49 | ||||
MS4 | All employees are given responsibility/ownership for the delivery of key goals and objectives. | 0.73 | ||||
MS5 | All employees know how their role contributes to the success of the business. | 0.67 | ||||
MS6 | Leaders/managers regularly give praise to all employees for the work they have done. | 0.70 | ||||
People development | 0.83 | 0.87 | 0.50 | |||
PD1 | All employees have been adequately trained to do their job. | 0.71 | ||||
PD2 | All employees are assessed for training or development needs. | 0.69 | ||||
PD3 | All employees can suggest training or development opportunities for themselves. | 0.64 | ||||
PD4 | There is a budget for the training and development of all employees. | 0.61 | ||||
PD5 | Managers discuss career development with all employees. | 0.65 | ||||
PD6 | All employees are given the opportunity to become multi-skilled. | 0.69 | ||||
PD7 | All employees have regular staff appraisals (annual, biannual, etc.). | 0.67 | ||||
PD8 | There is a formal appraisal process for all staff. | 0.71 | ||||
Succession planning | 0.70 | 0.77 | 0.53 | |||
SP1 | The management knows where there may be skill gaps in the business in the next two to five years. | 0.67 | ||||
SP2 * | The management team assessed the risk to the business of losing key employees at all levels. | 0.34 | ||||
SP3 | The leader/manager has identified people in the business who can be developed into higher roles. | 0.82 | ||||
SP4 | The management team discussed how the risk of losing key employees at all levels could be minimized, or how to react if it occurs. | 0.69 | ||||
Adaptive capability | ||||||
Change management | 0.77 | 0.85 | 0.60 | |||
CM1 | Once made, all changes are sustained. | 0.83 | ||||
CM2 | There is continuous communication during change processes. | 0.77 | ||||
CM3 | The change(s) happen quickly and effectively. | 0.65 | ||||
CM4 | Following a change in the business, does the management team discuss how well it was executed? | 0.80 | ||||
Horizon scanning | 0.71 | 0.82 | 0.54 | |||
HS1 | The information is gathered in a structured and deliberate way. | 0.71 | ||||
HS2 * | The information is stored in a location where relevant employees have access to it. | 047 | ||||
HS3 | The information is communicated to the management team on a regular basis. | 0.72 | ||||
HS4 | Opportunities and threats are identified from the information. | 0.69 | ||||
HS5 | The management team knows the key trends and changes in the environment that could impact the business. | 0.80 | ||||
Resilience | 0.70 | 0.81 | 0.52 | |||
RE1 | The business has strong social connections. | 0.72 | ||||
RE2 | The business finds it easy to adapt to changing situations. | 0.74 | ||||
RE3 * | The management team is optimistic, even when things are difficult. | 0.49 | ||||
RE4 | The management team is usually calm in high-stress situations. | 0.69 | ||||
RE5 | The leader/manager feels confident in the abilities of employees to tackle problems. | 0.72 | ||||
Organizational innovation | 0.86 | 0.90 | 0.55 | |||
IN1 | Employees in the business are always looking for new ways of doing things. | 0.75 | ||||
IN2 | The business (management team) is open to making a change or implementing something new if an opportunity arises. | 0.76 | ||||
IN3 * | The business (management team) enter new markets/create niches in existing markets. | 0.44 | ||||
IN4 | The information from the external business environment (e.g., customers, new technology, social trends, etc.) is used to initiate new products, services, or improvements. | 0.76 | ||||
IN5 * | The business (management team) invests (above the industry average) in new technology, research, and development or new product development. | 0.46 | ||||
IN6 | Employees are rewarded for coming up with ideas. | 0.67 | ||||
IN7 * | The ideas are evaluated for their relevance/benefit to the business. | 0.43 | ||||
IN8 | When an idea is deemed useful, it is taken to the development stage on a priority basis. | 0.76 | ||||
IN9 | The one (employee) who suggested an idea(s) is also involved in the idea evaluation phase. | 0.75 | ||||
IN10 | The one (employee) who suggested an idea(s) is also involved in the idea development phase. | 0.74 |
Mean | SD | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | |
