Measuring the Effect of Trust, Organizational Learning on Taiwan ICT Company's Innovation and Business Performance

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(1)Measuring the Effect of Trust, Organizational Learning on Taiwan ICT Company’s Innovation and Business Performance. by Yi-Ping Tsai. A Thesis Submitted to the Graduate Faculty in Partial Fulfilment of the Requirement for the Degree of. MASTER OF BUSINESS ADMINISTRATION Major: International Human Resource Development. Advisor: Cheng-Ping Shih, Ph. D.. National Taiwan Normal University Taipei, Taiwan June, 2014.

(2) ACKNOWLEDGEMENT I can’t believe I finished my thesis. It’s like a long journey to explore knowledge. Firstly, I need to say thank you to my parents, I can’t image that I can be a graduate student without their support. Thank you for always giving me support and encouragement when I felt tired and depressed. Secondly, I am so appreciated to my advisor Dr. Tony Shih for everything he taught me. He not only paid his time, but also paid his patience to help me to finish the academic task. Besides, he’s also a good mentor for me to learning how to live my life happily and successfully. It’s my honor to have such a great professor in my life. Thirdly, I have to say thank you to my committee members, Dr. Pai-Po Lee and Dr. Steven Lai for contributing their time to give me suggestions for writing my thesis. Also I want to say thank you to every professor of IHRD, especially Dr. Wei-Wang Chang for helping me to finish thesis and giving me a hand when I was in a troublesome situation. Finally, I want to say thank you to all of my classmates. I really had a whale of time with you guys. Thank you for giving me a fantastic life in these two years! For my international classmates, especially Ampi, Dian, Linh, and Elsa, no matter where you are, you guys are always in my mind. For all of my Taiwanese classmates, I love you. Don’t forget how awesome we are. We are the best.. i.

(3) ABSTRACT Knowledge management is being acknowledged as an important issue since the advancement of technology and the globalization. In a highly competitive environment, the need to align business model with complex environments, and the need to satisfy sophisticated customers have led knowledge management as a key element of organizational design. Moreover, in the information communications technology (ICT) industry, knowledge management has been seen as a critical element to increase companies’ business performance. However, since the products and services of the ICT became a necessity for modern people, the competition to get profits has become heightened among an ICT industry. Besides, customers are captious increasingly, they compare everything to get the best one. Therefore, one way to improve ICT Company’s competitive advantage is knowledge management. Seeking to explain the knowledge management in the ICT industry, this research investigated the relations between trust, organizational learning, innovation, successful factors towards innovation, and business performance in the ICT industry. A TSLIP Model was created and analysed by using Partial Least Squares (PLS) method. The findings indicated that trust has a positive effect towards organizational learning; concern for employee plays an important role on trust. Organizational learning has a positive significant effect towards innovation; knowledge transfer and integrate has a biggest effect to organizational learning; the most important factor in successful factors is human-related factors; innovation indeed has a positive significant effect towards business performance in the ICT industry. Practical implications and suggestions were also proposed in order to improve the knowledge management and business performance for the ICT industry. Keywords: trust, organizational learning, innovation, business performance, ICT industry. ii.

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(5) TABLE OF CONTENTS. ACKNOWLEDGEMENT ..................................................................................... i ABSTRACT ..........................................................................................................ii TABLE OF CONTENTS .....................................................................................iv LIST OF TABLES ...............................................................................................vi LIST OF FIGURES .......................................................................................... viii CHAPTER I INTRODUCTION ........................................................................ 1 Background of the Study ................................................................................................... 1 Taiwan ICT Company: Background and Challenges ......................................................... 2 Purposes of the Study......................................................................................................... 3 Research Questions ............................................................................................................ 4 Significance of the Study ................................................................................................... 5 Delimitations and Limitations............................................................................................ 6 Definition of Key Terms .................................................................................................... 7. Chapter II LITERATURE REVIEW ................................................................. 9 Trust ................................................................................................................................... 9 Organizational Learning .................................................................................................. 12 Successful Factors towards Innovation ............................................................................ 15 Innovation ........................................................................................................................ 17 Business Performance ...................................................................................................... 19. CHAPTER III METHODOLOGY .................................................................. 21 Research Framework ....................................................................................................... 21 Research Hypotheses ....................................................................................................... 23 Research Procedure .......................................................................................................... 23 Research Method ............................................................................................................. 25 Instrumentation ................................................................................................................ 26 Descriptive Statistics ........................................................................................................ 29. CHAPTER IV DESCRIPTIVE STATISTICS AND PILOT STUDY FINDINGS .......................................................................................... 33 Sample Characteristics ..................................................................................................... 33 iv.

(6) Descriptive Statistics Analysis ......................................................................................... 35 Pilot Study........................................................................................................................ 42 Correlations Analysis ....................................................................................................... 51 Validity and Reliability Analysis ..................................................................................... 53 Partial Least Square (PLS) Analysis ................................................................................ 55 PLS Findings Discussion ................................................................................................. 59. CHAPTER VI CONCLUSION AND RECOMMENDATIONS .................... 61 Research Conclusions ...................................................................................................... 61 Research Recommendations ............................................................................................ 63 Recommendations for Future Research ........................................................................... 64. REFERENCE ...................................................................................................... 65 APPENDIX A: RESEARCH QUESTIONNAIRE (ENGLISH) ........................ 72 APPENDIX B: RESEARCH QUESTIONNAIRE (CHINESE) ........................ 79 APPENDIX C: PLS RESULTS .......................................................................... 86. v.

(7) LIST OF TABLES Table12.1 Different Definition of Trust ............................................................................ 10 Table02.2 Different Definition of Innovation ................................................................... 18 Table03.1 Reliability of Instrument .................................................................................. 28 Table04.1 Sample Characteristics Based on Demographic Variables (N=70) ................. 34 Table54.2 Trust by Likert Scales, Mean, and Standard Deviation (N =70) ...................... 35 Table64.3 Organizational learning by Likert Scales, Mean, and Standard Deviation (N =70) ................................................................................................................................... 37 Table74.4 Successful Factors towards Innovation by Likert Scales, Mean, and Standard Deviation (N =70) ............................................................................................................. 39 Table84.5 Innovation by Likert Scales, Mean, and Standard Deviation (N =70) ............. 40 Table94.6 Business Performance by Likert Scales, Mean, and Standard Deviation (N=70) ........................................................................................................................................... 41 Table04.7 KMO and Bartlett’s Test of Sphericity Values (Pilot Test-Before dropping items) ................................................................................................................................. 43 Table14.8 KMO and Bartlett’s Test of Sphericity Values (Pilot Test-After dropping items) ............................................................................................................................................... ........................................................................................................................................... 43 Table24.9 EFA: Factor Loadings (Pilot Test, N=37) ........................................................ 44 Table34.10 Reliability Test (Pilot Test, N=37) ................................................................. 45 Table44.11 Reasons for Dropping Items........................................................................... 47 Table54.12 PLS Hypotheses Testing Results (Main Study N=37) ................................... 49 Table64.13 PLS Loadings (Pilot Test, N= 37) .................................................................. 49 Table75.1 Correlation Analysis (Main Study, N=70) ....................................................... 52 Table85.2 KMO and Bartlett’s Test of Sphericity Values (Main Study N=70) ............... 53 Table95.3 Cronbach’s Alpha results for all Dimension (Main Study, N =70) ................. 53 Table05.4 Cronbach’s Alpha results for all Variables (Main Study, N =70).................... 54 Table15.5 Measurement Model Results (Main Study, N =70) ......................................... 56 Table25.6 PLS Loadings (Main Study, N =70) ................................................................ 56 Table35.7 PLS Hypotheses Testing Results (Main Study, N=70) .................................... 57. vi.

