Proceedings of Annual Tokyo Business Research Conference
15 - 16 December 2014, Waseda University, Tokyo, japan, ISBN: 978-1-922069-67-2
Learning Organization Factors Affecting Innovation
Management in Thaisummit Automotive Co.,Ltd
Niphon Rummasint*, Chanin Srisuwannapa** and Nuttawut Rojniruttikul ***
The objectives of this study were (1) to study the level of innovation management in Thai
Summit Automotive Co., Ltd. and (2) to investigate the learning organization factors that
affect innovation management in Thai Summit Automotive Co., Ltd. Simple Random
Sampling was used to collect data from 154 employees in Thai Summit Automotive Co.,
Ltd. Data analysis was performed by using a statistical program. Statistics used in the
study included percentage, arithmetic mean, and standard deviation. Multiple linear
regression was used to test the hypothesis. The results of this study can be concluded as
follows: 1) The level of innovation management in Thai Summit Automotive Co., Ltd was
considered as high. 2) Empowerment and technology application could affect the
innovation management in the company at a statistically significance level of 0.01.
Field of research: Managing People and Organizational Research
Introduction
Automotive parts industry is one of the industries that has an impact on Thailand's
economy. The industry sector's contribution to the Thai economy represented 11% of the
Gross Domestic Product (GDP). In 2013, Thailand's automotive production ranked 9th
globally and was the leading in Southeast Asia. In terms of the export, the industry
accounted for 754,225.90 million baht and ranked 13th globally.
Automotive parts manufacturers in Thailand can be categorized into 1. Original Equipment
Manufacturer or OEM (i.e. car seat, wheel, door, tire, and metal) 2. Replacement
Equipment Manufacturer or REM 3. Body parts manufacturer, and 4. Bumper
manufacturer, which is associated with all automotive manufacturers stated. There were
approximately 2,400 automotive parts manufacturers in the country, about 1,850 of which
were Thai manufacturers and 550 were foreign parts and components manufacturer
groups. In 2013, the export of automotive parts was worth 754,225.90 million baht; about
512,186.40 million baht of those were motor vehicles, 28,353.85 million baht were
automotive engines, 19,715.26 million baht were automotive parts, and 2,636.44 million
baht were mould jig and fixture, 190,386.45 million baht were OEM parts, and 947.49
million baht were others (The Federation Of Thai Industries. 2013). As the world economy
becomes highly competitive, the manufacturers must seek to find their competitive
advantage. With dynamic change in economic, innovative creation is a method that can
lead organizations to success in the automotive business. Creative innovation does not
only include creating new products or services, but include operations in the organizations,
how to motivate employees, how to prepare a leader, and business management.
Although creative innovation seems easy to understand, it is challenging to many
organizations to push forward this concept and make it as organizational culture.
_____________________________________________________________
*Mr. Niphon Rummasint, Administration and Management College, King Mongkut‟s Institute of Technology
Ladkrabang, Thailand, E-mail: Pachaya.rum@hotmail.com
** Dr. Chanin Srisuwannapa, Faculty of Science, King Mongkut‟s Institute of Technology Ladkrabang,
Thailand,E-mail : Chanin_sri@yahoo.com
*** Assistant Professor Dr. Nuttawut Rojniruttikul, Administration and Management College, King Mongkut‟s
Institute of Technology Ladkrabang, Thailand, E-mail: krnuttaw@kmitl.ac.th
Proceedings of Annual Tokyo Business Research Conference
15 - 16 December 2014, Waseda University, Tokyo, japan, ISBN: 978-1-922069-67-2
When creating innovation, it is required to know and learn about dynamic environment that
may affect organizations. It is recommended that every organization should continuously
create innovation because it may affect organizational viability. In addition, creative
innovation can be seen as a center for organizational process and useful initiative.
Therefore, the innovation is important for the growth and viability of organizations in a
highly competitive economy. In addition, knowledge management and innovation are not
merely important to organizations but they are associated with each other. To initiate the
innovation in organizations successfully, the organizations need to promote their
employees to continuously gain knowledge, to be aware of innovations, and to allow
employees to participate in discussions.
