USING ANALYTIC HIERARCHY PROCESS TO EVALUATE ORGANIZATIONAL                   INNOVATIVENESS IN HIGH-TECH INDUSTRY        ...
organizational innovation. This article introduces a new typology with a view to obtaining abetter understanding of organi...
TABLE 1          Factor Analysis and Reliability Test of Research Constructs(continue)                                    ...
FIGURE 1         Hierarchical Structure and Dimensions Being Studied【Target】 【System Dimensions】     【Main Dimensions】    ...
score calculation is as follows:                                      n                                                   ...
[1] Amabile, T. A Model of Creativity and Innovation in Organizations, in B.M. Staw & L.L.Cumming (ed.), Research in Organ...
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Evaluation of Organizational Innovationness

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Evaluation of Organizational Innovationness

  1. 1. USING ANALYTIC HIERARCHY PROCESS TO EVALUATE ORGANIZATIONAL INNOVATIVENESS IN HIGH-TECH INDUSTRY Ming-Ten Tsai Department of Business Administration and the Institute of International Business, National Cheng-Kung University No.1, University Rd., Tainan 701, Taiwan mingtien@mail.ncku.edu.tw 886-6-2757575ext53321 Shuang-Shii Chuang Department of Business Administration and the Institute of International Business, National Cheng-Kung University No.1, University Rd., Tainan 701, Taiwan 886-6-2757575ext53320 Wei-Ping Hsieh* Department of Business Administration and the Institute of International Business, National Cheng-Kung University Department of Hotel and Restaurant Management, Chia Nan University of Pharmacy & Science 15F.-18, No.539, Chin Ping Rd., Anping Distric, Tainan 708, Taiwan. apple887@ms49.hinet.net 886-6-2935696 ABSTRACTThis study aims at discussing the analytical typology of organizational innovation inhigh-tech industry, and using some methodology to construct organizational innovationmeasurement model. To do so, some methodology based on the in-depth interviews, focusgroup techniques, factor analysis, and analytic hierarchy process are applied. The results ofthe study show the “technical innovation” is more important than “administrative innovation”in high-tech industry.Keywords: High-tech Industry, Innovation, Organizational Innovation (OI), AnalyticHierarchy Process(AHP) INTRODUCTIONThe dimensions of organizational innovation are extremely complex. In order to formulate theinnovativeness of an organization, some scholars extended the dimensions of their studies totechnological capability measurement indicators, incorporated management capabilities andthe concept of learning organization[4][5][6][8][9][12][14]. They defined innovativeness asthe overall capability expressed by an individual or group, and the output and structure of anorganization during the process of knowledge renewal. The breadth of innovation includesequipment, systems, policies, processes, products and services. The depth of innovationincludes importance, degree of influence and effects on long-term profitability. It attempts topropose a typology and construct a multidimensional organizational innovation measurementmodel. By adopting a rigorous study methodology, the organization innovation measurementmodel was developed and used to establish the foundation of a more complete theory of -1231-
  2. 2. organizational innovation. This article introduces a new typology with a view to obtaining abetter understanding of organizational innovation in High-tech industry. A HIERARCHICAL MODEL FOR HIGH-TECH INDUSTRY ORGANIZATIONAL INNOVATION MEASUREMENT INDICATORSIn the past, organizational innovation was usually measured by perceived questionnaires.However, results from such an approach varied greatly because of the subjective perceptionof the questionnaire respondents. Besides, the weighted relative importance of differentdimensions was not considered. Thus, this paper attempts to develop an empirically-basedtypology of organizational innovation which would reflect the actual innovation dimensionsand their indicators.A brief description of selection criteria and hierarchical structure construction process is asfollows. First, initiative measurement indicators were selected through reviewing the relatedliterature. The foundation of the OI measurement indicators developed