Academic journal article Journal of Business Economics and Management

Innovation Stimulants, Innovation Capacity, and the Performance of Capital Projects

Academic journal article Journal of Business Economics and Management

Innovation Stimulants, Innovation Capacity, and the Performance of Capital Projects

Article excerpt

Introduction

Successful innovation management largely depends on identifying the critical determinants of innovation performance. Accordingly, extensive research examines and identifies a wide variety of measures of innovation and the inputs that affect innovation outcomes (e.g., Jassawalla, Sashittal 2002; Miller et al. 2007; Vaccaro et al. 2011).

One recent finding, for example, is that the firms with more slack resources and higher levels of managerial ownership innovate less when firm performance declines (Latham, Braun 2009). Another finding is that the network density of a firm's partners strengthens the influence of technological diversity, which in turn increases the firm's innovation performance (Phelps 2010).

However, relatively few studies explore innovation from a project perspective. Although several published studies investigate the relationships between innovation and project performance, they primarily examine the relationships between innovation capacity and stimulants (e.g., DeTienne, Koberg 2002; Ebadi, Utterback 1984), between innovation capacity and project performance (e.g., Danneels 2002; Davies, Hobday 2005), or between innovation stimulants and project performance (e.g., Sundstrom, Zika-Viktorsson 2009; Oke, Idiagbon-Oke 2010).

Furthermore, these published studies principally focus on new product development (NPD) and research and development (R&D) - despite the fact that capital projects contribute significantly to the growth of economy. The capital projects industry includes both the delivery and the maintenance of facilities (e.g., commercial, institutional, industrial, and residential buildings; as well as transportation, energy, water, sewage, and communication systems).

Our focus is on the delivery process of capital projects. As a result, there appears to be a lack of research that models and quantifies the triangular relationships between innovation factors (stimulants and capacity) and the performance of capital projects to provide management a complete picture of how innovation affects project performance.

The first objective of this study, therefore, is to explore and assess the relationships between innovation factors and the performance of capital projects. The second objective is to quantify systematically the effects of innovation performance on project performance. Both objectives help stakeholders better measure the impact of improved innovation performance on capital projects.

The rest of the paper is organized as follows. "Research background" reviews related studies, "Hypotheses" delineates the test hypotheses, "Research methods" presents the research methodology and describes the sample collection, and "Results" depicts the statistical tests, model-building, and validation. "Discussions" discusses the implications of the research results. "Conclusions" presents the research summary and conclusions.

1. Research background

Innovation is often thought of as a change in thought process or a useful application of new inventions or discoveries (McKeown 2008), and it often manifests itself in either a new product, service, procedure, or method (Brady, Soderlund 2008). Innovation has been an essential source of competitive advantage since the beginning of the Industrial Revolution (Prajogo, Ahmed 2006), and existing research (e.g., Prajogo, Ahmed 2006; Sampson 2007) demonstrates a wide range of benefits for corporations that are successful in innovation (e.g., increases in operation efficiency, sales, profitability, and market share). Not surprisingly, numerous researchers and practitioners (e.g., Abbey, Dickson 1983; Sampson 2007) conduct extensive studies to develop innovation models through examining and identifying the key determinants of success in innovation.

Whilst numerous models (e.g., Miller et al. 2007; Motohashi et al. 2012; Ooi et al. 2012; Wu et al. 2008) developed for organizational innovation embody technological and human aspects, one group of scholars (e. …

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