7th Global Conference on Business & Economics ISBN : 978-0-9742114-9-7
ORGANISATIONAL ENABLERS OF TECHNOLOGICAL INNOVATION IN THE
PORTUGUESE FOOTWE
AR INDUSTRY: DO SUBUNITS’ DIFFERENCES MATTER?
Ana Abrunhosa* ampa@fe.uc.pt
Patrícia Moura e Sá* pmourasa@fe.uc.pt
*Faculty of Economics - University of Coimbra, Av. Dias da Silva, 165, 3004-512
COIMBRA, PORTUGAL
October 13-14, 2007
Rome, Italy
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7th Global Conference on Business & Economics ISBN : 978-0-9742114-9-7
ORGANISATIONAL ENABLERS OF TECHNOLOGICAL INNOVATION IN THE
PORTUGUESE FOOTWE
AR INDUSTRY: DO SUBUNITS’ DIFFERENCES MATTER?
(EXTENDED ABSTRACT)
It is widely accepted that the successful implementation of technological (process) innovation is largely dependent upon the adoption of certain management practices, regarded as key organisational enablers. However, previous research (e.g. Prajogo and
Sohal, 2006; Wilson et al.
, 1999; Wolfe , 1994) has not found a consistent pattern of influence and, contrary to what it would be expected, many hypothesised relationships have been found not to be statistically significant. The authors have recently investigated the role of some management principles, commonly associated with the “soft” elements of
TQM, in enhancing innovation adoption in the Portuguese footwear industry with mixed results (Sá and Abrunhosa, 2007). In fact, it was found that, while teamwork, supportive people management practices and communication significantly contribute to technological innovation adoption, some others, like autonomy and consultation, had not clear association with it. Some arguments might be advanced to explain this apparently confusing finding.
The main argument underlying the current study is that the effectiveness of the various management practices on technological innovation adoption is not universal, but rather depends on the organisational area in which they are applied. Therefore, in studying the role of key organisational enablers in driving technological innovation, we took into consideration two main areas: production and conception. This reasoning behind this choice is essentially linked to the differences in job design, responsibilities and professional cultures between these two areas.
In a field where organisational level studies dominate, by adopting a subunit level of analysis and concentrating into a single industry, our research is original and makes a significant contribution to the understanding of intra-organisational differences in explaining innovation performance.
In fact, organisational level studies have assumed implicitly that work and structural forms across participants and subunits are homogeneous (Fry, 1982). Yet, according to the different nature of the tasks (and therefore, qualifications), to the heterogeneity of the resources and to the degree of closeness to external (environmental) influences, different organisational forms may apply. Organisational scholars have long suggested the adoption of a contingencial view (Lawrence and Lorsch, 1967) when choosing between alternative organisational forms, but have seldom took that argument forward up to the subunit level of analysis. A review of the literature in the drivers of innovation shows an almost complete lack of attention to differences in the way the various subunits of a firm organise work and, consequently, to their diverse contribute to the innovation process.
The current study was carried out in the Portuguese footwear industry. It is an exportingoriented sector, specialised in leather footwear. Small and micro firms dominate, being mostly the result of familiar run businesses. Being a mature industry with a low/medium technological level, most innovations are incremental and result from the adoption of technology already in use in other countries/markets. In this sense, organisational change plays a critical role.
The decision of concentrating our study in a single country and industry, while putting some restrictions on the possibility of generalising some findings, ensures that the firms face the same kind of environmental pressures and reduces the impact of other variables
(besides managerial practices) that may influence their innovation performance.
The theoretical background of our research derives from the organizational studies
(especially those related to the organic and systemic paradigm) and from the innovation theories (in particular evolutionary theories)
For our purposes, innovation embraces the creation or application of new knowledge, or the recombination of existing knowledge, to generate value through the introduction of products, processes, markets or organisational forms new or substantially improved to the adopting firm.
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7th Global Conference on Business & Economics ISBN : 978-0-9742114-9-7
As extensively discussed in the literature, the structure is concerned with the arrangement of people, departments and other subsystems in the organisation and can be described in terms of key dimensions, namely formalisation, specialization, centralisation, integration and differentiation (Pugh et al.
, 1968, Pierce and Delbecq,
1977).
These dimensions were used to describe the way production and conception takes place in the Portuguese footwear firms.
Some important differences emerged. While production subunits still exhibit a set of characteristics that are close to a mechanistic model, conception has features that are much more typical of an organic model (i.e. increased flexibility, additional integration, and enhanced stimulus to creativity).
Keeping that observation in mind, and in line with the arguments that suggest that organic models facilitate innovation (Prajogo and Sohal, 2006; Burns and Stalker, 1961 , Sá and
Abrunhosa, 2007), the following hypotheses were derived:

H1: The degree of implementation of the various management practices (autonomy, communication, consultation, teamwork and supportive people management practices) is not the same for production and conception areas.

