Organizational Learning and Innovation: Organizational Learning

Organizational Learning and Innovation: Organizational Learning

Fakhraddin Maroofi (University of Kurdistan, Iran) and Fatemeh Kahrarian (Islamic Azad University, Iran)
DOI: 10.4018/978-1-4666-8798-1.ch007
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Abstract

In this paper, the focus is on an organization's ability to systematically generate value innovation initiatives. Especially in the context of fundamental new strategic moves, researchers have begun to stress the importance of deliberate mechanisms for learning. Building further on this theme, this paper focuses on the relationship between learning mechanisms that an organization establishes deliberately and its value innovation ability. Prevailing studies have demonstrated the importance of learning from an organization's innovation outcome. Although marketing scholars have emphasized both the consequence of internal learning mechanisms and of external learning through supply chain partners research findings on how these factors affect each other are merely lacking. We used a variance-based structural equations modeling technique (SEM) for the analyses, namely PLS-Graph 3.0. Analyzing survey data of 91 industrial firms, we examine how information supplied by upstream and downstream supply chain parties simplifies the effect of internal deliberate learning mechanisms on value innovation capability. PLS analysis of survey data suggests that value innovation capacity is strengthened when managers deliberately install specific learning mechanisms on the ability to receive. The results also suggest that internal learning mechanisms and external information exchange do not always work in a symbiotic manner. Results complement existing research by indicating the importance of deliberate action when attempting to break through existing industry practices.
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Introduction

This chapter, the focus is on an organization's capability in a systematic fashion creating value innovation ambition. Specifically, in the background of new strategic moves, researchers have begun to emphasize the consequence of deliberate mechanisms, for learning, (Zollo, 2009; Zollo & Singh, 2004). Building further on this subject, this paper focuses on the relationship between learning mechanisms that an organization carefully considered and its value innovation capability. Specifically, the authors focus on deliberate learning mechanisms that firms carefully considered to motivate the different dimensions of ability to receive (Lane, Koka, & Pathak, 2006). Besides the value of such internal mechanisms, the impact of external ties on ability to receive has been identified (Tiwana, 2008). Hereby concentration focuses on inter-firm co-operation and information transfer within supply chains. Then, both internal and external factors are believed to motivate innovation, and these factors are not necessarily mutually incompatible (Su, Tsang, & Peng, 2009). One of the explanations is that inter firm relationships also affect innovation capability indirectly, through their impact on internal organizational information adapting (Daghfous, 2004). Therefore, study whether and how the efficiency of deliberate managerial attempt for the ability to receive is resolved by supply chain relations. The following questions illustrate author’s research focus. How related is customer/supplier information in a background of value innovation? Does this information, act as a replace for deliberately motivating internal learning? Or, do powerful relationships with suppliers and/or customers reinforce deliberate managerial attempt in this field? In other words, is there a symbiotic relationship between an inside-out access ‎and an outside-in access? Then, authors, study how external (inter-firm) directions simplify the relationship between the internal learning mechanisms that an organization carefully considered and its value innovation capability. Author claims this research is related as it directly to several gaps in the literature. First, even though the relation between internal and external learning has been studied before in the management literature (Caloghirou, Kastelli, Tsalanikas, 2004) and in the B2B marketing literature (Li, Huang, & Tsai, 2009), these studies have taken a technological R&D perspective. The same argument applies to studies on the interrelations between external linkages and absorptive capacity (Lane & Lubatkin, 1998; Tsai, 2009). Notwithstanding interesting results on the interplay of supply chain collaboration and absorptive capacity, the latter has traditionally been operationalized from an R&D perspective, despite fierce critiques on narrowing the concept down to an all-too-easy-to-measure R&D focus (Lane et al., 2006; Lichtenthaler, 2009). Organizational processes for information processing and knowledge management (Easterby-Smith and Prieto, 2007; Szulanski, 1996) have been studied in a substantial body of work, both in the dynamic (Eisenhardt and Martin, 2000) and knowledge-based view of the firm (Grant, 1996). Especially, researchers in the fields of innovation and strategic marketing have illuminated the competitive value of an organization’s outside-in information processing capabilities (Arbussa and Coenders, 2007; Baker and Sinkula, 2007; Day, 2002). Not surprisingly, absorptive capacity (Cohen and Levinthal, 1990) has grown into an intensively studied concept (Camison and Fores, 2010; Todorova and Durisin, 2007), linking internal organization processes to innovative outcomes. Notwithstanding its contributions, research on absorptive capacity has so far remained predominantly confined to the innovations of a technological kind (Lane, Koka, Pathak 2006; Rothaermel and Alexandre, 2009) and several research gaps remain (Rothaermel and Alexandre, 2009). Building on a literature review and field data, we re-interpret absorptive capacity through a cognition lens and argue that deliberate learning mechanisms can affect specific practices for recognition, assimilation and exploitation of new ways to create customer value. These ideas are empirically tested on a sample of Kurdistan province industrial firms. Second, many studies on internal–external learning interactions in the innovation literature have followed a stock perspective (Dierickx & Cool, 1989), where stocks of resources are being studied instead of mechanisms installed to manage resources. This study focus on the underlying learning mechanisms – or “rise” – is theoretically better in line with a more dynamic resource-based view (Agarwal & Selen, 2009; Eisenhardt & Martin, 2000). As such, this study exceeds the conceptual lens that studies on dynamic capabilities have so far followed (Lichtenthaler, 2009) and could shed further light on the micro substructure and specifics of dynamic capabilities (Ethiraj, Kale, Krishnan, 2005). Third, exposing the interrelationships between deliberate internal learning and unplanned learning from suppliers and customers through the three abilities to receive processes of recognition, assimilation and exploitation, this study is not limited to bridging internal and external learning. This chapter first attempt to integrate two research fellows that have developed independently from each other: deliberate learning against unplanned, quasi-automatic learning from others (Barkema & Schijven, 2008). This integration could lead to major contributions by progress into the management of innovation processes and of supply chain relations. One could think of trade-offs or, on the contrary, synergistic effects between both kinds of learning stimuli. Finally, our research sheds light on the moderating effects of information provision by customers versus suppliers. Differentiating between customers and suppliers, we add to the research on the effect that different partners may have about specific types of innovation

Key Terms in this Chapter

Supply Chain: The network created amongst different companies producing, handling and/or distributing a specific product. Specifically, the supply chain encompasses the steps it takes to get a good or service from the supplier to the customer. Supply chain management is a crucial process for many companies, and many companies strive to have the most optimized supply chain because it usually translates to lower costs for the company. Quite often, many people confuse the term logistics with supply chain. In general, logistics refers to the distribution process within the company whereas the supply chain includes multiple companies such as suppliers, manufacturers, and the retailers.

Invention: The process of translating an idea or invention into a good or service that creates value or for which customers will pay. To be called an innovation, an idea must be replicable at an economical cost and must satisfy a specific need. Innovation involves deliberate application of information, imagination and initiative in deriving greater or different values from resources, and includes all processes by which new ideas are generated and converted into useful products. In business, innovation often results when ideas are applied by the company in order to further satisfy the needs and expectations of the customers. In a social context, innovation helps create new methods for alliance creation, joint venturing, flexible work hours, and creation of buyers' purchasing power.

Small and Midsize Enterprises (SMEs): A business that maintains revenues or a number of employees below a certain standard. Every country has its own definition of what is considered a small and medium-sized enterprise.

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