THE ROLE OF TECHNOLOGY MANAGEMENT ON INNOVATION SUCCESS AND PERFORMANCE OF ORGANIZATION- EMPIRICAL STUDY
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1 International Journal of Civil Engineering and Technology (IJCIET) Volume 9, Issue 13, December 2018, pp , Article ID: IJCIET_09_13_080 Available online at ISSN Print: and ISSN Online: IAEME Publication Scopus Indexed THE ROLE OF TECHNOLOGY MANAGEMENT ON INNOVATION SUCCESS AND PERFORMANCE OF ORGANIZATION- EMPIRICAL STUDY Dr. T. Chandrabai Associate Professor, Department of BM, S R Engineering College, Warangal, Telangana, India E. Ramesh Assistant Professor, Department of ME, S R Engineering College. Warangal, Telangana, India Gunda.Mahesh Kumar Assistant Professor, Department of ECE, S R Engineering college, Warangal, Telangana, India ABSTRACT This paper is to study and analyze the role of a technology selection by a company on its success of innovation and performance organizational. The Capability of Technology enables a business firm to add value to process, products and its impact on success of innovation has been studied. Apart from technological capability, a company also needs capability of management technology to manage technological resources in a more effective and efficient manner. In this article, we study the impact of technology on business operations and we develop a model to study the implementation of technology selection, consisting of five elements: technology selection, capability of technology, management capability technology, and innovation success and business performance. The model is empirically tested using the data of 50 companies acquired by interviews and surveys. The results of survey indicate that there is no direct impact of company s technology selected on innovation success; technology selection has a significant positive role on capability technology and technology management capability, which leads to have a positive significant effect on innovation success and innovation success, has a significant positive impact on performance organization. Keywords: Business Performance, Capability of Technology, Management capability of Technology, Technology Selection, Innovation editor@iaeme.com
2 The Role of Technology Management on Innovation Success and Performance of Organization- Empirical Study Cite this Article: Dr. T. Chandrabai, E. Ramesh, Gunda.Mahesh Kumar, The Role of Technology Management on Innovation Success and Performance of Organization- Empirical Study, International Journal of Civil Engineering and Technology, 9(13), 2018, pp INTRODUCTION In this Competitive Business Environment technology innovation can help the company to build competitive advantage through preparing more competitive services, products and more effective processes, or creating completely new business, both managers and academic researchers have been paying more attention to the elucidation of innovation success. Due to increasing cost of innovation, decreasing innovation cycles and increasing technology complexity, the achievement of an innovation of company success has lately received renewed attention. Researchers can be roughly divided into two groups: one group is describing the external factors for success of innovation, most researchers of this team are studying the impact of innovation network, and examining innovations as the result of the innovation process by companies and collaborations between various companies, the innovation process can involve collaboration with many different types of partners, each offering significant resources. The other group is committed to analyzing the internal factors, for example, corporate culture, behavior of employees towards adoption of changing technology, analyzing the business strategy, teams collaboration, technological availability and its capability in using technology. Given these two areas for achieving innovation success, we need to study the primary capabilities on which their impact is based. Several studies have conducted to study the role of technological capability played in success of innovation, and treat technological capability as the heart of innovation capability. However, other than technological capability, business firms also need other capabilities to achieve innovation success, such as managerial capabilities such as planning, organizing, controlling of technology for promoting and utilization of technological resources effectively and efficiently. Among these capability of management, technology management capability, may affect innovation success a lot, and it has begun to receive the researchers attention. in addition, companies need to make technology selection decisions and introduce new technologies continuously, in order to develop new products and services to meet the changing needs of customers or market and acquire the new market growth point, which will help companies to attain the improvement and promotion of performance organizational. There is a positive guiding relationship among technology selection, technology innovation and organizational performance. This paper is prepared as follows: Firstly, we develop a theoretical model to describe the role of technological capability and technology management capability on a success of company s innovation and business performance. Then technology selection is included in this model. Subsequently, the results of an empirical test of the model are discussed. at last, the managerial implications and further research questions are outlined. 2. THEORETICAL ASPECTS OF THE STUDY The rise of technology has paved the way for various innovations. With the increasing technology more and more businesses are increasingly leveraging the benefits of digital tools editor@iaeme.com
