Innovation implementations in Malaysian firms - Science Direct

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1 G. Zaltman, R. Duncan and J. Holbek. Innovations and Organizations. John Wiley ... Addison-Wesley, Read- ing, MA, 1980. 30 R. Schultz and D.P. Slevin.
Technovation, 15(6) (1995) 375-385

Innovation implementations in Malaysian firms: process, problems, critical success factors and working climate M. Zain Mohamed Department of Management & Marketing, Faculty of Economics & Management, Universiti Pertanian Malaysia, 43400 UPM, Serdang, Selangor, Malaysia Abstract This paper reports on the results of a field study on the implementation of innovations by eight firms manufacturing in Malaysia. The study investigated the innovation process followed by the firms, the problems faced by them, the factors perceived to be favourable to the success of innovation implementation, and the working climates of the firms. The results from the study indicate that the innovation process followed by the firms and the factors favourable to innovation implementation were similar to those found in the literature (mainly Western). However, not all of the factors cited are applicable to all the firms and industry sectors, which indicates the contingent nature of the innovation. There were also differences in the types of problem faced by the firms when implementing their innovations. Generally, the more innovationactive firms (those which introduced and implemented more incremental innovations, continuous improvements and technological innovations, those which interacted more with their environments, and those which organized more training programrnes or campaigns aimed at encouraging the employees to be creative and innovative) were found to have encountered less behavioural problems when implementing their innovations. The more innovation-active firms were therefore more successful in their implementation efforts than the less innovation-active ones. Finally, the results also show that in order for firms to be successful at implementing innovations they need to provide a favourable working climate for their workers.

1.

Introduction

There have been many and varied definitions of innovation found in the literature. One of the most commonly cited definitions is that given by Zaltman et al. [1] which says that an innovation is "an idea, practice, or material artifact perceived

Technovation Vol. 15 No. 6

to be new by the relevant adoption unit". A similar definition to this has been adopted by other researchers [2-4]. The term innovation has also been associated with invention to the extent that some authors consider the two terms as synonymous while others consider innovation as commercialization of invention [5, 6].

0166-4972/95/US$09.50 © 1995 Elsevier Science Ltd

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Nystrrm [7] broadly defines innovation as "the creation of the future". It is the process of bringing new ideas (new products, processes, services, management techniques, etc.) into use in order for the organization to continue its existence, to be competitive, to grow, and to be in line with the ever changing future. In order to achieve this broad objective every organization needs to be sensitive to its environment. Nystrrm's definition of innovation is also quite similar to the one given by Schumpeter [8], who has been widely recognized as one of the earliest and most significant contributors to the theory of innovation [6]. Schumpeter was also regarded as the first person to recognize the importance of innovation in competition amongst firms, in the evolution of industrial organizations, and in the process of economic growth. His concept of innovation encompasses not just new products or processes, but also new forms of organization, new markets, and new sources of raw materials [7]. Innovation therefore includes everything that leads to sustained growth and future profitability [10]. Another broad definition of innovation is given by Rickards and Moger [11], who define innovation as "the process of making things happen". A somewhat similar definition of innovation is given by Vrakking [12 (p. 95)], who considers an innovation as "any renewal, designed and realized, that strengthens the organization's position against its competitors, and which allows a long term competitive position to be maintained". This paper takes the broader view of the concept of innovation by defining it as "the process of matching organizational and environmental means and needs" since the products of the successful matching of the two items are the innovation outputs in the form of new ideas (products, processes, services, techniques, etc.) to be adopted by the organization. The issue of implementation is crucial in innovation research. This is because the success of the implementation will determine whether any innovation is successfully implemented or not. Since there has not been much research done in Malaysia on the topic, this research represents an

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attempt to investigate one aspect of the topic. Specifically, the research has examined the criteria that are considered as crucial to the success of innovation implementation as reported by various managers and executives in a sample comprising eight large manufacturing firms in Malaysia. A comparison of these factors with those cited in other countries, particularly those from the West, is also carried out in this study. As pointed out by Angle and Van de Ven [13], the implementation period begins when application and adoption activities are undertaken for an innovation. When the innovation is created and developed within an organization, then the implementation processes entail introducing the innovation into the market, moving it to the operating sites or distributing it to potential users. But when the innovation is developed elsewhere, the implementation processes then involve different activities. In this case, the activities involve the host organization carrying out certain activities to introduce and adopt the innovation. Table 1 provides a summary of the combination of the various critical success factors (CSFs) of project implementation found in the literature. We can note from this table that many of the CSFs represent common factors which were cited by many of the researchers. From this table, the agreement among the various researchers as to the factors that are critical or important to project implementation are quite well established in the literature.