in the present study ismainly based on OI structure factors proposed by Daft [2], Kimberely and Evanisko [11],Amabile [1], Damanpour and Even [5], Damanpour [3][4], Schumann, Prestwood, Tong andVanston [13], Wolfe [17], Tang [14], Djellal and Gallouj [7], Van der Aa and Elfring, [16],Tidd [15], Hipp and Grupp [10]. Second, the preliminary measurement indicators wasmodified through a study of in-depth interviews with domain experts, together with focusgroup techniques (FGT) to compile the views and opinions on the measurement indicators forthe OI of high-tech industry.Third, the preliminary measurement indicators was first designed in the form of aquestionnaire and sent to middle to higher managers in the high-tech industry. A total of 700questionnaires were sent out, and 436 (62 per cent) valid returns were collected. Based on theresults of factors analysis, different dimensions were identified and named accordingly. Theresults of factor analyses are shown in Table 1. The hierarchy and naming of the finalmeasurement structure obtained after factor analysis is shown in Figure 1. A total of twosystem dimensions, seven major dimensions and fourteen secondary dimensions wereobtained. The construction of a hierarchical structure model was completed. TABLE 1 Factor Analysis and Reliability Test of Research Constructs Varlance Item to Main Factor Secondary Dimensions & indicators Loading Eigenvalue explained total α Dimensions (%) correlation Product Product innovativeness profitability 4.879 60.986 0.9191 Innovation 1.widely application of new product or new 0.836 0.7761 technology 2.widely commercialization of new product or new 0.835 0.8128 technology (3 years) 3.famous in product innovation 0.783 0.7343 4.product always lead the industry (3 years) 0.851 0.8199 5.awards for product innovation (3 years) 0.824 0.8151 Product innovativeness diversity 1.089 13.616 0.8026 6.master customer demand and market trend 0.752 0.5429 7.new idea for product 0.820 0.7396 8.diversification of product 0.843 0.6793 Process Degree of process innovativeness 2.793 69.825 0.8559 Innovation 1.new technology for improve process 0.840 0.7030 2.new method for improve process 0.876 0.7594 3.adjust production in a short time 0.791 0.6386 4.fast adjust for customer demand 0.833 0.6958 -1232-
  3. 3. TABLE 1 Factor Analysis and Reliability Test of Research Constructs(continue) Varlance Item to Main Factor Secondary Dimensions & indicators Loading Eigenvalue explained total α Dimensions (%) correlationCreative Work The support of supervisory 0.9077 47.773 0.9006Environment 1.culture for break through and innovation 0.738 0.6671 2.culture for different opinion 0.726 0.7214 3.support creative program 0.796 0.7684 4.incentive creative idea 0.810 0.7586 5.encourage new problem-solving method 0.798 0.7454 6.encourage creative program 0.725 0.7203 The support of work team 2.106 11.085 0.8506 7.“new concept” to solve “old problem” 0.716 0.6992 8.attention employee’s opinion 0.786 0.7171 9.emphasis brainstorming 0.878 0.7505 The support of work team 1.408 7.411 0.9122 10.express employee’s opinion 0.638 0.7327 11.team discuss and create new idea 0.666 0.7772 12.effective team discuss 0.811 0.7905 13.open communication climate 0.699 0.8029 14.respect other’s opinion 0.833 0.7194 15.imagine and freedom of speech 0.717 0.7184 Challenge of work 1.127 5.933 0.8794 16.accept challenges 0.796 0.7664 17.flexible thinking 0.791 0.8142 18.autonomy to decide how to implementation 0.739 0.7310 19.widely application new technology/method 0.693 0.6596Marketing Marketing process innovation 4.089 51.117 0.9063Innovation 1.famous innovative advertisement 0.843 0.7857 2.creative promotion activities 0.886 0.7833 3.marketing activity lead industry development 0.875 0.7670 4.innovative marketing activities 0.885 0.8281 5.awards for innovative advertisement 0.733 0.6754 Customer relationship orientation 2.010 25.119 0.8683 6.change service model base on customer demand 0.870 0.7304 7new and effective project on customer’s complaint 0.880 0.7585 8.emphasis on customer relationship management 0.887 0.7637Organizational The degree of organizational characteristic 4.861 69.439 0.9261Characteristic innovationInnovation 1.specialization 0.783 0.7063 2.empowerment 0.833 0.7690 3.participative working environment 0.839 0.7739 4.new technology knowledge 0.835 