It is important for organizations to focus on the innovation management systematically, so
it will effectively meet organizational requirements and build organizational capabilities
more securely. (Carmen, Maria de la Luz and Salustiano. 2006)
ThaiSummit Automotive Co., Ltd is a Thai leading automotive parts manufacturer that has
been in the business for thirty years. The company's main target customers includes
automotive parts manufacturers such as Isuzu, Toyota, Honda, and Nissan. The
company's philosophy is “Before We Build Parts, We Build People” which aims to support
employees to gain more knowledge. Therefore, this results in a learning organization
which helps the employees create new innovation that eventually leads to the company's
sustainability.
Additionally, this study aims to identify the learning organization factors affecting
innovation management by choosing ThaiSummit Automotive Co., Ltd as a case study.
This study could be applied to other organizations that have the same business practices.
Literature Review
An organization may require knowledge and better understanding in its employees in
order to be more advantageous in that industry sector and to perfectly serve customers'
needs. Innovation management is defined as creating and innovating processes used for
organizational management Ehigie & McAndrew. (2005).This concept also includes
brainstorming ideas, improving and launching existing products.
Garvin (1993: 80) describes it as „an organization skilled at creating, acquiring and
transferring knowledge, and at modifying its behaviour to reflect new knowledge and
insights‟. Whatever the definition, at its core is the creation of knowledge through the
collective experience of an organization‟s members, which can be used by the
organization towards the achievement of improved performance and thus competitive
advantage.
Learning organization, a new concept in contemporary management, involved other
aspects of knowledge for a better understanding of an organization's goals. Several
concepts that are incorporated into the learning organization include learning organization,
knowledge management, organizational infrastructure, leadership, group, communication,
and organizational culture. Peter M. Senge (1990), a pioneer in the learning organization,
identified five disciplines concerning the theory and practice of learning organization.
These are
Proceedings of Annual Tokyo Business Research Conference
15 - 16 December 2014, Waseda University, Tokyo, japan, ISBN: 978-1-922069-67-2
1.) system thinking: is the forces and interrelationships that shape the behavior of
systems. This discipline helps us to see how to change systems more effectively, and to
act more in tune with the natural processes of the natural and economic world.
2.) personal mastery: are the deeply ingrained assumptions that influence how we
understand the world and how we take action. For example, our mental model or image of
learning or work or patriotism impacts how we relate and act in situations where those
concepts are operating.
3.) mental models: are the deeply ingrained assumptions that influence how we
understand the world and how we take action. For example, our mental model or image of
learning or work or patriotism impacts how we relate and act in situations where those
concepts are operating.
4.) building shared vision: is what you and the other members want to create or
accomplish as part of the organization. A shared vision is not imposed by one or a few
people as an organizational mandate. Rather, it is derived from the members of the
organization, creating common interests and a sense of shared purpose for all
organizational activities.
5.) team learning: is a skill developed for group problem solving and learning that is a
necessary discipline an organization and its members must develop in order to build an
effective learning organization. A learning organization is an organization that encourages
and facilitates learning so that it can adapt and transform itself to achieve its goals in a
dynamic and competitive world.
However, in this study, the authors selected the concept that was more relevant to
business practices of Thaisummit Automotive Co.,Ltd . This concept was developed by
Marquardt (1996) and focuses on the learning organization as well. There are five
components in this concept:
(1) Learning dynamics comprises: The learning subsystem is composed of three
complementary dimensions:
1. Levels of learning (individual, group and organisational)
2. Types of learning (adaptive learning, anticipatory learning, deutero learning and
active learning)
3. Critical organisational learning skills (systems thinking, mental models, personal
mastery, team learning, shared vision, and dialogue) Learning, ultimately, is a social
phenomenon – our ability to learn and the quality and openness of our relationships
determine what we can know. Our mental models of the world and of ourselves grow out
of our relationships with others.
(2) Organization transformation explains: noncomplex organizational infrastructure and
step, flexibility, a concise organization structure, clear organization's goal and vision, and
a shared vision between an organization and its employees.
Proceedings of Annual Tokyo Business Research Conference
15 - 16 December 2014, Waseda University, Tokyo, japan, ISBN: 978-1-922069-67-2
(3) People empowerment explains: People are the pivotal part of learning organisations
because only people, in fact, learn. The people subsystem includes employees,
managers/leaders, customers, business partners, and the community itself. Each of these
groups is valuable to the learning organisation, and all need to empowered and enabled to
learn.