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(9) LIST OF FIGURES Figure12.1 The Model of Trust. ............................................................................................... 12 Figure22.2 The Model of Organizational Learning. ................................................................ 14 Figure32.3 The model of successful factors towards innovation. ........................................... 16 Figure42.4 The model of successful factors towards innovation (II). ..................................... 17 Figure53.1 TSLIP model. ........................................................................................................ 22 Figure63.2 Research Process. .................................................................................................. 24 Figure74.1 PLS structural model (pilot study, N=37) ............................................................. 50 Figure85.1 PLS structural model (main study, N=70). ............................................................ 58. viii.

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(11) CHAPTER I. INTRODUCTION. This chapter provided the research background, purposes, questions, and the significance of the research. It was then followed by the delimitations and limitations of the research, along with definitions key terms. All of these were to provide a comprehensive focus of the entire research.. Background of the Study It is a world of knowledge-based economy, and there is no doubt that resources and competencies are essential for organizations to survive and thrive in this competitive world (Subramaniam & Youndt, 2005; Teece, Pisano, & Shuen, 1997).. Knowledge becomes. increasingly important for organization. In the past, information, products and services spread from other continents is difficult and slow. But globalization and technological advances have changed the way how to run the business nowadays. Information, products and services can be quickly spread out by technology. Customers can use internet to get information easily to compare the value of products or services. For example, Google, Facebook or Twitter can be one of way to get information. Organizations can also get feedback immediately through technology. Globalization and technology makes market becomes more and more competitive. In order to increase organizations’ competitiveness, it needs to face the new challenges and use its own resources and competencies to suit to the external environment for creating the best outcomes (Debowski, 2006). Innovation is the key for organizations to use its own resources and competencies to create maximum profit in the competitive knowledge economy (Van der Unpublished, van Beers, & Kleinknecht, 2003). Literatures demonstrated that innovation can increase the competitive advantages of organizations and help organizations deal with the troublesome situations (Baker & Sinkula, 2002; Darroch & McNaughton, 2002; Vrakking, 1990). Innovation not only helps organizations suit to the ambiguous environment but also makes organizations be successful for a long time. It makes organizational innovation be critical in the competitive market. Innovation has become more and more important for organization to create value on its’ products or services (Hitt, Hoskisson, Johnson, & Moesel, 1996). According to Brown and Eisenhardt (1995a), organizations with innovation can create newer and more valuable products or services, respond with difficulties and get the opportunities easily than organizations without innovation. For example, compared to organizations’ competitors, if organizations can use less resources to invent a product or service with the same 1.

(12) values as its’ competitors, organizations can get the more profit. Every time the products were sold, organizations earn more than organizations’ competitors. If organizations can use the same resources as organizations’ competitors to invent a more valuable products or services, organizations can also get the profit. Customers will choose more valuable products or services with the same expenditure, and it makes organizations earn more than organizations’ competitors. It is no doubt that innovation plays an important role on organizations, especially when it desires that adapting to or keeping its’ ahead of competitive global market. The study of innovation has been investigated for a long time. Hundreds of studies have been investigated and contributed to the knowledge of innovation. For example, Barney (1991) stated that innovation can only make organizations have a lot of valuable, rare and special products and services, but also guide organizations to get a great of profit. Innovation helps managers to figure out the way to solve business problems and challenges, which means innovation helps organizations succeed in the complex and tough world (Hult, Hurley, & Knight, 2004). Many models of innovation have presented to see organizational learning that can enhance the innovation. However, not many studies have investigated the big picture of relations of trust, organizational learning, innovation, successful factors towards innovation, and business performance in the ICT industry. The present study tries to link the three variables and explore the relations.. Taiwan ICT Company: Background and Challenges In order to have a better understanding about ICT industry, the researcher needed to explain it first. ICT is an acronym which means Information Communications Technology. To be short, ICT is to use all of the existed digital technology to help individuals, businesses, and organizations to use information. The products of ICT covered the several functions: store information, retrieve information, manipulate information, transmit information, or receive information in a digital way. For example, one of the products from ICT is smart phones. In order to measure the effect in ICT Company, this study choose a famous Multination Corporation in Taiwan office as its sample. The H Multinational Corporation business started at China in 1990s. In the beginning, H Multinational Corporation only had 14 employees and its’ capital was 21 thousands. However, H Multinational Corporation’s annual report in 2013 stated that they earned 240 billion RMB dollars. The products of H Multinational Corporation covered smart phones, broadband wireless, terminal for houses, and so on. Nowadays, its’. 2.

(13) products not only sold in the China, but also sold to most of the world. The mission of the corporation is to be responsible for developing the best intelligent terminal to bring both happy and convenient experiences for its’ customers. It’s interesting to investigate what’s successful factors in this Corporation. Moreover, it’s interesting to investigate how the H Multinational Corporation become so competitive in the market. The H Multination Corporation settle its’ office worldwide to spread its’ services to different countries and areas, included Taiwan. The H Multination Corporation in Taiwan office started its’ Taiwan business since three years ago. The ICT market in Taiwan was full with many competitors when H Multination Corporation decided to enter Taiwan. Now H Multination Corporation in Taiwan tried to break the dilemma to thrive. Therefore, it’s important for H Multination Corporation in Taiwan understanding its’ competitive advantages to set a better strategy in order to be outstanding in Taiwan ICT market.. Purposes of the Study The purpose of this research is to build an integrated model that explores the relations between trust, organizational learning, innovation, successful factors towards innovation, and business performance in the ICT industry. Therefore, the purposes of this research are formulated as follows: 1.. Examine and analyze the effect of trust on innovation.. 2.. Examine and analyze the effect of trust on organizational learning.. 3.. Examine and analyze the effect of organizational learning on innovation.. 4.. Examine and analyze the effect of successful factors towards innovation on innovation... 5.. Examine and analyze the effect of innovation on business performance.. 6.. Examine and analyze an integrated model to measure the effect of trust on innovation, trust on organizational learning, organizational learning on innovation, successful factors towards innovation on innovation, and innovation on business performance by using SEM with Smart PLS software.. 3.

(14) Research Questions Drawing from the research purposes, the research questions are formulated as follows: 1.. Does trust influence innovation in the ICT industry?. 2.. How trust influence organizational learning in the ICT industry?. 3.. How organizational learning effect on innovation in the ICT industry?. 4.. How successful factors towards innovation influence innovation in the ICT industry?. 5.. How innovation influence business performance in the ICT industry?. 6.. What are the path parameter of trust on innovation, trust on organizational learning, organizational learning on innovation, successful factors towards innovation on innovation and innovation on business performance and the total effect of this integrated model?. 4.