2. Research and data collection methods Firstly, certain criteria were developed in order to differentiate the levels of innovation and creativity between a number of matched pairs of firms. Then, an analysis of various factors reported by the various companies to be important to the success of innovation implementation was carried out. Again, using certain criteria, four matched pairs of manufacturing firms in Malaysia were chosen

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Innovation implementations in Malaysian firms

TABLE 1 A summary of the critical success factors of project implementation cited in the literature Factors

Researchers

114-161

Clear project mission, strategies, objectives, goals and directions Top management support and commitment

[14. 16-181

Realistic project schedule/plan (time, money and performance)

[15-17, 19]

Appropriate personnel/skills/expertise (including via training)

[14, 16-20]

Appropriate technology

[14, 16, 18, 20]

Client/user acceptance

[16]

Monitoring and feedback (control system) Ability to handle surprises/crises

[14-17.19, 20] [14-161 [16]

Evolutionary approach to project management, taking into account users' learning process

[201

Use of project management techniques; breaking down of project into modules User participation

114. 171 [14, 15, 18]

Organizational adaptability

[14. 16]

Project manager's leadership style

1161 [181 [18]

Communication

Progressive corporate culture Human consideration - - need to tolerate failure and to provide education by management

from 60 firms which were willing to participate in the research. The distribution of the eight firms selected was as shown in Table 2. The primary data were obtained through interviews using open-ended interview schedules, structured questionnaires, and administration of Ekvall's [21] creative climate questionnaires (CCQs). Contextual data were obtained from informal discussions, annual reports, company newsletters, training manuals and references in published external sources such as newspapers and magazines. Employees representing a cross-section of funcTABLE 2 Respondent categories No. of firms 2 2 2 2

Industry sector Pharmaceutical Oil and gas Basic metals .Food & beverages

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Coded Hi-Pharm:Lo-Pharm Hi-Pet:Lo-Pet Hi-Met:Lo-Met Vegico:Bevco

tions and levels in each of the companies were interviewed. Each of the interviewees was also asked to complete Ekvall's creative climate questionnaire (CCQ) immediately after the interview. The CCQs were also administered to other executives in each firm by giving a batch of 10-20 forms to the contact person or gatekeeper for distribution to more respondents.

3.

Main findings

Six specific issues pertaining to implementation (i.e., the process or steps which the firms followed from the inception of the new idea to the point where the new idea is successfully used by the users) of the firms' innovations, particularly the implementation of the technological innovations, were investigated in this study. The main findings on each of the issues are discussed below.

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3.1

Implementation process

management and workers. By looking at row 2 of Table 3, we can see that workers' contribution to new ideas was welcomed mainly by the more innovation-active firms (Hi-Pharm, Hi-Pet, Vegico and Hi-Met). With regard to the various steps the firms followed to decide whether to implement the new ideas, it can be noted from rows 3-8 of Table 3 that all the firms followed similar steps even though the extent of the evidence obtained from the eight firms varied quite widely. Thus, from the data presented, with the exception that the more innovation-active firms tended to have ideas for change coming from both management and workers rather than from management alone, there were no clear or distinctive differences in the strategies for implementing new ideas between the more innovation- active (Hi-Pharm, Hi-Pet and Hi-Met) and the less innovation-active firms (LoPharm, Lo-Pet and Lo-Met).

Implementation, particularly that of enhancing the implementation stage in problem solving, is a major research interest among researchers [22]. In order to reap the maximum benefits from investments in innovations, organizations must understand and manage their implementation processes [23, 24]. Models of implementation process found in the literature involve many steps and stages [16, 24]. Table 3 shows the pertinent factors and steps followed by the firms in implementing their innovations. With respect to the sources of new ideas, there was sufficient evidence to indicate that new ideas in seven of the eight firms usually come from all levels of management (excluding workers) (see row 1 of Table 3). However, not all the eight firms received new ideas from both

TABLE 3

Pertinent factors and steps in the process of implementations of innovations followed by the firms

Factors/steps

Hi-Pharm

Lo-Pharm

Hi-Pet

Lo-Pet

Hi-Met

Lo-Met

Vegico

Bevco

1.

New idea usually comes from m a n a g e m e n t (excluding workers)

+++

+++

+

+++

++

+++

+

0

2.

New idea usually comes from management and workers

+++

0

+++

0

+

0

+++

++

3.

A new idea is first deliberated by a task force (whose members come from various relevant departments in the firms) appointed by the firm

+++

+

+++

+++

++

+

+

++

4.

Before the new idea is adopted a feasibility study is first carried out

++

+++

+++

+++

+

+++

+++

+++

5.

Final decision on the adoption of a m a j o r new idea is made by top m a n a g e m e n t

+

+++

+++

+++

+

+++

+++

+++

6.

Full commitment by top m a n a g e m e n t is assured once the decision to adopt the new idea is made

+++

++

+++

+

++

+++

+++

+++

7.

User involvement in the implementation process is considered as important to ensure

+++

++

+++

++

+++

+++

+

+++

8.