3 Dr. T. Chandrabai, E. Ramesh, Gunda.Mahesh Kumar to improve their prospects. Technology has been crucial in turning this process into a complete success of an organization. Information technology has dramatically transformed the lives of individuals. It provides businesses the scope to analyze data and plan business strategies accordingly. Utilizing information technology means that the data analysis is accurate, thus optimizing profits. Technology is applied in the following areas of business: 1. Technology is used in decrease in Cost of production. 2. Technology is applied in meeting competition. 3. Technology is helpful to meet requirement of Customer needs. 4. Technology helpful in strategy formulation and implementation 5. Technology is used controlling business operations such as administration, selling and distribution and production operations. 3. THEORY AND HYPOTHESES 3.1. The role of Technology Selection on Capabilities In a business Organization technology selection is a multi-level decision, including technology strategy selection and concrete technology selection. Technology strategy involves both placing greater importance on Research & Development and new product development and a craving to be the technological leader in the market. Selecting a right technology strategy by a company will make more resources available to Research and Development, employ more highly qualified personnel and create a good corporate culture which will enable to learn new techniques and methods and creativity, which are the basic components of technological capability. In addition, concrete technology selection means the introduction of new and advanced technologies, which are often treated as the source of technological capability. These two points lead to the following hypothesis. Hypothesis 1: There is a significant positive impact of technology selection on technological capability of Business organization. Hypothesis 2: There is a significant positive impact of company s technology selection on the level of its technology management capability The Impact of Technology Selection on Innovation Success The objective of technology selection is to obtain components, new know- how, and systems which will help the business organization to make more competitive services and products and more effective processes. Technology selection means the introduction of new technologies, which will provide opportunities for both service or product differentiation and new business ventures. In addition some re- searchers hold that the right use of technology strategy selection is vital to a innovation of company. We just follow these arguments, and propose a direct relationship between innovation success and technology selection in the following hypothesis. Hypothesis 3: There is a positive correlation between technology selection by a company and innovation of company The Impact of Technological Capability on Innovation Success Technological capability means that a firm s or company s ability to know, use and develop relevant technology internally. This capability enables a firm or company to add value to its process, products and processes or services through new product development and the use of new production processes, thus a company can create new market. Thus, companies with a editor@iaeme.com
4 The Role of Technology Management on Innovation Success and Performance of Organization- Empirical Study high level of technological capability will have more innovation success than companies with only a less level of technological capability. Hypothesis 4: There is positively correlation between level of technological capability and success of Innovation The Impact of Technology Management Capability on Innovation Success Most of the business firms or companies play a vital role on Research and Development through employing more highly qualified personnel, creating a good corporate environment, culture and acquiring more technological resources. However, the results of Research and Development are not always fit for the development of companies or the demand of market, and the performance innovation is not always more. The reason leading to this phenomenon is that the business firms or companies don t pay enough attention towards its technology management capability. Technology management capability is a kind of vibrant capabilities aiming to explain the way in which a business firm should allocates resource and establishes processes for innovation over time, how it generates and employs its existing resources and processes, and where it is necessary they obtains new resources. The level of this management capability determines the effectiveness and efficiency of technological resources utilization. Several studies have shown that technology management capability will have lot of influences on new product development. These arguments resulted to the following hypothesis: Hypothesis 5: There is positively correlation between technology management capability and innovation of company The Impact of Innovation Success on Organizational Performance Several studies have been conducted to study the role technology innovation in the promotion of organizational performance. Robinson s empirical study estimates the role of product innovation on initial market share, and the results show that advantage of the product relative to competing products has the strongest market. Deng holds that innovation is the key driver of companies productivity and growth, patent and copy rights measures reflecting the impact of companies research on subsequent innovations, and the closeness of R&D to science are reliably associated with the future performance of Research and Development intensive companies. Yamin examined the relationships between organizational Innovation and organizational performance in Australian Practice Companies, and the results show that organizational performance is related to organizational innovation, which consists of technical, administrative, and product innovation. We sum up these arguments in the following hypothesis: Hypothesis 6: There is a positively correlation between organizational performance and the degree of innovation The above hypotheses are summarized in Hypothesis 1: There is a significant positive impact of technology selection on technological capability of Business organization Hypothesis 2: There is a significant positive impact of company s technology selection on the level of its technology management capability. Hypothesis 3: There is a positive correlation between technology selection by a company and innovation of company. Hypothesis 4: There is positively correlation between level of technological capability and success of Innovation editor@iaeme.com