(15) Significance of the Study This present study is significant for both practitioners and academics. There are four primary points of significances for this study. First, it adds to the existing innovation knowledge a more comprehensive picture on the relationship between trust, organizational learning, successful factors towards innovation, innovation and business performance. Hundreds of researches investigated and contributed to innovation. Many models of innovation are proved in the academic world to show the characteristics of innovation. However, not many studies have investigated the relationship of trust, organizational learning, successful factors towards innovation, innovation and business performance. This research tries to bond the five variables and explore the relationship. Therefore the present study is significant for the academics as it provides the new perspectives of trust, organizational learning, successful factors towards innovation, innovation and business performance. Second, it adds to the existing innovation knowledge the relationship between innovation and business performance in the context of the ICT industry. There are many studies have conducted the relationship between innovation and business performance, in which business performance is only measured by market performance and financial performance. However, seldom of them considered the variable of partnership performance. This research tries to link the partnership performance to be one of measurement in the business performance. Therefore, the present study is significant for the academics as it provides the specific study of relationship between innovation and business performance within the ICT industry. Third, innovation can have positive or negative outcomes on the company. The positive outcomes include good quality, fast response to the market, valuable products or services, competitive advantages, better job satisfaction, better recruitment, better business performance and so on. The negative outcomes include unprofitable innovation, product failures, customers’ confusions, employees’ pressure, increased turnover, increased costs and so forth. However, not many researches have investigated how trust, organizational learning, successful factors towards innovation affect innovation to cause positive outcomes. Therefore, the present study is significant for the academics as it provides the specific study of relationship between knowledge management, innovation and business performance. Fourth, in the practical side, this research measures the relationship between trust, organizational learning, successful factors towards innovation, innovation and business performance in the H Multinational Corporation to see whether the H Multinational. 5.

(16) Corporation has good knowledge management to enhance innovation or not, and how innovation enhance the business performance. These factors can help the practitioners for their strategies development, in which they can put attention to the factors that improve innovation. The findings of this study also have the potential to assist and investigate knowledge management within ICT industry, and therefore give reliable feedback about the knowledge management inside the organization. Therefore, the present study is significant for the practitioners in relations of innovation.. Delimitations and Limitations Delimitations of the study are the scope of the investigation in order to make research feasible; while limitations are barriers of the study including restrictions of time and resources.. Delimitations This research would be conducted in the H Multinational Corporation in Taiwan office to investigate the relationship among trust, organizational learning, successful factors towards innovation, innovation, and business performance. Furthermore, the relationship among variables explored using the framework Model only.. Limitations The sample will include employees from the H Multinational Corporation in Taiwan. Therefore, the result results can’t be generalized to all the institutions that operate in Taiwan. The questionnaire designed for this research may not be rigorous enough, despite the question items and designed based on theories and previous research. This research has difficulty including all factors that can have influence on the result.. 6.

(17) Definition of Key Terms In order to avoid conceptual confliction of key terms between researcher and readers, this section gives the reader with definitions of the key terms of this research.. Trust Trust is the positive expectations that others’ actions or behaviors were based on people’s experiences, roles, interdependencies and relationships (Shockley-Zalabak, Ellis, & Cesaria, 2003).. Organizational Learning According to the common experiences of members in the same organization, organization can develop its’ new knowledge and visions, and it has the potential to affect members’ behaviors and enhance the organizational capability (Huber, 1991; Slater & Narver, 1995).. Successful Factors towards Innovation In the research, the successful factors was separated into five dimensions, which are organization-related factors, project-related factors, human-related factors, market-related factors, and demographics-related factors. (Shih & Gutierrez, 2011). Innovation Innovation is the adoption of a new idea and behavior (Jiménez-Jiménez & Sanz-Valle, 2011; Zaltman, Duncan, & Holbek, 1973).. Business Performance Organizations use its' own standard to measure the whole outcome of the previous goals it made (Emden, Yaprak, & Cavusgil, 2005).. 7.

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(19) Chapter II LITERATURE REVIEW Chapter Overview In this chapter, it gives plenty of relevant literatures to provide a theoretical foundation for the conceptual model of this research. Theories regarding trust, organizational learning, successful factors towards innovation, innovation, and business performance are mentioned.. Trust Concept and Definition of Trust Trust is viewed as a necessary concept for organization nowadays (Zaheer, McEvily, & Perrone, 1998). Nowadays, agreements and relationships among employees, employers and customers have changed dramatically. It is essential for organization to consider the relationships between them and their employees. Besides, it is also important for organization to consider how to be more competitive through the way how their employees work together. Trust plays an important role in running a business by creating an environment that organizations utilize the minimum resources to increase possibilities of common benefits for members in the organizations (Panayides & Venus Lun, 2009). Moorman, Deshpande, and Zaltman (1993) defined it as a willingness that you depend on an exchange partner who has high confidence in your mind. Trust is the decision which is willing to depend on a partner with the expectation that the partner will act as the common agreement both sides made (Currall & Inkpen, 2002). Trust is without the monitor or the control, a willingness of a party to be vulnerable to the actions of another party based on the expectation that the party will do the particular behavior (Hosmer, 1995; Mayer, Davis, & Schoorman, 1995). Trust is defined as positive expectations to another person’s behavior (Lewicki, McAllister, & Bies, 1998). Shockley-Zalabak et al. (2003) stated that trust is the positive expectations that others’ actions were based on experiences, roles, interdependencies and relationships. Table 2.1 shows the definitions of organizational trust in different views. In this research, it adopts the definition of Shckley-Zalabak’s definition to test o trust in this framework.. 9.

(20) Table12.1 Different Definitions of Trust Author. Journal. Christine Moorman, Rohit Deshpande, & Gerald Zaltman. Journal of Marketing, 57 (1993), 81-101.. Currall, S.C., Inkpen, A.C.. Journal of international business studies, 33-3 (2002), 479-495.. Hosmer, L. T.. Academy of Management Review, 20 (1995), 379-40.. Mayer, R. C, Davis, J. H., & Academy Management Schoorman, F. D. Review, 20 (1995), 709-734. Kathleen Ellis and Pamela Communication Shockley-Zalabak Quarterly, 49-4 (2001), 382-398.. Definition (trust) Trust is defined as a willingness that you depend on an exchange partner who has high confidence in your mind. Trust is the decision which is willing to depend on a partner with the expectation that the partner will act as the common agreement both sides made. Trust is without the monitor or the control, a willingness of a party to be vulnerable to the actions of another party based on the expectation that the party will do the particular behavior. Trust is defined as positive expectations to another person’s behavior. Trust is the positive expectations that others’ actions were based on experiences, roles, interdependencies and relationships.. The Importance of Trust Trust would influence innovation (Hurley & Hult, 1998). For making organizations’ innovation more successful, it is important organizations should have the higher level of trust (Tsai & Ghoshal, 1998). Landry, Amara, and Lamari (2002) mentioned that in order to facilitate innovation, trust can contribute more than other variables. Knack and Keefer (1997) indicated that Lower trust would have a bad impact on innovation, because it may decrease innovation. Trust not only facilitates innovations but also facilitates the capabilities of innovation in the organization (Panayides & Venus Lun, 2009). Trust is regarded as a cornerstone in the organizations. It is the first step for organizations to thrive and survive in 10.

