Abstract - Research concerning innovation management by definition involves multilevel analysis. Focusing on the in-novation at individual and organizational levels, this study examines the intensity of the relationship between individual creativity and organizational innovation to identify the con-struct of innovation composition process across these two levels. Due to a shift in organizational change management, which exceeds the convenience of advanced information tech-nologies (IT), this study identifies and analyzes the effect of virtual organizational (VO) structure on the interaction between individual creativity and organizational innovation. Through the regression analysis of 128 information and elec-tronic companies in Taiwan, the results show that the adop-tion of VO positively influences organizaadop-tional innovaadop-tion. Furthermore, it positively moderates the relationship between individual creativity and organizational innovation.
Keywords - organizational innovation, individual creativ-ity, virtual organization
I. INTRODUCTION
Innovation involves factors and processes at
individu-al, group, organizational and industrial levels. Generally,
innovation studies have been limited to single-level
ana-lysis. However, it is proposed that the characteristics and
processes of innovation typically concern at least two
levels, and almost all innovations have those qualities
which are active at both levels of analysis [1].
Addition-ally, the dynamism of level shifting generally indicates
that the complexity of multilevel innovation can be missed
if one assumes it at a single level [2]. Since how variables
and mechanisms at one level influence at another is little
known, the construct of relationships between innovations
at different levels is relatively unexplored in
organization-al innovation. In the context at individuorganization-al and
organiza-tional levels, organizaorganiza-tional innovation is “the intenorganiza-tional
introduction and application within a role, group or
organ-ization of ideas, processes, products or procedures, new to
the relevant unit of adoption, designed to significantly
be-nefit the individual, group, organization or wider society”
[3]. As for individual creativity, it is generally manifested
through a product or a service, which is both novel and
useful [4], and also shown at work in the process of
gener-ating ideas or solving problems and the actual idea or
solution [5], which might represents personal traits, being
integrated by means of domain-relevant skills,
creativ-ity-relevant skills, and task motivation [6]. Moreover, it is
considered as a critical antecedent of organizational
in-novation in the previous research [7]. In the context of a
multilevel perspective, this study first investigates the
in-tensity of relationship between individual creativity and
organizational innovation to identify the innovation
pro-cess construct across individual and organizational levels
[8]-[9].
Considering innovation as a typical compilation
pro-cess and treating virtual organization (VO) as the
paramet-er central to the emparamet-ergence process, the second section of
this study identifies the influence of VO on the interaction
between individual creativity and organizational
innova-tion. Moreover, the effects of virtual organization on
or-ganizational innovation are also examined by utilizing
in-formation technologies to promote virtual organizational
structures and innovate organizational activities. The
purpose of this study is to test the moderating effect of
vir-tual organizational structures on the relationships between
individual creativity and organizational innovation
[10]-[14].
II. VIRTUAL ORGANIZATIONS
Since large complex organizations in the last century
have become increasingly heterodox nowadays, the new
post-Bureaucratic forms of organizations, which are
adaptable to the rapidly changing environment, should be
introduced and discussed in the digital age [13]-[15].
Meanwhile, new and more flexible organizational
struc-ture is a core issue in the management of organizational
change. Innovating organizational structures by using
in-formation technologies, this study introduces new
IT-en-abled design variables, and presents how managers
examine the capabilities of companies and then design
suitable structures in this information age. Facing the
fierce competition, organizations advance their structure
to reduce outside pressures. In addition to suggesting
in-novative structures, the second part of this research wishes
to verify the roles which IT-enabled structures play in
or-ganizational innovation and individual creativity, or, in the
innovation management at different levels.