5 Dr. T. Chandrabai, E. Ramesh, Gunda.Mahesh Kumar Hypothesis 5: There is positively correlation between technology management capability and innovation of company. Hypothesis 6: There is a positively correlation between organizational performance and the degree of innovation 4. THE EMPIRICAL STUDY AND RESULTS 4.1. Sampling and Data Collection We selects 50 companies located in Hyderabad and Ranga Reddy as the sample, these companies represent of various industries in terms of process type, product and characteristics. Industries in the sample included, manufacturing, pharmacy, and Service Sector industries. The size of these companies ranges between 100 and1500 employees. 50% of these business firm are medium-sized, 40% of these these firms are small ones, and the other 10% of these business firms are large corporations. Most of the business firms have been established for more than 5 years period of time. We collect the data by means of questionnaire, we send a 150 questionnaires to these companies. Some questionnaires are administered in one-to-one interview formats, while others questionnaires are circulated to the designated respondents within each business firm. Most of the respondents are Chief Executive Officers and managers of Research and Development department and market department. After deleting the questionnaires which are with the incomplete data are, the total effective sample size is reduced to Model Testing In testing the Hypothesis all the constructs are considered using seven-point multi-item scales. Multi-item measures are depend on alpha. In addition, confirmatory factor are used to analyze the test using each multi-item measure. The results are found as follows: Table 1 All the alpha is > 0.50, and all the standardized factor loading > 0.65, this shows that both the validity and reliability of the measurement model are good. Table 1. Results of reliability and Indicator Standardized alpha validity testing. Construct factor loading TS Technology Selection TS TS TC Technological Capability TC TC TMC Technology Management Capability TMC TMC Innovation Success IS IS OP Organizational Performance OP OP Having established the validity and reliability of the measurement model, we will use path analysis technique to study the hypothesized structural relationships i.e., the structure model testing. We select the following indices to measure the adequacy of the model: The ratio x 2 of over the degree of freedom (df) is applied as a descriptive measure of overall fit editor@iaeme.com
6 The Role of Technology Management on Innovation Success and Performance of Organization- Empirical Study Values of this ratio smaller than 5 indicate an acceptable model fit. The Goodness-of-Fit Index (GFI), the Adjusted goodness-of-fit Index (AGFI) and the Comparative Fit Index (CFI) should exceed a minimum value of For the root mean square error of approximation (RMSEA), values up to 0.75 indicate a reasonable model fit. Data were analyzed using AMOS 6.0. The level of fit in the structural model is indicated by the fit criteria, see the following table Table 2. Fit testing GFI AGFI CFI RMSEA results of the initial model. X 2 /d f <5 >0.90 >0.90 >0.90 < From Table 2, we can see x 2 /df= 6.89 > 5, RMSEA = 0.09 > 0.08, these results show that the theoretical model is not reasonable. Besides, we get the path coefficient of technology selection and innovation success is 0.029, and the statistics result isn t significant. So we realized that technology selection has no direct impact on innovation success. We delete the direct relationship between technology selection and innovation success in the initial theoretical model. Using Analysis of Movement of Structures (AMOS) to analyze the modified model again, we get the results in the following table 4.3. Data Analysis and Results Table 3. Fit testing results of the modified model. X 2 /d f GFI AGFI CFI RMSEA <5 >0.90 >0.90 >0.90 < Data are analyzed using Analysis Movement of structures 6.0. The test of the initial model indicates that the relationship between technology selection and innovation success is not significant, that means there is no impact of technology selection on innovation success. Thus, Hypothesis 3 is not supported. We therefore exclude this relationship. As shown in Figure 2, the results support Hypotheses 4 and 5. Both capability of technological and management of technology capability have a significant positive impact on success of innovation. We can see that the impacts of both types of capability are about equal. This shows the importance of considering both management and capability as an explanation of a company s success of innovation, which depends as much on technological capability as on technology management capability. Technology selection has a strong influence on technological capability and management of technology capability. Companies that obtain the right technology strategy and concrete technology will build up greater levels of capability, presumably by making more resources available, developing a supportive corporate environment and employing more highly skilled human resources. This confirms Hypotheses 1 and 2. Success of Innovation has a positive impact on performance of organization, which supports the viewpoint that innovation is the source of performance of organizational and this confirms Hypothesis 6. Based on the model as a whole, the following explanation can be specified technology selection supports development capabilities, which, in turn, leads to the achievement of editor@iaeme.com