(4) Knowledge management explains: Knowledge has become more important for
organisations than financial resources, market position, technology, or any other company
asset. Individuals may come and go, but valuable knowledge cannot be lost or the
company starves to death. The knowledge subsystem refers to the management of
acquired and generated knowledge or the organisation. It includes the acquisition,
creation, storage, transfer, and utilisation of knowledge.
(5) Technology application explains: The technology subsystem is the supporting,
integrated technological networks and information tools that allow access to and exchange
of information and learning. It includes technical processes, systems, and structure for
collaboration, coaching, co-ordination, and other knowledge skills. The three major
components are information technology, technology-based learning, and electronic
performance support systems.
Top ten strategies to build learning subsystems:
1. Develop action learning programs throughout the organisation (time and effort!)
2. Increase individuals‟ ability to learn how to learn
3. Develop the discipline of dialogue in the organisation
4. Develop career development plans for employability
5. Establish self-development cash programs
6. Build team-learning skills
7. Encourage and practice systems thinking
8. Use scanning and scenario planning for anticipatory learning
9. Encourage/Expand diversity, multicultural and global mindsets and leanings
10. Change the mental model relative to learning (most people retain a negative picture of
learning, one acquired in their school days).
Technological advances, customer behavior changes, intensified competition and the
changing business environment are some of the factors that are creating the need for
innovations in the organizations Goffin & Mitchell (2010). According to Tidd, Bessant and
Pavitt (2008), innovation can be related to the organizations‟ ability to recognize the
market opportunities and establish commercial relationships that make them economically
viable. It is related to the development of new products, new processes or to the creation
of new ways to work on established and mature markets. However, one of the biggest
challenges organizations face is to test and manage the innovation process, considering
several circumstances (type of innovation, product or industry) that innovation
management process might differ.
Innovation might be analyzed through many dimensions. Authors like Nonaka and
Takeuchi (1995),Nonaka (1994), Cohen and Levinthal (1990), Van der Bij, Song and
Weggeman (2003), among others, discuss the importance of the generation and
management of knowledge cycles in order to create and sustain innovation.
Proceedings of Annual Tokyo Business Research Conference
15 - 16 December 2014, Waseda University, Tokyo, japan, ISBN: 978-1-922069-67-2
Ortt and Duin (2008). identified Innovation management takes place in an internal and
external environment. Strategy and organizational structure are important aspects of an
organization‟s internal environment, and they have an impact on innovation management
practices. Strategy, for example, determines whether an organization is an imitator,
follower or leader, which in turn determines how important innovation is to the company. In
addition, the structure of an organization, either functional or divisional, also determines
the way innovation practices are organized. In organizations with a divisional structure,
innovation processes may be divided among divisions, whereas a functional structure may
be associated with a more central organization (Chiesa, 2001). The external environment
of an organization, for example the proprietary regime in the country in which is located,
also affects the way innovation is organized (Teece, 1997). Although we acknowledge that
there may be more contextual factors, to illustrate the mechanisms of contextual
innovation we distinguish four different contextual factors of innovation processes, the
former two of which belong to the internal environment of an organization, while the latter
two belong to the external environment (Ortt, 1998; Kotler, 2002; McQuater et al., 1998).
(1) Type of innovation (e.g., incremental, radical, transformational).
(2) Type of organization (e.g., centralized, decentralized, functional, organic).
(3) Type of industry (e.g., high-tech, supplier-driven, fast moving consumer goods).
(4) Type of country/culture (e.g., egalitarian, authoritative).
The Methodology and Model
The population in this study were 250 employees who worked at Thai Summit Automotive
Co., Ltd. There are managerial employees, engineers, division managers, and
technicians. Data were collected by using the simple random sampling with a sample size
of 154 respondents.
In addition to the sample size, independent variable in this study was learning organization
factors that composed of: learning dynamics, organization transformation, people
empowerment, knowledge management, and technology application while the dependent
variable was innovation management, which emphasized on internal and external
innovation management at ThaiSummit Automotive Co., Ltd.
Hypothesis
Learning dynamics, organization transformation, people empowerment, knowledge
management, and technology application affected the innovation management at
ThaiSummit Automotive Co., Ltd.