Structure, as the blueprint for activities, includes the
table of organization which covers departments, positions,
and programs. Three affective contextual variables exist,
namely environment, technology, and size, which allow
organizations to generate different types of structures
[16]-[18]. From this perspective, information technologies are
not merely changes of organizational environment, but
also are an important technology to a company,
particu-larly to industries which are information and e-business
related. Managers can use information technologies to
de-velop IT-enabled design variables which are able to help
design suitable structures to manage strategy or
environ-ment fit. Lucas and Baroudi [19] and Boudreau et al. [20]
Innovation and Information Technology in Virtual Organizations: An Empirical
Study
Liang-Hung Lin
1*, Wei-Hsin Lin
21
Department of International Business, National Kaohsiung University of Applied Sciences, Kaohsiung, Taiwan
2Master of European Linguistics, Albert-Ludwigs University of Freiburg, Freiburg, Germany
* Corresponding Author
1188 978-1-4244-6567-5/10/$26.00 ©2010 IEEE
T
ABLE 2RESULTS OF PRODUCT INNOVATION
Product Innovation
Model 1 Model 2 Model 3
b t b t b t Controls Professionalism 0.19 1.81 0.17 1.54 0.15 1.43 Training 0.23 2.01* 0.20 1.92 0.23 1.80 Firm size 0.26 2.03* 0.22 1.85 0.18 1.64 Direct effects Individual creativity 0.55 3.67*** 0.51 3.42*** Virtual organization 0.46 2.92** 0.40 2.49** Moderating effect Individual creativity × Virtual organization 0.35 2.38** R2 0.19 0.52 0.62 ∆R2 0.33*** 0.10*** F 4.89* 12.46*** 8.92*** Partial F 11.67*** 3.90** Note: n = 128, * p < 0.05,** p < 0.01, *** p < 0.001
T
ABLE 3RESULTS OF PRODUCT INNOVATION
Product innovation
Model 4 Model 5 Model 6
b t b t b t Controls Professionalism 0.10 1.02 0.09 0.08 0.05 0.07 Training 0.32 2.34** 0.30 2.23** 0.31 2.51** Firm size 0.11 0.41 0.03 0.06 0.04 0.08 Direct effects Individual creativity 0.36 2.61** 0.34 2.54** Virtual organization 0.33 2.58** 0.31 2.40** Moderating effect Individual creativity × Virtual organization 0.30 2.12* R2 0.22 0.46 0.54 ∆R2 0.24** 0.08** F 5.47** 15.33*** 7.26*** Partial F 6.54** 5.23** Note: n = 128, * p < 0.05,** p < 0.01, *** p < 0.001
Theoretically, various disciplines which contribute to
multilevel organizational innovation theory posit their
own theoretical approach. Rousseau [2] argues that these
disciplines contribute to the macro and micro approaches
which comprise either a concern for organizational level
analysis (sociology, political science, economics) or the
individual and group level analysis (psychology,
anthropo-logy). Although these basic concerns drive much
organiza-tional innovation theory, further development is necessary
to establish innovation methods, which span these basic
disciplines.
The first finding of this research suggests that
indi-vidual creativity has direct effect on organizational
innov-ation, although some other control variables, such as
train-ing, also has fair influence on it. This implies
organiza-tional innovation to be a complex function of specific and
dyadic-networked contributions. From a bottom-up
per-spective, organizational innovation really shows its
char-acteristic of compilation process. Since individual
creativ-ity is only one important component of organizational
in-novation, successful management of organizational
innov-ation still needs the coordininnov-ation of different functions.
Second set of findings reveals virtual organization to be
more influential than individual creativity and all control
variables because it is a major determinant as well as a
moderator in this investigation. On the one hand, structure
type can discriminate the between-group difference of
both organizational innovation and individual creativity.
On the other hand, it can moderate the relationship
between organizational innovation and individual
creativ-ity. Companies of highly virtualized structure not only
possess higher degree of organizational innovation and
employee creativity, but also strengthen the relationship
between innovations at two levels. Innovativeness in
or-ganizational and individual levels co-develop in the same
direction if the companies are highly virtualized. The
reas-on may be due to the adoptireas-on of IT strategy. High density
IT strategy may help the development of R&D activities
in all levels as well as help the communication among
dif-ferent levels.
Finally, this study suggests some possible directions
for future research. First, since we are still in the early
stage of exploring virtual organization, more successful
cases need to be collected and analyzed in order to have a
better understanding of these organizational structures.
Further research needs to be done, in order to provide a
clearer picture of the potential determinants of successful
adoption of virtual organizations in the changing
environment.
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