0.7673 5.administrative support 0.839 0.7757 6.external relationship 0.803 0.7309 7.open communication environment/channel 0.896 0.8465Organizational The degree of management system innovation 3.941 65.686 0.9069System 1.innovative selection system 0.844 0.8142Innovation 2.performance method 0.843 0.7873 3.compensation system 0.914 0.8456 4.welfare system 0.794 0.7278 The degree of organization system flexible 1.037 17.283 0.8990 5.adjust employee’s work 0.916 0.8186 6.professional division 0.914 0.8186Strategic Organizational change and slack resource 3.739 62.320 0.880Innovation 1.master market chance 0.838 0.7394 2.master customer and their demand 0.891 0.8305 3..master competitor’s strategy 0.838 0.7534 4.slack resource 0.787 0.7076 The degree of organization internationalize 1.143 19.050 0.9291 5.international channel capability 0.932 0.8678 6.international brand capability 0.937 0.8678 -1233-
  4. 4. FIGURE 1 Hierarchical Structure and Dimensions Being Studied【Target】 【System Dimensions】 【Main Dimensions】 【Secondary Dimensions】 Product innovativeness profitability Product Innovation Technical Product innovativeness diversity Innovation Process Innovation Degree of process innovativeness The support of supervisory Creative work The support of work team environment The support of work team OI Challenge of work Marketing process innovation Marketing innovation Customer relationship orientation Organizational characteristic The degree of organizational innovation characteristic innovation Administrative Innovation The degree of management system innovation Organizational system innovation The degree of organization system flexible Organizational change and slack Strategic innovation resource The degree of organization internationalize AHP APPROACH IN THIS STUDYCalculate Dimensions and Indicator Weights and RankingAccording to the ten experts who were consulted, Taiwan’s high-tech enterprise OI systemdimensions in the order of importance were TI (0.524) and then AI (0.476); the ranking ofmain dimensions was: product innovation (0.337), process innovation (0.187), strategicinnovation (0.160), organizational system innovation (0.086), organizational characteristicinnovation (0.081), creative work environment (0.076), and marketing innovation (0.073). AC.R. value of 0.02 was obtained, indicating that the consistency was acceptable. From theseresults, it can be concluded that the display of product innovation, process innovation andstrategic innovation are the most important dimensions in evaluating the organizationalinnovative capability of an enterprise.Establishing Mathematical Formula for Measuring the OI of High-tech IndustryFor establishing dimension and indicator weightings for the OI of Taiwan’s high-techindustry, the fifty-eight indicators were normalized to obtain a standardized value (Z).Afterindividual indicators were weighted and dimensions of different hierarchical layers wereobtained by AHP, the OI measurement model for Taiwan’s high-tech industry wasconstructed using a linear combination approach through the above mentioned simpleadditive weight (SAW) treatment. The detailed algorithm for establishing the model and -1234-
  5. 5. score calculation is as follows: n (1) A ijk = ∑W l =1 ijkl × Z ijklWhere Zijkl : the ijk th secondary dimension, with the standardized value of the l th indicator. Wijkl : the ijk th secondary dimension, with the relative weight of the l th indicator. Aijk : score of the ijk th secondary dimension. m (2) A ij = × ∑W k =1 ijk A ijkWhere Aijk : the ij th main dimension, with standard value of the k th secondary dimension. Wijk : the ij th main dimension, with the relative weight of the k th secondarydimension. Aij : score of the ij th main dimension. 2 (3) A = i × ∑W j =1 ij A ijWhere Aij : the i th main dimension, with standard value of the j th main dimension. Wij : the i th main dimension, with the relative weight of the j th main dimension. Ai : score of the i th system dimension. 