ORGANIZATIONAL INNOVATION AND FIRM PERFORMANCE: A STUDY OF ALBANIAN FIRMS
ORGANIZATIONAL INNOVATION AND FIRM PERFORMANCE: A STUDY OF ALBANIAN FIRMS

Author(s): Rezart Prifti
Subject(s): Economy, National Economy, Business Economy / Management
Published by: Udruženje ekonomista i menadžera Balkana
Keywords: Organizational innovation;Technical innovations;Administrative innovation;Firm Innovativeness;Dual core theory;Innovation radicalness;Ambidextrous theory;
Summary/Abstract: Organizational innovation theories mostly utilize a dichotomous division between types of innovation and stages of innovation. For instance, the dual core theory dissects innovation in administrative and technical dimensions, hereby emphasizing the dissimilarities between technical and social systems of an organization (Daft 1978; Damanpour & Evan 1984). Moreover, the theory of innovation radicalness uses a different phrasing of organizational innovativeness, whereas the ambidextrous theory of innovation examines how an organization adopts certain innovations by identifying two separate stages. This paper’s purpose is to investigate how organizational innovation affects two other aspects of innovation – technical and administrative innovation – which comprise the general innovation construct. The study was conducted employing a sample of 100 Albanian firms, where the organizational innovation model has been enquired to test the effect it exercises on general organizational innovativeness (simply referred to as innovation). This structure is further controlled by the influence of several independent variables, including company size, employee education level, production vs. service-based orientation, and whether the firm sources its research and development (R&D) activities internally or externally. Despite some inconclusive evidence, the empirical findings presented in this study demonstrate an overall positive relationship between organizational innovation and firm innovative activity, as related to technical and administrative innovation. To the best of the author’s knowledge, this is the only Albanian study that measures organizational innovation and firm innovativeness.

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