Academic journal article Indian Journal of Industrial Relations

Factors That Facilitate Innovation in the Conventional Heavy Engineering Industry

Academic journal article Indian Journal of Industrial Relations

Factors That Facilitate Innovation in the Conventional Heavy Engineering Industry

Article excerpt

This study explores the relationship between components of structure and innovation. Components of structure include hierarchy, formalization, empowerment, centralization and participative decision making. Innovation is measured by number of innovations and perceived innovativeness. Results were analyzed using both quantitative and qualitative (content analysis) techniques. Significant relationship was found between hierarchy and innovation. A positive and significant relationship was found between formalization and innovation. A negative and significant relationship was found between centralization and innovation. A positive and significant relationship was found between participative decision making and innovation.

Introduction

The design and practice of organization can be optimized to provide a base for constant innovation (Moore, 2004). Arora, Belenzon and Rios (2014) propose that firms pursuing innovations need a well-matched supporting structure for the purpose of innovations. Structure not only shapes innovation but plays an active role in successful implementation. Therefore the distinguishing organizational characteristics of innovative firms are of interest to researchers (Souitaris, 2002; Subramanian & Nilakanta, 1996). Subramanian and Nilakanta (1996) found the relationship between organizational characteristics and firm innovativeness. According to them innovativeness is a multidimensional construct. Organizational characteristics they studied were centralization, formalization and specialization. Truly innovative organizations, according to Subramanian (1996), are those that exhibit innovative behavior consistently over time. He proposes that an organization's strategic orientation reflects long-term or temporally enduring behaviors, innovativeness is also an enduring organizational trait.

Broadly innovation not only includes development of new products and services, but also new operating practices, processes, managerial tactics and even business strategies. It may not always be a process of creating, it is rather a process of building, improving and adapting (Youtie, 2003). An organization's structure can best be studied by using perceptual measures. Researchers like Hage and Aiken (1977), Daftaur (1988), Reddy (1997), Singh and Pestonjee(1988) among many others have studied and measured organization structure as a perceptual/behavioral variable. The current study is an exploratory research, partly behavioral in nature. The approach to the study of structure-innovation relationship suggested in the study may be regarded as a basis for speculative thinking and future research.

Objective

To study the relationship between components of structure and innovation in the heavy engineering industry of India.

Literature Review

Opportunity for growth and promotions is an important motivating/rewarding factor for employees to innovate (Anderson, Dreu & Nijstad, 2004). Smith and Ainsworth (2005) found that hierarchy presents opportunities for managers to meet power, authority and status needs, and have motivational affect for encouraging innovations. Leavitt (2003) found that despite their negative reputations many hierarchies have proved quite capable of change and have demonstrated impressive adaptability to change. He posits that hierarchies deliver a real, practical and psychological value by fulfilling a deep human need for order and security, hence, can facilitate innovations. On the basis of the above research, the following proposition was generated.

Proposition 1: Hierarchy has significant relationship with perceived innovativeness.

Significant positive correlation between formalization and implementation of innovations was found by Khandwalla (1995) in bureaucratic organizations of India. Weick (1998) found that formalization is required for effective implementation of creative ideas. Formalization settles ambiguity and uncertainty and greater autonomy and flexibility at implementation stage might even be harmful for innovations according to Drach-Zahany, Somech, Granot and Spitzer (2004). …

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