Theoretical Model
The study aimed to investigate the learning organization factors that affect innovation
management at ThaiSummit Automotive Co., Ltd. According to Marquardt's concept
(1996), the learning organization consists of five components: learning dynamics,
organization transformation, people empowerment, knowledge management, and
technology application. Furthermore, Marquardt's learning organization concept has been
widely accepted and practiced at ThaiSummit Automotive Co., Ltd.
Proceedings of Annual Tokyo Business Research Conference
15 - 16 December 2014, Waseda University, Tokyo, japan, ISBN: 978-1-922069-67-2
In terms of theoretical model for innovation management, J.Roland Ortt and Patrick A. van
der Duin (2008). concept was applied to the study. Based on this concept, internal and
external environment were the main factors involved in innovation management. The
concept was associated with the innovation management of ThaiSummit Automotive Co.,
Ltd. as well.
In accordance with the learning organization factors and innovation management
concepts, the authors were able to develop the theoretical model as shown in figure 1.
Figure 1: Theoretical Model Used in the Study
Independent variable
Dependent variable
Learning organization
factors
learning dynamics
innovation management
organization transformation
people empowerment
knowledge management
technology application
The Findings
Table 1 Individual factors
Individual Factors
Number
1. Gender
Male
Female
Total
2. Age
Under or to 25 years
Over 25 years – 30 years
Over 30 years – 35 years
Over 35 years – 40 years
Over 40 years – 45 years
Over 45 years
Total
Percentage
130
24
154
84.4
15.6
100.0
11
33
52
29
21
8
7.1
21.4
33.8
18.8
13.6
5.2
154
100.0
Proceedings of Annual Tokyo Business Research Conference
15 - 16 December 2014, Waseda University, Tokyo, japan, ISBN: 978-1-922069-67-2
3. Education
Secondary or Lower
High school / Vocational school
Diploma / High Vocational scool
Bachelor Degree
Master degree or Higher
1
8
49
86
10
Total
154
0.6
5.2
31.8
55.8
6.5
100.0
4. Position
Technician
Section chief
Engineer
Manager
51
18
78
7
33.1
11.7
50.6
4.5
Total
5. The Experience
Under or to 5 years
Over 5 years – 10 year
Over 10 year – 15 year
Over 15 year
154
100.0
42
46
41
25
27.5
29.9
26.6
16.2
Total
154
100.0
6. Departments
Quality Assurance
Engineering
Planning
Assemby
Press
Others
18
74
16
13
13
20
11.7
48.1
10.4
8.4
8.4
13.0
Total
154
100.0
According to Table 1, it shows that a majority of the subjects were male between the
ages of over 30 years – 35 years. Also, the majority of the subjects had a bachelor
degree, position is engineer in engineering departments and work experience over 5
years – 10 year.
Table 2 Mean ( X ), Standard deviation (S.D.), level and rank of Learning
Organization
Organization Learning
X
S.D.
Level
Rank
1. Learning Dynamics
3.797
0.640
High
1
2. Organization Transformation
3.650
0.709
High
3
3. People Empowerment
4. Knowledge Management
3.613
0.696
High
4
3.493
0.806
High
5
5. Technology Application
3.672
0.787
High
2
Overall
3.774
0.687
High
According to Table 2, it shows that the company has high level of learning
organization when considered each dimension learning dynamic was first raking
dimension, followed by technology application organization transformation knowledge
management and people empowerment respectively.
Proceedings of Annual Tokyo Business Research Conference
15 - 16 December 2014, Waseda University, Tokyo, japan, ISBN: 978-1-922069-67-2
Table 3 Mean ( X ), Standard deviation (S.D.), level and rank of Innovation
Management.
Innovation Management
S.D.