(21) knowledge based economy. Without trust, stakeholders can’t believe what other said. Organizations which are going to invent some competitive products or services need a lot of information to diagnose the comprehensive and complex market. To create and develop more valuable products or services in the competitive market, they must search and collect the information carefully. For investing the resource and time in innovation, it is necessary for stakeholders to make sure everything is true and useful. However, they would doubt the information which was told by those who they don’t believe. In order to filter and examine the validity, organizations spend resources to investigate it. That would increase risks of losing invisible opportunity to get ahead in the competitive market. Therefore, it is so important to keep trust in the organizations for innovation. As Panayides and Venus Lun (2009) states that trust would help organizations facilitate their capabilities for innovation. Without trust, members in organization would stay at their traditional comfort zones and refuse to accept their new roles and responsibility (Fawcett, Magnan, & Williams, 2004). In order to measure organizational trust, Shockley-Zalabak, Ellis, and Cesaria (2003) built a trust model to examine the importance of organizational trust and provide a tool to measure trust in organizations (see figure 2.1). This research adopts its’ measurable way. The model was composed of five dimensions: (1) competence in the organizations and the competence for leaderships in the organizations, (2) openness and honesty, including sincere communication (3) concern for employees from their supervisor, (4) reliability, including the consistent words and actions, and (5) identification which means how organizational members manage their thoughts to organizations.. Hypothesis 1: Trust has no effect on innovation in the ICT industry.. 11.

(22) Concern for Employees Perceived Effectiveness Openness and Honesty. Identification. Trust. Reliability. Job Satisfaction Competence Figure 2.1 The Model of Trust. Adapted from Adapt from “Measuring organizational trust: Cross-cultural survey and index,” by P. Shockley-Zalabak, K. Ellis, & R. Cesaria, 2003, IABC Research Foundation, p.8. Copyright 2014 by International Association of Business Communicators.. Organizational Learning Concept and Definition of Organizational Learning The researches of organizational learning have become more and more important in recent years. As Prahalad and Hamel (1990) stated that organizational learning is an essential element for organizations to be successful in the market. In order to get sustainable competitive advantages and improve business performance, organizational learning is essential (Brockman & Morgan, 2003; Dodgson, 1993b). It can help organizations become more flexible and faster to respond to the dynamics in this complex world (Day, 1994).Organizational learning was defined as through the mutual experiences of people in the same organization, organization develops new knowledge and visions, and it has the potential to affect behaviors and enhance the organizational capability (Huber, 1991; Slater & Narver, 1995). Dodgson (1993b) described it as a way organizations build, supplement and organize knowledge and routines from organizations’ activities and cultures, and use organizational members’ abilities to adapt the environment and develop new things to make organization become more efficient. In this research, it adopts the definition of Huber (1991). 12.

(23) The Importance of Organizational Learning Organizational learning is an important issue for organizations which desire to succeed in the knowledge based economy. Through organizational learning, organizations can absorb knowledge with independence and keep its advantages. On the other hand, organizational learning makes organizations be energetic to respond the challenges. According to Dodgson (1993a), organizational learning has a positive relationship with high level of trust. High level of organizational trust can enhance the effectiveness of organization and facilitate the continuing relationship in the organization (Dodgson, 1993a). Through trust, members in the same organizations have positive and continuous relationships increasing the willingness of learning. Besides, Abrams, Cross, Lesser, and Levin (2003) stated that trust can increase the exchange of knowledge, which means members exchange their knowledge with less cost, and increase the extent that they can absorb and understand. Trust makes members are willing to teach useful knowledge to other members (Renzl, 2008). In another word, trust makes members in the organizations willing to share and teach their useful knowledge to other members with less cost. That makes trust can be one of good ways to predict the successful performance (Currall & Inkpen, 2002). Trust is one of effective element to persuade members to change their views. If trust develop in the organization, it may expect that organizational members will be more willing to share their knowledge to their partners and feel less fear of opportunistic behaviors from other members (Oxley & Sampson, 2004). It makes trust become so important to organizational learning. Whether trust has a relationship to organizational learning will be measured in this research. Organizations in the new competitive environment see themselves as learning organizations, pursuing the objectives of continuous improvement in their knowledge assets (Bontis, 1999). Organizational learning is regarded as an essential element for developing new products or services when the new technologies or industries show in the market. It is an important issue for organizations to keep its’ competitive advantages nowadays (Brockman & Morgan, 2003; Dodgson, 1993b). For organizations, it is so necessary that never giving up learning in the competitive market. Organizations which are still learning from external environment can avoid eliminating from the market. For the process of innovation, organizational learning is an essential part (Meeus, Oerlemans, & Hage, 2001). Learning plays a key role in making organizations to be more flexible and faster in the innovation. 13.

(24) process (Brown & Eisenhardt, 1995b). Follow this logic; it is obviously that innovation results from organizational learning (Hurley & Hult, 1998). In order to evaluate organizational learning in the ICT industry, this research decides to adopt the measurable way which was built by Jerez-Gomez, Céspedes-Lorente, and Valle-Cabrera (2005). They divided organizational learning into four parts. These parts are: (1) managerial commitment; (2) systems perspective; (3) openness & experimentation; and (4) transfer & integrate. Those are represented in figure 2.2 of this section.. Hypothesis 2: Trust has no effect on organizational learning in the ICT industry. Hypothesis 3: Organizational learning has no effect on innovation in the ICT industry.. Managerial commitment. Systems perspective Organizational learning Openness & experimentation. Transfer & integrate. Figure 2.2 The Model of Organizational Learning. Adapted from “Organizational learning capability: a proposal of measurement,” by P. Jerez-Gomez, J. Céspedes-Lorente, & R. Valle-Cabrera, 2005, Journal of Business Research, 58(6), p.722. Copyright 2014 by Elsevier B.V.. 14.

(25) Successful Factors towards Innovation Organizations with innovational capacities can respond to difficulties immediately and get better new products and market opportunities than those organizations with noninnovational capacity (Brown & Eisenhardt, 1995b; Miles & Snow, 2003). Innovational capabilities are regarded as an important element for organizations to achieve strategic competitive advantages (Sher & Yang, 2005). However, what are the successful factors for organizations having better innovational capacities? There are many arguments about what factors will affect innovation capacities successfully. Some studies consider a certain groups of factors are very important, and on the other hand, some studies don’t consider those factors are important, because they consider other factors are more important to have better innovational capacities (Jerez-Gomez et al., 2005). That makes innovation looks like a mystery. Based on the research conducted by Panne et., al (2003), there are originally four important factors that help organizations consider their innovational capacities. These factors are: (1) firm-related (organization-related) factors; (2) project-related factors; (3) product-related factors; and (4) market-related factors. Those are represented in figure 2.3 of this section. It is clearly that those four factors affect different two areas of innovational capacities which are technological area and commercial area. In the end, it affects the outcomes, which are the successful products (or services) in the organizations. In this research, the product dimension is combines with the market dimension. On the other hand, the fifth and sixth factor, human-related factors and demographic factors which are seen as important successful factors to increase innovational capabilities (Shih & Gutierrez, 2011; Shih & Tseng, 2009), were also added in this research to see the importance of human capital and demographic capital. In sum, the successful factors towards innovation in this research are demographic factors, organization-related factors, project-related factors, human-related factors and market-related factors. Those are represented in figure 2.3 and 2.4 of this section.. Hypothesis 4: Successful factors towards innovation have no effect on innovation in the ICT industry.. 15.