---|---|---|---|---|---|---|---|---|---|---|
Managerial capability | ||||||||||
1. Decision-making | 3.09 | 0.66 | 0.74 | 0.48 | 0.56 | 0.36 | 0.78 | 0.58 | 0.57 | 0.66 |
2. Management style | 3.12 | 0.79 | 0.35 ** | 0.72 | 0.73 | 0.27 | 0.46 | 0.56 | 0.52 | 0.43 |
3. People development | 2.96 | 0.59 | 0.43 ** | 0.56 ** | 0.67 | 0.23 | 0.45 | 0.60 | 0.62 | 0.48 |
4. Succession planning | 2.70 | 0.64 | 0.23 ** | 0.16 * | 0.15 * | 0.73 | 0.26 | 0.4 | 0.52 | 0.32 |
Adaptive capability | ||||||||||
5. Change management | 3.08 | 0.66 | 0.58 ** | 0.34 ** | 0.36 ** | 0.16 * | 0.77 | 0.46 | 0.60 | 0.64 |
6. Horizon scanning | 3.01 | 0.66 | 0.41 ** | 0.40 ** | 0.46 ** | 0.25 ** | 0.34 ** | 0.73 | 0.71 | 0.57 |
7. Resilience | 3.13 | 0.60 | 0.41 ** | 0.37 ** | 0.47 ** | 0.33 ** | 0.44 ** | 0.50 ** | 0.72 | 0.60 |
Organizational innovation | ||||||||||
8. Innovation | 3.11 | 0.67 | 0.53 ** | 0.34 ** | 0.41 ** | 0.22 ** | 0.53 ** | 0.45 ** | 0.47 ** | 0.74 |
Structural Path | Path Coefficient | Significant Difference (p < 0.05)? | 95% BCa Confidence Interval | Conclusion | |
---|---|---|---|---|---|
SRMR composite model = 0.07 | |||||
R2Horizon scanning = 0.31; R2Resilience = 0.38; R2Change management = 0.42; R2Innovation = 0.50; | Q2Horizon scanning = 0.15 Q2Resilience = 0.18 Q2Change management = 0.22 Q2Innovation = 0.20 | ||||
H1: Managerial capability → Adaptive capability | |||||
Management style → Change management | 0.10 n.s | No | (−0.04, 0.23) | H1a partially supported | |
Management style → Horizon scanning | 0.14 * | Yes | (0.01, 0.27) | ||
Management style → Resilience | 0.05 n.s | No | (−0.10, 0.18) | ||
Decision-making → Change management | 0.47 *** | Yes | (0.34, 0.59) | H1b supported | |
Decision-making → Horizon scanning | 0.22 *** | Yes | (0.10, 0.34) | ||
Decision-making → Resilience | 0.14 * | Yes | (0.00, 0.26) | ||
People development → Change management | 0.01 n.s | No | (−0.12, 0.15) | H1c partially supported | |
People development → Horizon scanning | 0.28 *** | Yes | (0.11, 0.43) | ||
People development → Resilience | 0.23 ** | Yes | (0.08, 0.38) | ||
Succession planning → Change management | −0.03 n.s | No | (−0.15, 0.08) | H1d partially supported | |
Succession planning → Horizon scanning | 0.12 * | Yes | (0.01, 0.22) | ||
Succession planning → Resilience | 0.19 *** | Yes | (0.06, 0.30) | ||
H2: Adaptive capability → Organizational innovation | |||||
Change management → Innovation | 0.27 *** | Yes | (0.13, 0.40) | H2a supported | |
Horizon scanning → Innovation | 0.14 ** | Yes | (0.01, 0.26) | H2b supported | |
Resilience → Innovation | 0.15 * | Yes | (−0.01, 0.31) | H2c supported | |
H3: Managerial capability → Organizational innovation | |||||
Management style → Innovation | 0.02 n.s | No | (−0.16, 0.20) | H3a not supported | |
Decision-making → Innovation | 0.19 ** | Yes | (0.05, 0.33) | H3b supported | |
People development → Innovation | 0.08 n.s | No | (−0.08, 0.27) | H3c not supported | |
Succession planning → Innovation | 0.03 n.s | No | (−0.11, 0.15) | H3d not supported |
Criterion: Organizational Innovation | Total Effect | Performance |
---|---|---|
Decision-making | 0.394 | 52.538 |
Management style | 0.068 | 53.567 |
People development | 0.212 | 50.117 |
Succession planning | 0.084 | 47.203 |
Change management | 0.276 | 52.935 |
Horizon scanning | 0.146 | 49.872 |
Resilience | 0.142 | 52.710 |
© 2017 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (http://creativecommons.org/licenses/by/4.0/).
Share and Cite
Ali, Z.; Sun, H.; Ali, M. The Impact of Managerial and Adaptive Capabilities to Stimulate Organizational Innovation in SMEs: A Complementary PLS–SEM Approach. Sustainability 2017, 9, 2157. https://doi.org/10.3390/su9122157
Ali Z, Sun H, Ali M. The Impact of Managerial and Adaptive Capabilities to Stimulate Organizational Innovation in SMEs: A Complementary PLS–SEM Approach. Sustainability. 2017; 9(12):2157. https://doi.org/10.3390/su9122157
Chicago/Turabian StyleAli, Zulfiqar, Hongyi Sun, and Murad Ali. 2017. "The Impact of Managerial and Adaptive Capabilities to Stimulate Organizational Innovation in SMEs: A Complementary PLS–SEM Approach" Sustainability 9, no. 12: 2157. https://doi.org/10.3390/su9122157