THE EFFECT OF INNOVATIVENESS AND LEARNING ORIENTATION ON FIRMS PERFORMANCE
Keywords:
Learning Orientation, Innovativeness, Firm Performance, ROAAbstract
The purpose of this study was to investigate the effects of learning orientation on innovativeness, and on a firm performance, the effects of innovativeness on a firm performance, and the effects of the elements of learning orientation relationships on innovativeness and a firm performance in electronic/electrical industry. Learning orientation is comprised of commitment to learning, shared vision, open-mindedness, and intra organizational knowledge sharing whereas innovativeness consists of product innovation, and process innovation. In this study the return on assets (ROA) was obtained from firms’ financial statements and two measurement models were used.
The unit of this study was at the firm level with the focus on factory managers or manufacturing managers in electronic/electrical product and parts industry in Thailand. Later, one hundred and eighty samples were obtained and based on a simple random sampling method. The population sample came from the database of the Department of Export Promotion, Ministry of Commerce of Thailand and then the simple random sampling was applied. Data was analyzed based on descriptive statistics, and Structure Equation Modeling.
Findings revealed two results from the global model and the specific model. According to the global model obtained from the financial statements, learning orientation had effects on innovativeness, but learning orientation and innovativeness had no effects on firm performance. The ROA did not have any effects on the business operation because it required time to get the result when the longitudinal period was considered. According to the specific model obtained from the same financial statement data, the elements of learning orientation including the commitment to learning, shared vision, open-mindedness, and intra organizational knowledge sharing were measured with innovativeness and firm performance. It was found that the commitment to learning, shared vision, and intra organizational knowledge sharing had effects on innovativeness but open-mindedness had no effects on innovativeness whereas the commitment to learning, shared vision, and open-mindedness had no effects on firm performance and only intra organizational knowledge sharing had effects on firm performance. The intra organizational knowledge sharing was considered the elements of learning orientation necessary for ROA which means that a good level of the intra organizational knowledge sharing should be considered as a priority because it will increase the performance on ROA as well.
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