Abstract
This empirical study attempts to investigate the effect of organizational learning on innovation as well as theimpact of innovation on company performance. Based on the literature review, two hypotheses are proposed toguide the study: the positive impact of organizational learning on innovation and the positive relationshipbetween innovation and performance. Data was collected via electronic survey from 320 small and mediumenterprises operating in the ICT industry in Malaysia. Findings from the study support both the two hypothesesthus providing further evidence that organizational learning contributes to innovation capability, and thatinnovation is positively related to firm performance. Several guidelines and practical implications from the studyare also discussed.
Highlights
Organizations are in a continuous process of searching for strategies that would provide them with a competitive advantage
Findings from the study support both the two hypotheses providing further evidence that organizational learning contributes to innovation capability, and that innovation is positively related to firm performance
Multiple stepwise regression analysis will be performed to establish the predictive power of organizational learning on innovation, and the predictive power of innovation on performance
Summary
Organizations are in a continuous process of searching for strategies that would provide them with a competitive advantage. Recent changes in the business environment have compelled firms to search for new strategies for competitive edge as the conventional strategies have become obsolete (Chirico & Salvato, 2008). In order to cope with the current external opportunities and threats, it is argued that organizations have to learn, that is, acquire new knowledge and skills that will improve their existing and future performance (Child, Faulkner, & Tallman, 2005; DiBella, 1998; Ortenblad, 2001). Many other researchers suggest that the effective strategy for sustaining and improving a firm’s competitive edge and performance is organizational learning Many other researchers suggest that the effective strategy for sustaining and improving a firm’s competitive edge and performance is organizational learning (e.g. Mavondo, Chimhanzi, & Stewart, 2005; Senge, 1990; Sinkula, Baker, & Noordewier, 1997)
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