(26) Product-related factors. Firm-related factors. Technological Viability. Successful Product. Project-related factors. Commercial Viability. Market-related factors. Figure12.3 The model of successful factors towards innovation. Adapt from “Success and Failure of Innovation: A Literature Review,” by G. Van der Panne, C. Van Beers, & A. Kleinknecht, 2003, International Journal of Innovation Management, 7(3), p.4. Copyright 2014 by World Scientific Publishing Co.. 16.

(27) Satisfied factors Demographic-related factors Innovation (Process innovation, organizational innovation, technical innovation). Organization-related factor Project-related factors Human-related factors Market-related factors. Figure22.4 The model of successful factors towards innovation (II). Adapted from “Measuringthe process innovation competenc of casa pella company in nicaragua,” by C. P. Shih & J. Gutierrez, 2011, Unpublished master’s thesis, National Taiwan Normal University. Copyright 2014 by National Taiwan Normal University.. Innovation Concept and Definition of Innovation Lots of scholars try to catch the definitions of innovation. Thompson (1965) defines innovation as the generation, acceptance, and implementation of new ideas, processes, products, or services. Innovation is the successful implementation of creative ideas within an organization (Amabile, Conti, Coon, Lazenby, & Herron, 1996). Innovation is the adoption of a new idea and behavior (Jiménez-Jiménez & Sanz-Valle, 2011; Zaltman et al., 1973). Innovation is changing the product or process radically or incrementally; besides, it also changes the value of it (Sher & Yang, 2005). Tables 2.2 showed the different definitions of organizational innovation. In this research, it defines innovation as the adoption of a new idea and behavior.. 17.

(28) Table 2.2 The Different Definitions of Innovation Author. Journal. Definition. Thompson, Victor A.. Administrative science. Innovation as the generation,. quarterly (1965), 1-20.. acceptance, and implementation of new ideas, processes, products, or services. Innovation is the successful implementation of creative ideas within an organization.. Amabile, Teresa M,. Academy of management Innovation is the successful. Conti, Regina, Coon,. journal, 39-5 (1996),. implementation of creative ideas. Heather, Lazenby,. 1154-1184.. within an organization.. Jiménez-Jiménez &. Journal of Business. Innovation is the adoption of a new. Sanz-Valle. Research 64 (2011),. idea and behavior.. Jeffrey, & Herron, Michael.. 408-417. Zaltman, G., Duncan,. Wiley, New York. 1973.. R., Holbek, J. Sher, P.J., Yang, P.Y.. Technovation, 25 (2005),. Innovation is changing the product or. 33–43.. process radically or incrementally, besides, it also change the value of it. The Importance of Innovation Researches show that innovation can not only make organizations have a lot of valuable, rare and special products and services, but also guide organizations to get a great of profit (Barney, 1991; Zahra, Ireland, & Hitt, 2000). Innovation frequently links to high financial performance (Calantone et al., 2002; Deshpandé & Farley, 2004). It looks innovation can help organizations develop newer, better and more valuable products or services than organizations’ competitors. Innovation helps organizations enhance its’ positive competitive advantages, and can become the competitive advantages of organizations (Hult & Ketchen, 2001). As Hult, Hurley, and Knight (2004) stated that by innovation, managers can figure out the way to solve business problems and challenges, which means innovation helps 18.

(29) organizations succeed in the complex and tough world. According to above statements, It is observantly that innovation can help organizations thrive and survive in the competitive market. Innovation is a source of sustainable competitive advantage in the organizations and it is important for organizations to increase economic growth (Tushman, Anderson, & O’Reilly, 1997). Even scholars use different tools and ways to measure innovation, and most of them contain process innovation, organizational innovation and technological innovation (Shih & Tseng, 2009). Progress innovation is defined as putting new elements into operation of products or service in organizations, and then it can help the organizations produce better products or make better service (Damanpour & Gopalakrishnan, 2001). Usually, it contains a wide view from finding a potential problem, developing the solutions, commercializing the products or services, spreading its’ information, implementation and consequences (Shih & Gutierrez, 2011). As the general definition of organizational innovation, It is internally creating new device, new system, new process, new service, new policy or new program for organizations to adopt the external environment (Damanpour, 1991). Technological innovation is regarded as using technology or market knowledge to create something new to the customers, and it may be new products or new services (Afuah, 2003).. Hypothesis 5: Innovation has no effect on business performance in the ICT industry.. Business Performance Business performance is that organizations use its' own standard to measure the whole outcome of the previous goals it made (Emden et al., 2005). To measure the business performance in the ICT industry, this research adopts the model which was built by Emden et al. (2005). The model separated business performance into three parts: partnership performance, market performance and financial performance. Partnership performance is the behavior what organizations’ alliances do in order to achieve the common goal. It includes the relationship with organizations’ alliances, the strength of the relationship, stabilities with alliances and the sustainability of organizations’ alliances. Market performance means how success organizations’ products or services are in the existing market and the customers thought about organizations in the future. It is comprised of market development, market share and the development of products. Financial performance is how. 19.

(30) well the resources were utilized and commercial plan was made succeed in the market. It contains four parts: profitability, return on investment, cash flow and cost control.. 20.

(31) CHAPTER III. METHODOLOGY. Quantitative approach was conducted in this study in order to measure the effect of independent variables towards dependent variables. This chapter focused on the research methodology which comprised of several sections, research framework, research procedure, research method, participant, population, and the approach for the instrumentation development.. Research Framework Follow the logic of literature review, a model was proposed. The model was based on Trust Model by Shockley-Zalabak, P., Ellis, K., & Cesaria, R. (2003), Organizational Learning Model by Pilar Jerez-Gómez, José Céspedes-Lorente, Ramón Valle-Cabrera (2005), Successful factors towards innovation Model by Van der Panne et al. (2003); Innovation Model by Cheng-Ping Shih and Deh-Lun Tzeng (2009), and Business Performance Model by Emden et al. (2005). In Figure 3.1, TSLIP model was developed by Cheng-Ping Shih and Yi-Ping Tsai. TSLIP model served as the research framework for this study (see figure 3.1).. 21.

(32) Trust Concern for employee Openness and honesty Identification Reliability Competence. H2. H1 Successful factors towards innovation Organization-related factors Project-related factors Human-related factors Market-related factors Demographics-related factors. H4. Innovation Process innovation Technological innovation Organizational innovation. H5 Business performance Partnership performance Market performance Financial performance. Figure33.1 TSLIP model, developed by C.P. Shih and Y.P. Tsai.. 22. H3. Organizational learning Management commitment System perspective Openness and experimentation Knowledge transfer and integrate.

(33) Research Hypotheses Based on research questions, literature review, and research framework, the following null-hypotheses were formulated as follows: H1: Trust have no effect on Innovation. H2: Trust has no effect on organizational learning. H3: Organizational learning has no effect on Innovation. H4: Successful factors towards innovation has no effect on Innovation. H5: Innovation has no effect on business performance.. Research Procedure After researcher reviewed some literature on innovation, there are several key topics commonly related to organizational learning and business performance. Besides, there are some articles show the importance of trust. It resulted a huge interested for researcher to study it. The literature also showed many studies related to innovation has been conducted on different fields and different countries, but seldom of them did the research in ICT industry, this has prompted this research to focus on ICT industry in Taiwan. Moreover, even the topic was previously well researched, not all of constructs are investigated together and described as a comprehensive theory model for both theoretic and practical field. This study will provide a more comprehensive perspective for innovation in order to help HR field. This study was conducted by following the subsequent research process (see figure 3.2):. 23.

