Organizational learning, innovation and organizational performance : an empirical study of small and medium-sized firms in the ICT industry in Malaysia

Abstract

With the emergence of information and knowledge-based economy, the competitive power of many companies lies in their ability to develop and improve organizational skills and capabilities. Substantial research on the importance of strategic resources as source of competitive advantage has mainly focused on developed economies covering large corporations across different industries. The results of these studies may not hold for developing nations and in particular, small and medium sized enterprises (SMEs) because of the differences in resources and human capital. To address this gap, this research therefore, builds on theories of resource-based, organizational learning (OL) and innovation to examine the strategic links between OL, innovation and organizational performance (OP) in the SMEs. The study was conducted in a Malaysian context from a sample of 450 SMEs which have attained the Malaysian Super Corridor (MSC) status. Four main hypotheses were formulated and tested using structural equation modeling techniques with Analysis of Moment Structure (AMOS Version 18.0) and multiple regression analysis with Statistical Package for Social Science (SPSS Version 17.0). Analysis of the data provided support for all the four hypotheses, and the following findings are established: (i) positive relation between OL and innovation; (ii) positive relation between innovation and OP; (iii) positive relation between OL and OP; and (iv) the mediating effect of innovation between OL and OP. Several implications for theory, management and policy are discussed in light of the findings of the study. The use of single-informant method, cross-sectional research design and focus on a particular industry are s0me of the constraints of this study. Future research may therefore incorporate multiple response method, longitudinal design and cover samples across different industries.