Level
Rank
X
1.Internal innovation management
3.674
0.745
High
2
2.External innovation management
3.875
0.680
High
1
Overall
3.645
0.651
High
According to Table 3, it shows that the level of innovation management was high in
both innovation management within an organization ranked first and innovation
management without an organization ranked second
Table 4 Test of hypothesis by using the Multiple Linear regression
Factors
bj
t
p-value
Constant
0.518
2.909
0.004**
Learning Dynamics
0.066
0.793
0.429
Organization Transformation
0.126
1.659
0.099
0.297
3.947
0.000**
0.099
0.307
1.394
5.036
0.166
0.000**
People Empowerment
Knowledge Management
Technology Application
R = 0.866 ; R2 = 0.749 ; SEE = 0.349 ; F = 88.539 ; p-value = 0.000**
Remark **with statistical significance at the level of 0.01
As can be seen in table 4, the result of the multiple linear regression suggested that
people empowerment and technology application cause to innovation management with
statistical significance at the level of 0.01.All of learning organization factors could explain
variation in innovation management with 74.90 %
Conclusions
Learning organization has a high impact on the overall innovation management of Thai
Summit Automotive Co., Ltd. Learning organization were composed of 5 dimensions –
learning dynamics, changing organization, people empowerment, knowledge
management, and technology application.(Marquart,1996)
Technology application could affect the innovation management of Thai Summit
Automotive Co., Ltd. at 0.01 statistical significance. The organization using the information
technology that is properly designed to collect data and transmit knowledge via intranet
could encourages the employee to learn efficiently and easily access data in the
organization. It also leads to innovation creation which relating to Thomas G. Cumming &
Christopher G. Worley (2005) who found that the information technology is one factor to
change the organization and transmit knowledge for sustainable organization
development.
People empowerment have an influence on the innovation management of Thai Summit
Automotive Co., Ltd. at 0.01 statistical significance. The organization provides the
employee empowerment and responsibility to solve problems in order to meet customer
needs rapidly. It stimulates learning and innovation within the organization that relevant to
Proceedings of Annual Tokyo Business Research Conference
15 - 16 December 2014, Waseda University, Tokyo, japan, ISBN: 978-1-922069-67-2
the research of Mahmood Ghorbani and Shahnaz Ahmadi (2011) They said that
competency development for the personnel is one of the basic strategies of higher
adaptation, work proficiency, and survival in the organization nowadays. Structure is
necessary in proceeding, competency development, participation of the personnel in
processes, self-determining, and benefits utilization to achieve the organization‟s goal.
Learning dynamics do not impact on the innovation management of Thai Summit
Automotive Co., Ltd. As the innovation management is related to what customer required
on the product design. Therefore , Learning dynamics plays no role on the management
of innovation It is not relate with Ziegier(1995). said found the process of awakening for
achieving the shared experience of the organization to become a learning organization. In
the during of the process of awakening will contribute to shared vision together,
empowerment, systems thinking, and learning of organization. The member of
organization will begin to learn and accept the truth that the organization have to begin to
learn in the learning process. Including the use of the change cause the member to have
the knowledge, understanding, psychological adjustment and learning to take the action.
Organization Transformation do not impact on the innovation management in Thai Summit
Automotive Co., Ltd. Because the organization transformation requires long time as the
employee change, therefore their responsibility to work differently. It has no influence on
the innovation management. It is not relate with Gopalakrishnan, S. and Damanpour, F.
(1997), Cooper (1998). They said The development of organization is became an
innovation organization by using the innovation management about invention and
procedure changing. Including the management process of the new organization that
cause the working system, production, product design and the efficient of organization‟s
service are increasing. The innovation management characteristic is directly related with
policy, structure of organization, system, procedure and management process in
organization.
Knowledge management do not have an effect on the innovation management in Thai
Summit Automotive Co., Ltd. because the organization has low level external data
collection , therefore the employees to access the external data for their a decision
making. Therefore, it has no influence on the innovation management; not relate with
JU, Li and Lee (2006) said developed a strategic contingency model to identify
interrelationships among knowledge characteristics, knowledge management strategy,
knowledge integration, organizational learning, knowledge management capability and
innovation. They explored that knowledge characteristics with higher modularity and
explosiveness could enhance organizational learning and knowledge integration.
Furthermore, they found that levels of organizational learning, knowledge integration and
knowledge management capability have significant impact on firm‟s innovation.
Recommended
1. The company should improve the training process that focus to enhance skill,
acknowledge, and capability of employees. Therefore they can develop thinking
method follow scientific procedure. The training should raise employees to pass on
knowledge to their colleagues so that more empolyees can handle specific tasks
and faster reponse to customers. In the other hands, the training can motivate
employees in all levels to corporate in making competitive advantage for the
company.