(34) Research Motivation. Proposal Meeting. Review of Literature. Conduct Pilot Study. Identify Problems. Review of Instrument. Identify Research Questions and Hypothesis. Data Collection. Data Coding Develop Theoretical Framework Data Analysis Develop Research Method. Conclusion and Suggestions Develop Instrument. Translation and Expert Review of Instrument. Figure43.2 Research Process.. 24.

(35) Research Method The purpose of this study is to investigate the relationship and the effects of trust on organizational learning and the relationship and the effects of successful factors towards innovation on innovation as well as business performance. The relationship and the effects of organizational learning on innovation as well as business performance in ICT industry, a quantitative approach was perceived as the appropriate methodology. There are several reasons for using quantitative approach in this research. Firstly, quantitative approach can help research to classify, count and construct a statistic model, and help researcher explain the finding of this study (Neill, 2007). Secondly, Quantitative approach provided a more objective way for the research. Within the questionnaire and surveys, this research can make the study more precise and correct. The more objective this research be, the results will be more accurate (Neill, 2007). There are several reasons for using a survey. First, surveys can be analyzed and interpreted quickly, because they are built with the specific topics and key words. Second, it made respondents feel more comfortable, and they can be able to honestly provide their perspectives without any pressures. Since the purpose was investigating what factors may affect employees’ behavior and thinking, this study used self-reported as a measurement. According to Renrsch (1990), instead of individual’s perception of objective reality, individual’s perception of reality can have more affect to human’s behaviors and attitudes. Self-reporting questionnaire surveys allowed respondents to report their perceptions of reality, it was considered as the most suitable measurement for the research of individual’s perception (Howard, 1994; Spector, 2011). This research will focus on Taiwanese ICT industry, even though the results can’t be generalized, the results can provide as a deep data for the new theory development.. Population The population for this study consist full-time employees and managers who were working for H Multinational Corporation in Taiwan. The total employees in H Multinational Corporation in Taiwan were 100. Respondents were selected randomly. Paper questionnaire was used to gather data from staffs. The researcher gave the hard copied to the assistant of H Multinational Corporation in Taiwan, and the assistant gave the hard copies randomly. Employees with self-report can provide a more realistic perceptions to the study. The sample size chosen for the pilot study 25.

(36) was 37 randomly chosen employees. The size of sample may be less, but 35 to 40 sample would be preferable if estimating test-retest reliability (Hertzog, von Oertzen, Ghisletta, & Lindenverger, 2008). For the main study, 80 paper questionnaires were sent to the H Multinational Corporation in Taiwan.. Instrumentation The instrument consisted of 5 variables with total amount of 78 questions. After the pilot test, a statistical analysis was initially conducted to see the validity of the instrument. Some items were dropped as either the items could not pass the minimum requirement of reliability test or factor analysis test. There were six parts included in the questions; which were: part I) basic information; part II) trust; part III) organizational learning; part IV) successful factors towards innovation; part V) innovation; and part VI) business performance. The design of questions was adopted from 5-point Likert Scale. For part I, respondents were asked to choose one of different available options. For part II to part VI, respondents were asked to rate each item with scale anchors ranging from “strongly agree” (5) to “strongly disagree” (1). Part II trust, consist of 5 factors, in total 20 questions were adopted from Shockley-Zalabak, P., Ellis, K., & Cesaria, R. (2003), because the research separated trust into a comprehensive view. The questionnaire were modified and adopted for this research. The validity and reliability of the items were then tested in the pilot test. Part III organizational learning, consist of 4 items, in total 15 questions were adopted from Pilar Jerez-Gómez, José Céspedes-Lorente, Ramón Valle-Cabrera (2005). There are several literature investigate organization learning, the reason adopted from previous research was that research provided a systemic view of organization learning; besides, the reliability and validity are really significant. The questionnaire were modified and adopted for this research. The validity and reliability of the 15 items were also being tested in the pilot test. Part IV and Part V successful factors towards innovation, and innovation, consist of 8 items, the 31 questions were adopted from Van der Panne et al. (2003). The questionnaire were modified and adopted for this research. The validity and reliability of the items were also being tested in the pilot test. Part VI business performance, the 12 questions were adopted from Emden et al. (2005), there’s no previous literature added partnership performance into its’ research model,. 26.

(37) this research provided a more comprehensive view to business performance field. The validity and reliability of the 12 items were also being tested in the pilot test. Moreover, peer reviews and expert review were utilized to preserve the validity of the instrument. Pilot test was initially conducted to ensure the validity of each item, before gathering the whole data for the study.. Validity and Reliability of Instrument Face Validity The reliability of questionnaires should be reexamined again because items are from different studies and each study had different samples. In this study, the reliability of these items were reexamined in a pilot test. Reliability of instrument is the external and internal consistency of measurement. Besides, validity of instrument is the degree to which scales measure what researchers claim they measure (Williams & Monge, 2001). In order to make respondents have a better understanding about questions, the questionnaire was available in both English and Chinese Language. Originally the instrument was gathered in English. Researcher translated English into Chinese. The translation was then revised by two bilingual experts, English – Chinese language translators. The questionnaire was also conducted a back translation to ensure the meaning of each items were not changed. The questionnaire was again reviewed by a Chinese academic professor from international human resource department.. Construct Validity Before testing these factor analyses, there are two analyses that needed to be performed in advance. First is the Kaiser-Meyer-Olkin (KMO) Measure of Sampling Adequacy value. This value indicates the appropriateness of using factor analysis on data. KMO value has to be greater than .80, it can be considered excellent, as it is an indication that component or factor analysis will be useful for these variables. The closer the KMO value is to 1.00, the better the factors extracted from the data will account for the variance in the data (Friel, 2010). However, if the value is above .70, it can also be considered as acceptable. When KMO less than .50, there is a need for remedial action, either by deleting the offending variables or by including other variables related to the offenders. KMO value was tested by using SPSS 20.0 software.Second is the Bartlett’s test for Sphericity. The value tells whether or not the correlations between variables happened by chance. In Bartlett’s test, the small 27.

(38) p-value, which is less than .05, confirmed that a factor analysis may be useful with the data gathered. After the data can pass requirement for KMO test and Bartlett’s test for Sphericity, the data can then undergo the construct validity or factor analyses tests. The convergent validity is established by conducting EFA (factor loadings). EFA is used to test if the factors of each scale are consistent with those of previous studies. The correlations between item’s score with the total score of the dimension are used. If the item-to-total correlations are less than .40, the item is then dropped from further analysis (Kerlinger, 1986). This is because the item may not be correlated with other items that measure the same construct. EFA value was tested by using SPSS 20.0 software. The divergent validity is established by conducting CFA. CFA is also used to test the hypothesis. Factor loadings of the items are observed. Structural equation modeling software is typically used for performing CFA. In this study, CFA value was tested by using SmartPLS 2.0 software.. Table 3.1 Reliability of Instrument Reliability Theoretical Meaning Reliability of Instrument Type Reliability The degree to which a scale Cronbach’s Alpha should be higher than .70, Analysis consistently reflects the then the result is considered acceptable construct (Field, 2007) (Nunnally, 1978). Average variance extracted (AVE) is also computed. A cut-off value should be equal to .50, or the result should be higher is considered acceptable. Individual item reliability is also computed. If the factor loading are below 0.5, then the questions should be dropped, because it means these questions do not belong to a particular factors (Hair, Anderson & Tatham, 2006).. 28.

