Uncertain Environment and Organizational Performance: The Mediating Role of Organizational Innovation

Misbah Haque,Imran Ali

doi:10.5539/ass.v12n9p124

Abstract

Purpose: How to survive in dynamic and uncertain business environment?, is one of the biggest challenge for corporations today. To answer this question, current study examines the role of organizational innovation for improving performance in today’s competitive, dynamic and uncertain business environment.Design: The study used structured closed-ended survey questionnaire and data is collected through self-administered technique to increase the response rate. The unit of analysis is the employees working in cellular industry in Pakistan. The analysis techniques includes, validity analysis through confirmatory factor analysis (CFA) reliability analysis through Cronbach alpha, correlation analysis, hypotheses testing utilizing structure equation modeling (SEM) in AMOS software whereas, mediation through method of Baron and Kenny (1986).Findings: Results show that organizational innovation plays the mediating role between uncertain environment and organizational performance. Practical implications: The study proposes that organizational innovation is inevitable for maintaining organizational performance in uncertain business environment particularly in dynamic industries.Originality: The current study proposed and tested an important conceptual model that explains the mediating role of organizational innovation to enhance the organizational performance in uncertain business environment.

Highlights

The advent of globalization has posed serious challenges in form of hyper competition on multinational as well as domestic organizations
Achieved confirmatory factor analysis (CFA) model of current research is shown in the Figure 2 below: After the elimination of eight non confirmatory items the instrument proved validate on the basis of CFA model being shown in the Figure 2 Chi square (CMIN), Degree of Freedom (DF), CMIN/DF, Goodness of Fit Index (GFI), Comparative Fit Index (CFI), Normed Fit Index (NFI), Root Mean Square Error of Approximation (RMSEA) are constructs use to check the fitness of model
Organizational innovation positively influences the organizational performance is the 2nd hypothesis of current study which is proved through structure equation modeling (SEM) analysis

Summary

Introduction

The advent of globalization has posed serious challenges in form of hyper competition on multinational as well as domestic organizations. This intensity of competition, fast changing customer preferences, heavy competitors’ moves are continuously influencing the external environment and creating high uncertainty in it. Ancona, Okhuysen & Perlow (2001) state that in uncertain environment survival and sustainability of organizations lies in innovation. This innovation capacity moves the organization towards the goal of sustainable competitive advantage and becomes a milestone in attaining the target of higher performance in such a volatile environment. According to Calantone, Cavusgil & Zhao (2002) &

Methods

Results

Conclusion