2 E = ∑W × (4) i =1 i A iWhere Ai : the standard value of the i th system dimension. Wi : the relative weight of the i th system dimension. E : OI score of the high-tech industry in Taiwan. CONCLUSIONSTheoretical ImplicationAn OI evaluation model for high-tech industry in Taiwan has been established by using arigorous method. It is a challenging task and the model needs to be continuously modified.The method employed orientation towards organizational innovativeness. The studyemployed multiple viewpoints to define OI, and the definition was in agreement with manycontemporary researchers’ views with an attempt to incorporate TI and AI into the definitionof OI.Since the present model incorporates the views and opinions from numerous experts andliterature, it displays general agreement with past studies. The major theoretical contributionof the present study is its being supplemental to existing OI theories. The present studyproposes dimensions and indicators for evaluating high-tech industry OI. They not onlyexplain the context of OI, but also form a platform for studying OI measuring models andapplications. In practical terms, results from the present study should be useful guidelines andreference for corporations seeking to improve organization innovation capabilities.Practical ImplicationsThe above results showed that for an enterprise, the importance of TI appears to be greaterthan AI. However, it must be stressed that the activities of AI and TI can mutually enhancethe adaptability of an enterprise to environmental changes. Namely, they have synergisticeffects on the adaptability of an enterprise. Therefore, the present measurement model shouldbe helpful for an enterprise in understanding its current OI status, providing strategicrecommendations, and serving as guidelines when it aims at improving its OI activities andenhancing its competitiveness. -1235-
  6. 6. [1] Amabile, T. A Model of Creativity and Innovation in Organizations, in B.M. Staw & L.L.Cumming (ed.), Research in Organizational Behavior, 10, 123–167. Greenwich, CT: JAIPress, 1988.[2] Daft, R.L. A Dual-core Dodel of Organization Innovation. Academy of Management Journal, 1978, 21(2), 193-210.[3] Damanpour, F. & Evan, W.M. Organizational Innovation and Performance: The Problem of Organizational Lag. Administrative Science Quarterly, 1984, 29(3), 392-409.[4] Damanpour, F. & Evan, W.M. The Adoption of Innovation Overtime: Structural Characteristics and Performance of Organizations. Paper Presented at the Annual Meeting of the Decision Science Institute, San Diego, 1990.[5] Damanpour, F. Organizational Innovation: A Meta Analysis of Effects of Determinants and Moderators. Academy of Management Journal, 1991, 34(3), 555-590.[6] Damanpour, F. The Adoption of Technological, Administrative, and Ancillary Innovations: Impact of Organizational Factors. Journal of Management, 1987, 13(4), 675-688.[7] Djellal, F. & Gallouj, F. Innovation in Services, Patterns of Innovation Organization in Service Firms: Postal Survey Results and Theoretical Models. Science and Public Policy, 2001, 28(1), 57-67.[8] Downs, G.W. & Mohr, L.B. Conceptual Issues in the Study of Innovation. Administrative Science Quarterly, 1976, 21(4), 700-714.[9] Evan, W.M. & Black, G. Innovation in Business Organizations: Some Factors Associated with Success or Failure of Staff proposals. Journal of Business, 1967, 40(4), 519-530.[10] Hipp C. & Grupp, H. Innovation in the Service Sector: The Demand for Service-specific Innovation Measurement Concepts and Typologies. Research Policy, 2005, 34(4), 517-535.[11] Kimberly, J.R. & Evanisko, M.J. Organizational Innovation: The Influence of Individual, Organizational, and Contextual Factors on Hospital Adoption of Technological and Administrative Innovations. Academy of Management Journal, 1981, 24(4), 689-713.[12] Knight, K.E. A Descriptive Model of the Intra-firm Innovation Process. Journal of Business, 1967, 40(4), 478-496.[13] Schumann, P.A., Prestwood, D.C.L., Tong, A.H. & Vanston, J.H. Innovate! Straight Path to Quality, Customer Delight and Competitive Advantage. New York, NY: McGraw-Hill, 1994.[14] Tang, H.K. An Inventory of Organizational Innovativeness. Technovation, 1999, 19(1), 41-51.[15] Tidd, J. & Hull, F.M. Service Innovation, Organizational Responses to Technological Opportunities and Market Imperatives. London, Imperial College Press, 2003.[16] Van der Aa, Wietze and Elfring, Tom Realizing Innovation in Services. Scandinavian Journal of Management, 2002, 18(2), 155-171.[17] Wolfe, R.A. Organizational Innovation: Review, Critique and Suggested Research Directions. The Journal of Management Studies, 1994, 31(3), 405-431. -1236-

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