(39) Table 3.1 (continued) Face Validity. Content Validity. Criterion Validity. Construct Validity. It is a type of measurement validity in which an indicator “makes sense” as a measure of a construct in the judgment of others, especially in the scientific community (Neuman, 2011). It is a type of measurement validity that requires that a measure represent all aspects of the conceptual definition of a construct (Neuman, 2011). It is a type of measurement validity that relies on some independent, outside verification (Neuman, 2011). It is a type of measurement validity that uses multiple indicators and has two subtypes: how well the indicators of one construct converge or how well the indicators of different constructs diverge (Neuman, 2011).. The questionnaire should be examined and translated by native speakers. It should also be examined by two bilingual experts and one Taiwanese academic professionals.. Every questionnaire items refer back to the definition. It is also examined by two peer reviews and expert reviews.. The questionnaire was undergone pilot tests.. also. initially. Convergent validity is established by using Explanatory Factor Analysis (EFA). Before the EFA test, KMO and Bartlett’s test for Sphericity are conducted. If the items are confirmed then EFA can be conducted. Divergent validity is established by using Confirmatory Factor Analysis (CFA).. Descriptive Statistics Descriptive statistics are used to describe the main features of a collection of data quantitatively without employing a probabilistic formulation (Mann, 1995). This holistic overview provides a simple summary about the sample in order to have a better understanding of where the data comes from. This study used frequencies and percentage to compare the sample and population according to categorical variables gender, age, education background and working experience. There are two purposes in using this descriptive statistics. First, descriptive statistics helped to this study to identify whether the sample can represent the case study. Second, it helped this study to identify the main aspects of each variable that seems to be most influential within population under study. Mean and standard deviation are used in pilot test and main study. Descriptive statistics are tested by using SPSS 20.0 software.. 29.

(40) Statistical Analysis Validity and reliability test was conducted to ensure the accuracy of the measurements. Reliability tests were conducted to see the consistency of participants’ answers of each items in the questionnaire. Reliability tests included Cronbach’s alpha item if deleted, Cronbach’s alpha coefficient, and Corrected item-total correlation. The data were then further analyzed by evaluating the coefficient of determination (R2), path coefficients, and t-value (t). These analyses were conducted by using SmartPLS 2.0 software.. Correlation Analysis A correlation analysis is conducted in order to investigate the direction and strength of linear relationship between the independent variables and dependent variables. In the finding, researcher can conclude the relationship between dependent variable is positively or negatively related to independent variable. A high correlation coefficient may not necessarily imply multicollinearity existed between the variables. Since the data has been confirmed by CFA, the items investigated in the study are also confirmed. If CFA is confirmed and the correlation coefficient value is still high, it means that the variables are highly related, and the value of regression can still be accepted. Correlations analysis is tested by using SPSS 20.0 software.. Coefficient of Determination (R2) Coefficient of determination or regression is used to explain the endogenous latent variables to the total variance. This is to show the percentage of how much the data gathered can explain the real situation. The higher the percentage, the data is closer to explain and to predict in reality. Regression value is tested by using SmartPLS 2.0 software.. Structural Equation Modeling (SEM) SEM is used to determine the relationship between set of interconnected variables. In order to test the model can be applied to explain a set of data and to test the model is applicable to explain the situation, this research will use SEM method. Because SEM is suitable for testing proposed research framework and test the validity. There are two core SEM techniques that applicable in this study. First is to perform CFA. Second is to perform causal modeling, or path analysis. Path coefficients values are used to judge the relationship between variables, determine the direction of the relationships and its significance. Partial 30.

(41) Least Square (PLS) is used to measure the path coefficients. The two values of SEM are used to offer an evidence to support or reject the hypothesis proposed in the beginning.. Partial Least Square (PLS). PLS path-modeling algorithm is a type of SEM technique. It allows the simultaneous modeling of relationships among multiple constructs. It was developed by Herman Wold in 1975. PLS estimates path models using latent variables. It’s a tool to confirm both theory and predictions. There are several reasons why this research used PLS. Firstly, it is adequate for small sample analysis and complex models. Secondly, it has the ability to handle a complicated model which based on exploratory research.. 31.

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(43) CHAPTER IV. DESCRIPTIVE STATISTICS AND PILOT STUDY FINDINGS. There are three sections in this chapter. In the first section, it presents sample characteristics of the respondents of this study. In the second section, it presents descriptive statistics of the result which show the mean and standard deviation of each item. In the third section, it presents the result of validity and reliability test from pilot test which is as well as PLS analysis.. Sample Characteristics This study was conducted by distributing 80 paper questionnaires to the employees of the H Multinational Corporation. A total of 70 questionnaires were gathered and validated, it presents the response rate of 90%. The sample characteristics from the respondents are given in Table 4.1, which is divided into categories of gender, age, working experience and educational background. By inspection of table 4.1 in terms of gender, there are higher percentages of male respondents (62%), female respondents are 38%. Respondent whose age were between 36-40 years old are higher percentages in the study (35%), which followed by respondents whose age were above 40 (27%), then respondents within 31-35 years old (23%), below them are respondents within 26-30 years old (15%). Most of respondents’ working experiences are higher than 3 but less than 6 (42%), followed by respondents whose worked higher than 6 but less than 10 (23%), then working experience less than 1 year (19%), below them are higher than 1 but less than 3 (14%), and only 2% of respondents who worked more than 10 years. 70% of respondents have bachelor’s degree, 29% of respondents have master degree, only 1% of respondents have high school degree.. 33.

(44) Table 4.1 Sample Characteristics Based on Demographic Variables (N=70) Gender. Variable Male Female. Entries 44 26. Percentage 62% 38%. Age. 26-30 years old 31-35 years old 36-40 years old Above 41. 11 16 24 19. 15% 23% 35% 27%. Working experience. Less than 1. 13. 19%. Higher than 1 but Less than 3 Higher than 3 but Less than 6 Higher than 6 but Less than 10 Above 10. 10 29 16 2. 14% 42% 23% 2%. High school Bachelor’s Degree Master’s Degree. 1 49 20. 1% 70% 29%. Education. 34.

