FACTOR ANALYSIS AND ITS APPLICATION IN INNOVATION MANAGEMENT WITHIN MANUFACTURING ENTERPRISES IN ROMANIA
FACTOR ANALYSIS AND ITS APPLICATION IN INNOVATION MANAGEMENT WITHIN MANUFACTURING ENTERPRISES IN ROMANIA

Summary/Abstract: Business management plays a vital role in building processes, structures, and the business environment to make the business innovative and to motivate individuals and teams to innovate. The competitive market, together with the pressure of international competition, emphasizes the importance of businesses successfully managing innovation-enhancing activities. However, innovation management is a complex theme, and its development involves several uncertainties and risks, such as failed ideas, the degree of human motivation, unexpected changes in market requirements, and more. Recently, foreign researchers, in particular, have paid great attention to identifying and exploiting the main incentives for enterprise-level innovation management, leading to many research articles that have adopted different approaches and identified a large number of innovation-related factors. To identify critical factors, factor analysis was used to summarize the data so that relationships and formulas could be easily interpreted and understood. It is commonly used to regroup variables into a limited set of clusters based on the shared variation. Therefore, it helps to isolate constructs and concepts. Knowing the key factors of innovation that can provide sustainable growth and competitiveness to a business is essential, but not least, the primary role of management should be to evaluate innovation investments. Within the current state of the problem, 17 critical factors of innovation were identified through factor analysis. The results have also been demonstrated on a model example of the dependence between R&D costs and significant innovation factors for Romanian enterprises.

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