A firm’s organizational innovation and organizational learning abilities

Abstract

Many recent studies are dedicated to the problem of innovation as a mean of improving a firm’s overall performance. Various kinds of innovation in a firm usually are closely interrelated with each other. While the majority of studies focus on technological - product and process - innovation, the investigation of non-technological - marketing and organizational - innovation (ORI), has increasingly attracted the interest of researchers during the last decade. Organizational culture and organizational learning are important drivers of such innovation. For instance, a collaborative culture, trust and open-mindedness encourage new initiatives and ideas, while learning helps not just to improve skillsets and abilities of individual employees, but can also greatly contribute to strategic knowledge management and building a resilient, innovative organization. This study examines the relationship between a firm’s organizational learning ability and its organizational innovation performance. The authors consider such factors as Learning Intention – seeing learning as a key investment and organizational commitment to it, and Openness - open-mindedness and organizational culture open to new ideas and worldviews. This study contributes to the theory of ORI by finding the answer to the question what impact these factors could have on ORI development in a firm. The findings are based on a quantitative analysis of more than 150 small and medium-sized enterprises surveyed in Russia and Latvia. The survey questions measuring ORI performance were developed in line with the widely used definition introduced in the OECD - Eurostat Oslo Manual. The scales for organizational learning were adopted from the previous studies elaborated this area of a firm activity. The survey compared a firm’s innovation performance to that of its closest competitors. This research demonstrates that some of the elements of organizational learning positively influence ORI activity. The results also suggest that Latvian companies differ from Russian ones in terms of their organizational learning intention.