Influences of Organizational Factors on Organizational Capability for Innovation: An empirical Study from Vietnamese Firms

Abstract

Given the key role of organizational factors for improving firm’s innovation capability, the purpose of this study is to explore the level of influence of organizational factors namely transformational leadership (TL), human resource management (HRM) practice and collaborative culture on two aspects of organizational innovation capability namely product and process innovation. The paper has developed a proposal research model and applied Structural Equation Modeling (SEM) to test research hypotheses using data collected from 168 participants in 51 Vietnamese firms. The findings of this study confirm the significant impacts of key organizational factors on firm’s capabilities for product and process innovation. Especially, the empirical findings reveal that TL has a greater impact on process innovation. In contrast, collaborative culture has more significant influence on product innovation. The findings of this study have significantly contributed to increasing the insight of the link between key organizational factors and specific aspects of innovation capability. Moreover, it provides a specific and effective pathway for Vietnamese firms to pursuit and foster each specific aspect of organizational capability for innovation. Keywords: Transformational Leadership, HRM Practice, Collaborative Culture, Product Innovation, Process Innovation, Innovation Capability