Organizational Structure and Technological Innovation: An Empirical Study in Chinese Automobile Industry

Abstract

In a competitive global market with rapidly changing markets and particular customers, technological innovation (TI) is a major requirement for business success. Little empirical study has examined the relationship between organizational structure (OS) and TI performance. Based on the literature of TI and OS, this study explores the effects of OS variables upon TI success in Chinese automobile firms. This study considers five dimensions of OS, such as, hierarchical layers, locus of decision-making, the degree of formalization, internal boundary and external boundary with customers and suppliers. A research framework is built to examine relationships among the five aspects of OS and TI performance in Chinese automobile industry, and a contingency approach is taken by examining the moderating effects of firm size. Multiple regression results show that the layers, formalization, internal and external boundary dimensions have significant influences on TI performance; whereas locus of decision-making hasn't significant influence on TI performance. Subgroup analysis reveals that these main effects, but hierarchical layers by way of an exception, are moderated by firm size.