Proceedings of Annual Tokyo Business Research Conference
15 - 16 December 2014, Waseda University, Tokyo, japan, ISBN: 978-1-922069-67-2
2. The company should study to magnify an outcome of learning organization that
effect to innovation management in other businesses such as medical and health
service or electronics equipment production. From the magnified study, the
company can compare the differences and then apply the result in each business
type to make more benifit. Additionly, the company should study on problems and
obstacles of applying learning organization method in the company. The study
result can lead to modification and re-organization business strategies of the
company to perform more efficiency.
Reference
Ana P. Lopes and Kumiko O. Kissimoto and Mário S. Salerno and Fernando J. B.
Laurind and Marly C. Carvalho 2012, Innovation management: a literature review about
the evolution and the different innovation models ,Internationnal Conference on Industrial
Engineering and Operations Management,Vol.1 , No. 1 , pp.324.1-324.8
Ehigie, B.O., & McAndrew, E.B. (2005). Innovation, diffusion and adoption of total
quality management (TQM). Management Decision, 43(6), 925-940.
Camelo-Ordaz Carmen, Fernández-Alles María de la Luz, Martínez-Fierro
Salustiano (2006). Influence of Top Management Team Vision and Work Team
Characteristics on Innovation: The Spanish Case. European Journal of Innovation
Management, 9(2), 179-201.
Chiesa, V. (2001), R&D Strategy and Organisation: Managing Technical Change in
Dynamic Contexts, Imperial College Press, London
Cohen, W. M., & Levinthal, D. A. (1990). A new perspective on learning and
innovation. Administrative Science Quarterly, 35(1), 128-152.
Cooper, R.J. (1998)."A multidimensional approach to the adoption of innovation",
Management Decision. 8, 493-502.
Garvin, David A. "Building a Learning Organization." Harvard Business Review 71,
no. 4 (July–August 1993): 78–91.
Goffin, K., & Mitchell, R. (2010). Innovation Management (2nd ed.): Palgrave
Macmillan.
Gopalakrishnan, S. and Damanpour, F. (1997). A Review of Innovation Research in
Economics, Sociology and Technology Management. Omega. Vol. 25. Nº 1. pp. 15-28.
Ju, T.L., Li, C.Y. and Lee, T.S. (2006), “A Contingency Model for Knowledge
Management Capability and Innovation”, Industrial Management and Data System Vol.106
No.6, pp.855-877.
Kotler, P. (2002), Marketing Management. Analysis, Planning, Implementation, and
Control, 11th ed., Prentice-Hall, Englewood Cliffs, NJ.
Marquardt, M. J. (1996). Building the learning organization: a systems approach to
quantum improvement and global success. New York: McGraw-Hill.
McQuater, R.E., Peters, A.J., Dale, B.G., Spring, M., Rogerson, J.H. and Rooney,
E.M. (1998), “The management and organisational context of new product development:
diagnosis and self-assessment”, International Journal of Production Economics, Vol. 55
No. 2, pp. 121-31.
Nonaka, I., & Takeuchi, H. (1995). The knowledge-creating company: How
Japanese companies create the dynamics of innovation. New York: Oxford University
Press.
Proceedings of Annual Tokyo Business Research Conference
15 - 16 December 2014, Waseda University, Tokyo, japan, ISBN: 978-1-922069-67-2
Ortt, J., &Duin, P. (2008). The Evolution of innovation management towards
contextual innovation. European Journal of Innovation Management, 11(4), 522-532.
Senge, P. (1990) “The Fifth Discipline: The art & practice of the learning
organization,” London: Century Business.
Thomas G. Cummings, Christopher G. Worley (2005). Thomson/South-Western,
Business & Economics - 694 pages.
Tidd, J., Bessant, J., & Pavitt, K. (2008). Gestão da Inovação (3a. ed.): Bookman.
Gopalakrishnan, S. et. al. 1999. A Reexamination of Product and Process
Innovations Using a Knowledge- Based View.” The Journal of High Technology
Management Research. Vol. 10, no. 1.pp. 147 – 166.
Ortt, J.R. (1998), “Videotelephony in the consumer market”, doctoral dissertation,
Delft University of Technology, Delft.
Van der Bij, H., Song, M., & Weggeman, M. (2003). An empirical investigation into
the antecedents of knowledge dissemination at the strategic business unit level. Journal of
Product Innovation Management, 20(2), 163-179.
Ziegler, M. F. (1995). The learning organization : Awakening (small businesses
organizational change). New York: McGraw-Hill.