7 Dr. T. Chandrabai, E. Ramesh, Gunda.Mahesh Kumar success of innovation. Success of Innovation, coming from converting technology selection into capabilities, plays an important role in the promotion of performance of organization. 5. CONCLUSION OF THE STUDY From the above empirical analysis, we obtained the following conclusions: a company s technology selection has no direct impact on success of innovation but a significant positive influence on capability technology and management technological capability, which, leads to, have a significant positive impact on success of innovation, and success of innovation has a positive impact on performance of organization. The technology will leads to success of innovation and performance of organization indirectly. The results and conclusions have two major implications: firstly, capability of technology is not only the capability needed by a business firm or a company to achieve innovation success. Technology management capability can also play an vital role in it. Therefore, the company should strive to develop its technology management capability through enhancing technology in human resources and gear management, information management and organization management. Especially the companies should learn from developed countries to pay increasingly attention to their technology management activities to meet global competition, and increase the level of their technology management capability, through which, resources of technology can be managed effectively and efficiently. Secondly, selection of technology is not directly related to success of innovation. However, it supports the development of capability of technological and technology management capability directly and greatly, which, leads to contribute to the success of innovation. From the above study this point is not difficult to understand, only selecting a good technology strategy or an advanced technology is not enough, it must be transformed into capability of technological and management of technological capability, which will then enable the business firm or company to achieve success of innovation and promote performance of organization. We can find several questions calling for further research: our study just restricted at the role of technology selection and capabilities on success of innovation, the main focus being on the sources of innovation in terms of internal factors. Other factors such as external factors macro environment, capital, network, competition, also play a role in a success of a company innovation, however, these factors were not included in this study. Besides, we did not consider about the environmental factors, such as market forces, industrial factors and so on.. There is evidence that market and technology dynamics can moderate the impact of technology strategy and capabilities, as well as affect a development of company s capabilities. By including these external and factors, we can develop a broader model, which would allow further insights into the mechanisms that achieve success of innovation and promote performance organization. REFERENCES [1] A. B. Assis, External Linkages and Technological Inno-vation: Topical Issues, International Journal of Entre-preneurship and Innovation Management, Vol. 3, No. 2, 2003, pp [2] B. Chakravorti, The Role of Adoption Networks in the Success of Innovations: A Strategic Perspective, Tech-nology in Society, Vol. 26, No. 2, 2004, pp [3] C. C. Rogerio, M. G. Fabio and L. M. Gilnei, Innovation Networks: From Technological Development to Business Model Reconfiguration, Technology Innovation, Vol. 27, No. 8, 2007, pp editor@iaeme.com
8 The Role of Technology Management on Innovation Success and Performance of Organization- Empirical Study [4] W. G. Biemans, Managing Innovation within Networks, Routledge, London, [5] J. A. Czepiel, Patterns of Interorganizational Communi-cation and Diffusion of a Major Technological Innovation in a Competitive Industrial Community, Academy of Management Journal, Vol. 18, No. 1, 1975, pp [6] C. DeBresson and F. Amesse, Networks of Innovators: A Review and Introduction to the Issue, Research Policy, Vol. 20, No. 5, 1991, pp [7] Kafila, Dr. r. Vijaya Srinivas, Impact of foreign Institutional on sensex movements, International journal of Mechnical Engineering and Technology 9(1), 2018, pp [8] Erram Ramesh, A Study on the Impact of Foreign Direct Investment on Indian Retail Sector, International Journal and Magazine of Engineering, Technology, Management and Research, Vol.O.4 and Issue No 10, Oct 2017Pages [9] T.Sampath Kumar, D.Srinivas, A New Technique of secure dat over cloud, Journal of Advance Research in Dynamic and control system, Vol 11-11, July 2017, Page no [10] H. G. Gemünden, T. Ritter and P. Heydebreck, Network Configuration and Innovation Success: An Empirical Analysis in German High-Tech Industries, International Journal of Market Research, Vol. 13, No. 5, 1996, pp [11] S. L. Brown and K. M. Eisenhardt, Product Develop-ment: Past Research, Present Findings, and Future Direc-tions, Academy of Management Review, Vol. 20, No. 2, 1995, pp [12] R. G. Cooper, The Dimensions of Industrial New Prod-uct Success and Failure, Journal of Marketing, Vol. 43, No. 3, 1997, pp [13] R. G. Cooper and E. J. Kleinschmidt, Benchmarking the Firm s Critical Success Factors in New Product Devel-opment, Journal of Product Innovation Management, Vol. 12, No. 5, 1995, pp [14] K.-H. Tsai, The Impact of Technological Capability on Firm Performance in Taiwan s Electronics Industry, The Journal of High Technology Management Research, Vol. 15, No. 2, 2004, pp [15] T. Ritter and H. G. Gemünden, The Impact of a Com-pany s Business Strategy on Its Technological Compe-tence, Network Competence and Innovation Success, Journal of Business Research, Vol. 57, No. 5, 2004, pp [16] B. Carlsson and G. Eliasson, The Nature and Importance of Economic Competence, Industrial Institute for Eco-nomic and Social Research (IUI), Stockholm, [17] G. Dosi and D. J. Teece, Organizational Competencies and Boundaries of the Firm, University of California at Berkeley, Berkeley, [18] Geetha Swaminathan, Dr. R. Magesh, The Future of Innovation Management. International Journal of Civil Engineering and Technology, 8(9), 2017, pp editor@iaeme.com
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