Feedback on the use of the new idea after it has been implemented is sought by the management

+++

+

0

++

+

+

+++

++

SUCCESS

Legend + + + = strong evidence (reported by 66-100% of the interviewees) + + = some evidence (reported by 50-65% of the interviewees) + = slight evidence (reported by 30--49% of the interviewees) 0 = no clear evidence (reported by < 3 0 % of the interviewees)

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Technovation Vol. 15 No. 6

/nnovation imp/ementations in Ma/aysian firms

3.2 Technical vs behavioural problems in implementation Problems of implementation of innovations are not just technical in nature. In many studies, behaviour-related problems of implementation, such as user resistance to change, have been recognized (see [25, 26]). Thus the problems that need to be managed during implementation of an innovation include technical and behavioural problems. In other words, even if a certain technology were to be successfully installed in a firm, it might not necessarily mean that its people would actually use it. Even if they used it initially, they might not necessarily continue to use it in the future. In such a situation the innovation is successful technically, but failed organizationally [23, 27, 28]. Since the failure of the innovation is not due to technical problems, it may be due to behavioural problems. Normally, when innovations are implemented, many problems are faced and need to be managed by the firms. Among these problems are those related to the technical aspects of the implementation as well as those related to its human or behavioural aspects. As can be seen from Table 4, a number of problems were reported by the interviewees from the eight firms, based on their own experience in implementing innovations in their respective firms. From Section A of Table 4, it can be noted that there were five main problems unexpectedly faced by the interviewees from those firms. The first common problem was that of the timescale involved; i.e., the implementation process took longer than expected (evidence found in Hi-Pharm, Bevco, Vegico and Hi- Pet). The second was the problem of internal scepticism, which was faced by those in Bevco, Lo-Pharm and Lo-Met. Another unexpected problem faced by some of the firms was indeed the problem of managing people, which was thought to be worse than technical problems. Evidence for this sort of problem was found in Lo-Pharm, Hi-Met and Lo-Met. The next unexpected problem faced by some of the firms was that of their lack of knowledge about inno-

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vation. This problem was present in Lo-Pet, LoMet and Vegico. The least of all the unexpected problems reported was that of converting initial sceptics; this was faced by Lo-Met and Bevco. The variability in the types of unexpected problem faced by the firms was not unexpected, considering the fact that the firms not only had different experiences in implementing changes and innovations but also came from four very different sectors of industry. Section B of Table 4 lists the five most difficult problems faced by the interviewees from the eight companies while implementing innovations in their respective firms. From this section of the table, it can be noted that "solving human problems/people management" was the number one problem faced by five (Bevco, Vegico, Lo-Met, Lo-Pet and HiPet) of the eight companies. The evidence obtained also indicates that maintaining momentum for initiative towards innovation was the second most difficult problem faced by the firms. This problem was reported by Lo-Pharm, Hi-Met, Vegico and Bevco. The next three most difficult problems faced by firms, in descending order, were difficulty in solving technical problems (faced by Hi-Pharm, Lo-Pharm and Lo-Met), difficulty in solving general administrative problems (reported by HiPharm and Vegico), and the problem of trying to get a good idea first (reported only by Lo-Met). Considering the fact that the eight firms came from four very different manufacturing industry sectors, the problems faced by these firms should be examined in the context of their previous experience in implementing innovations. As can be seen from Table 4, the more prevalent (either in terms of the number of firms reported to have experienced the problems or in terms of stronger evidence obtained) behavioural problems encountered by the comparatively less innovation-active firms include those related to internal scepticism towards the innovation introduced, perception that people problems are worse than technical problems, conversion of initial sceptics, and difficulty in solving human problems or managing people. By closely examining the unexpected problems and the most difficult problems faced

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TABLE 4

Problems encountered by the interviewees from their experience in implementing innovations

Problem

Hi-Pbarm Lo-Pharm

Hi-Pet

Lo-Pet

Hi-Met

Lo-Met

Vegico

Bevco

A. Unexpected problems learned 1.

Timescale involved (longer than expected)

+++

0

+

0

0

0

+

++

2.

Internal scepticism

0

+

0

0

0

+

0

+++

3.

People problems worse than technical problems

0

++

0

0

+

+

0

0

4.

Their own lack of knowledge

0

0

0

+

0

+

+

0

5.

Conversion of initial sceptics

0

0

0

0

0

+

0

+

B. The most difficult problems faced 6.

Solving human problems/People management

0

0

+

+

0

+++

+++

+++

7.

Maintaining momentum for the initiative

0

++

0

0

++

0

+

+

8.

Solving technical problems

++

+

0

0

0

+

0

0

9.

Solving general (administrative problems)

+

0

0

0

0

0

+

0

Getting the first good idea

0

0

0

0

0

+

0

0

10.

Legend + + + = strong evidence (reported by 66-100% of the interviewees) + + = some evidence (reported by 50-65% of the interviewees) + = slight evidence (reported by 30-49% of the interviewees) 0 = no clear evidence (reported by