Factors Affecting Innovation in Jordanian Public Firms

Abstract

This research examines the effects of leadership (LP), strategic planning (SP), organization culture (OC), human resources (HR), partnership (PS), availability of resources (RC), and systems, structures and processes (SSP) on public firms' innovation in Jordan. Moreover, it aims at identifying the key barriers hinder implementing innovative systems. One hundred ninety two are collected from 67 public organizations. A conceptual model is proposed and then analyzed using Structural Equation Modeling (SEM). SEM results showed that: (1) LP significantly affects HR, PS, and SSP. However, it insignificantly affects on RC, (2) SP is positively related with HR, PS, RC, and SSP, (3) OC significantly affect HR, PS, RC, and SSP, (4) HR, PS, RC, and SSP positively affect innovation, and finally (5) innovation has direct positive effects on customer satisfaction, process performance, and financial performance; whereas it has insignificant effect on employee satisfaction. Further, it is found that organizations' culture has the highest impact on successful innovation implementation. Moreover, the risk of failure and resistance to change, rigid hierarchy, lack of resources, and limited budget moderately affect innovation adoption. The results of this research provide valuable information to policy makers regarding the key factors affecting innovation and main barriers that hinders successful implementation.