H2: The strength of the various management practices in driving technological innovation adoption is higher in conception than it is in production.
With the aim of testing these hypotheses, a face-to-face questionnaire was administered to the top managers of 20 Portuguese footwear firms, where simultaneously additional qualitative data was collected within the empirical work carried out (case-studies). One response per firm was thus obtained regarding the perceptions of managers concerning the degree at which each area – production and conception – is implementing the practices above-mentioned.
Since each practice corresponds to a latent variable (that cannot be directly measured), it was represented by a set of questions (measurement items). Establishing reliability and validity of those scales is essential to ensure that they actually measure the concepts they are supposed to represent (Sureshchandar et al ., 2001).
Using the common validation procedures (i.e. by computing the corresponding Cronbach alphas and analysing the inter- and intra-item correlations), it was possible to affirm that all the scales meet the reliability and validity criteria, Moreover, a principal component analysis was performed that revealed that the scales are uni-dimensional (a single factor was extracted) and that the items indeed load in the appropriate constructs.
It was then possible to go forward and use multiple regression analysis to estimate the coefficients linking the management practices to innovation adoption.
In this process, when measuring technological innovation, we have used the mean number of innovations adopted over time (MNI), as suggested by Subramanian and
Nilakanta (1996) and Damanpour and Gopalakrishnan (1998). Given their relative importance to the footwear industry some technological innovation items in particular were considered and managers were asked to report those that they have introduced.
The 1997-2004 period was considered appropriate to this analysis.
Regarding each management practice, a composite measure was used, based on the loadings of each item on the respective scale.
Results of the statistical tests indicate that the level of implementation of the majority of the practices differ between production and conception, Thus, H1 was partially supported.
On the other hand, the level of association between each management practice and innovation varies considerably for the different areas. Not only the beta-values in the estimated regression functions are higher for conception & development than for production, but also the R-squares are better in the first case. We have thus found evidence of the general validity of H2.
All in all, our findings suggest that indeed at the organisational level different structures do coexist. Due to those differences, the organisational enablers of innovation do not have the same impact organisational-wide. This confirms the idea that innovation is path dependent (context-specific). In fact, indications exist that there are no universal
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7th Global Conference on Business & Economics ISBN : 978-0-9742114-9-7 prescriptions: if a firm is to be more innovative, it has to adjust the practices to the particular conditions of its internal subunits.
Key references:

BURNS, T. & G.M. STALKER (1961), The Management of Innovation , London:
Tavistock.

DAMANPOUR, F.; S. GOPALAKRISHNAN (1998), “Theories of organizational structure and innovation adoption: the role of environmental change”, J. Eng. Technol.
Manage ., 15, pp. 1-24.

FRY, L. W. (1982) , “Technology-structure research: three critical issues”, Academy of
Management Journal, Vol. 25, No. 3, pp. 532-552.

HAIR, J.; ANDERSON, R.; TATHAM, R.; BLACK, W. (1998), Multivariate Data
Analysis, Fifth edition, Prentice Hall, UK.

Lawrence, P.R., Lorsch, J.W. (1967), Organization and Environment, Irwin,
Homewood, IL.

NUNNALLY, J. (1967), Psychometric Theory, McGraw-Hill.

Pierce,J. L., Delbecq, A.L.,(1977). Organizational structure, individual attitudes, and innovation. Academy of Management Review 2, 26 –37.
 PRAJOGO, D. & SOHAL, A. (2004), “The multidimensionality of TQM practices in determining quality and innovation performance: an empirical examination”,
Technovation, Vol.24, No.6, pp.443-453
 PRAJOGO, D. & SOHAL, A. (2006), “The relationship between organization strategy, total quality management (TQM), and organization performance: the mediating role of
TQM”, European Journal of Operational Research, No. 168, pp. 35-50.

Pugh, D. S., HICKSON, D. J., HININGS, C. R. and TURNER, C. R., Dimensions of organization structure. Administrative Science Quarterly, 1968, 13, 65-91.
 Sá, Patrícia & ABRUNHOSA, Ana (2007), “The role of TQM practices in technological innovation: the Portuguese footwear industry case”, Total Quality Management &
Business Excellence, Vol. 18, No. 1-2, pp. 57-66.

SUBRAMANIAN, A. & S. NILAKANTA (1996), “Organisational innovativeness: exploring the relationship between organizational determinants of innovation, types of innovations, and measures of organisational performance”, Omega, Int. J. Mgmt Sci ,
Vol. 24, Nº 6, pp. 631-647.
 SURESHCHANDAR, G. S.; RAJENDRAN, C.; ANANTHARAMAN, R. (2001), “A holistic model for total quality service”, International Journal of Service Industry
Management, Vol. 12, No. 4, pp. 378-412.

WILSON, A. L.; RAMAMU RTHY, K., NYSTROM, P. C. (1999), “A multi-attribute measure for innovation adoption: the context of imaging technology”, IEEE
Transactions on Engineering Management, Vol. 46, No.3, pp. 311-321.
 WOLFE, R. A. (1994), “Organizational innovation: review, critique and suggested research directions”, Journal of Management Studies, Vol. 31, No. 3, pp. 405-431.
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