(45) Descriptive Statistics Analysis After a brief analysis of sample characteristics, this section will provide a summary of the responses gathered for the research. The table will show both mean and standard deviation of every item. Items that were not dropped from analysis would be further elaborated.. SPSS Finding: Trust Table 4.2 shows in the trust section, respondents showed the high agreement with O&H3 (M=4.23) which represented that respondents agreed that they don’t afraid to tell their supervisors when they met troubles. This indicated that H Multinational Corporation has an excellent culture to encourage employees that don’t be afraid asking for help. The second highest score Comp4 which represented “I am satisfied to company’s qualities and services of products (M= 4.16)”. Besides, the lowest score Comp2 (M= 3.57) which meant “I am satisfied to company’s operational efficiency”. This indicated that employees thought their product and service are great, but they have some problem in operational efficiency. The second lowest score is Reli3 (M= 3.66) which showed employees don’t think their top managers keeps commitments to them.. Table54.2 Trust by Likert Scales, Mean, and Standard Deviation (N =70) Survey Questionnaires. Mean. SD. Comp1. I am satisfied to the abilities of company’s employees.. 3.87. 0.658. Comp2. I am satisfied to company’s operational efficiency.. 3.57. 0.809. Comp3. I am satisfied to company’s qualities and services of products.. 4.10. 0.684. Comp4. I am satisfied to company’s competence of achieving its’ goals.. 4.16. 0.673. O&H1. Employees can get enough evaluation of their working abilities.. 3.70. 0.787. O&H2. Employees can have opinions to the decisions which is relevant. 3.86. 0.708. to their jobs. O&H3. When something is wrong, I don’t afraid to tell my supervisor.. 4.23. 0.487. O&H4*. When I don’t agree with my supervisor’s opinions, I don’t feel. 3.86. 0.785. uncomfortable. Note. *items are dropped in further analysis. Comp= Competence. O&H= Openness and Honesty. 35.

(46) Table 4.2 (continued) Survey Questionnaires Conc1. My supervisor listens to me. Conc2. Top management is sincere to communicate with their employees.. Mean. SD. 4.09. 0.717. 3.91. 0.756. 3.81. 0.644. 3.76. 0.731. Conc3*. My supervisor care my personal life.。. Conc4. Top managers listens to the issues what employees care.. Reil1. My superior does what he or she said.. 3.76. 0.624. Reli2. Top managers keep their commitments to employees.. 3.66. 0.759. Reli3. My superior keeps commitments to team members.. 3.87. 0.635. Reli4. My supervisor behaves in a consistent manner form day to day.. 4.00. 0.659. Iden1. I feel connected to my peers.. 3.79. 0.832. Iden2. I feel connected to my supervisor.. 3.91. 0.737. Iden3. My value is similar to my colleagues’ values.. 3.70. 0.645. Idne4. My value is similar to my supervisor’ values.. 3.80. 0.754. Note. *items are dropped in further analysis. Conc= Concern for Employee. Reil= Reliability. Iden= Identification.. 36.

(47) SPSS Finding: Organizational Learning Table 4.3 shows that concerning organizational learning, the respondents showed the high agreement with KTI1 (M= 4.06), which showed that respondents agreed that teamwork is a usual method in company. The second highest were both MC1 and MC2 (M= 3.91), it pointed out employees’ learning ability is most important for the H Multinational Corporation. The lowest scores O&E1 (M= 3.54) indicated that employees don’t think company promote innovative ideas. Moreover, the second lowest item SP3 (M= 3.57) showed that respondents don’t think every business unit in H Multinational Corporation has a tight working relationship.. Table64.3 Organizational Learning by Likert Scales, Mean, and Standard Deviation (N =70) Survey Questionnaires Mean SD MC1 Employee learning capability is considered a key factor in 4.09 0.717 company. MC2 Employee learning is considered an investment rather than an 3.91 0.756 expense. MC3 Innovative ideas that work are rewarded in company. 3.81 0.644 MC4* Top managers look favorably on carrying out changes in any 3.76 0.731 area to adapt to and/or keep ahead of new environmental situations. SP1 All employees have generalized knowledge regarding 3.81 0.597 company’s objectives. SP2 All parts that make up this company (departments, sections, 3.73 0.741 work teams, and individuals) are well aware of how they contribute to achieving the overall objectives. SP3 All parts that make up this company (departments, sections, 3.57 0.844 work teams, and individuals) are interconnected, working together in a coordinated fashion. O&E1 Company promotes experimentation and innovation to improve 3.54 0.846 the work processes. O&E2 Company follows up what other companies in the sector are 3.61 0.839 doing, adopting those practices and techniques it believes to be useful and interesting. Note. *items are dropped in further analysis. MC= Management commitment. SP= System perspective. O&E= Openness and experimentation.. 37.

(48) Table 4.3 (continued) O&E3. O&E4. KTI1 KTI2 KTI3 KTI4. Experiences and ideas provided by external sources (advisors, customers, training firms, etc.) are considered a useful tool for this company’s learning. Part of company’s culture is that employees can express their opinions and suggestions regarding the procedures and methods in place for carrying out tasks. Teamwork is the usual way to work in company. Errors and failures are always discussed and analyzed in company’s every levels. Employees have the chance to express new ideas, programs, and activities that might be of use to the company. Company has tools (manuals, databases, files, organizational routines, etc.) that allow what has been learned in past situations to remain valid, although the employees are no longer the same.. 3.70. 0.768. 3.69. 0.627. 4.06 3.63. 0.657 0.887. 3.60. 0.769. 3.90. 0.764. Note. O&E= Openness and experimentation. KTI= Knowledge transfer and integrate.. SPSS Finding: Successful factors toward innovation Table 4.4 in the dimension of successful factors toward innovation variables showed agreement concerning the aspects of factors toward innovation. The highest item MRF3 (M= 4.17) showed that the market threats are come from global competitors, comply with general idea of Multinational Corporation. Second highest MRF2 (M= 4.11) showed high agreement of “company’s products can satisfy market demands in time.” Nevertheless, the lowest item DRF2 (M= 3.21) and second lowest item DRF1 (M= 3.31) showed that respondents don’t think demographic factors can help company have better innovative talents and innovative abilities.. 38.

(49) Table74.4 Successful factors towards innovation by Likert Scales, Mean, and Standard Deviation (N =70) Survey Questionnaires DRF1 Company’s location contributes to recruiting potential innovative employees. DRF2 Company’s location which is near the same market competitors plays an important role on encouraging employees’ innovative idea. DRF3 Departments’ arrangement of places plays an important role on encouraging colleagues’ innovative idea. ORF1* The reward system of company is fair. ORF2 R&D department is the main source of innovation. ORF3 Top managers have specific visions to the business development of company. ORF4 Compares to other department, our R&D department should recruit more employees. PRF1 Project management in company is flexible. PRF2 Project quality in company fits to clients’ demands. PRF3 Company takes full consideration of project management’s cost control. PRF4 Our department can correctly evaluate the risk of project management. HRF1 Employees are willing to obtain new information. HRF2 Functions of the job content conform to employees’ self-expectations. HRF3 Employees’ expertise can highly use in their work content. HRF4 Company clearly understands how to fully utilize employee ability. MRF1 Company is able to keep track of the global target market. MRF2 Company’s products can satisfy market demands in time. MRF3 Company market threats are come from global competitors. MRF4 Company market research and response strategies can fully predict market opportunities. Note. *items are dropped in further analysis. DRF= Demographics-related. Mean 3.31. SD 0.713. 3.21. 0.679. 3.44. 0.694. 3.09 3.39 3.80. 0.794 0.767 0.694. 3.60. 0.841. 3.49 3.81 3.66. 0.756 0.728 0.611. 3.71. 0.684. 3.66 3.59. 0.720 0.712. 3.70 3.69. 0.645 0.692. 3.99 4.11 4.17 3.99. 0.807 0.671 0.680 0.712. factors.ORF=. Organization-related factors. PRF=Project--related factors. HRF= Human-related factors. MRF= Market-related factors.. 39.