Gunnar Oskarsson and Eirikur HilmarssonUniversity of Iceland

The impact of information technology, capabilities, and innovation culture on innovativeness

External information

Innovative-ness

Sources of external information

Transfer of external information

External information

Access

Factors

Innovative-ness

Transfer

Trust

Incdentives

Absorptive capacity

Managerial IT skills

Learning orientation

Norms

Prod. mgrs.Service

mgrs

Sales mgrs.Suppliers

Customers Competitors

Alliances

Market orientation

DistributorsOthers

The External information chain in innovation processes

The population

• Have their own international operations, which provide better access to external information than firms that have connections to international customers and partners only through intermediaries (Dunning & Lundan, 2008; Hsu & Pereira, 2008; Zahra et al., 2000).

• Have their own dedicated NPD team or function, which has an impact on the effectiveness of utilizing information in their innovation processes (Orihata & Watanabe, 2000a; Souder & Moenaert, 1992).

• Have an in-house IT department or dedicated functionality which contributes to the effect of managerial IT skills on the utilization of external information (Sher & Lee, 2004).

The sample

Industry Sample ResponsesManufacturing of High tech Machinery 110 48,89% 40 53,33%

Interactive software development 60 26,67% 17 22,67%

Large Other technology 18 8,00% 8 10,67%

Large Food production 32 14,22% 7 9,33%

Small Technology 5 2,22% 3 4,00%

Total 225 100% 75 100%

Managerial IT skills• Company’s performance can be explained in terms of

how effectively it utilizes IT to enhance its core competencies (Bharadwaj, 2000, Mata, Fuerst and Barney, 1995)

• The use of information systems supports the utilization of external information, and the effectiveness of communication within and across the boundaries of the firm, especially in turbulent environments, (Gupta and Govindarajan, 1991, Pavlou and El Sawy, 2006).

Capabilities• Market orientation : an antecedent to

innovation behaviour– acts as a stimulus to do something new or

different in response to changes in market conditions (Kohli and Jaworski, 1990).

• Absorptive capacity : The extent to which firms are able to employ resources in innovation processes (Cohen and Levinthal, 1990, Soosay and Hyland, 2008)

Innovation culture• Innovation culture is a precondition for an

enhancement of performance in innovation processes (Brettel and Cleven (2011) and Brentani and Kleinschmidt (2004))

– Learning orientation – Norms for constructive communication– Trust between providers and receivers of

information

The research model

Innovation culture:

• Learning orientation• Norms for constructive

communication• Trust between providers

and receivers of information

Capabilities:

• Managerial IT skills• Market orientation• Absorptive capacity

Innovativeness

Hypotheses• Market orientation and absorptive capacity will have a

positive impact on the firms innovativeness– H1a: Market orientation is positively related to the

innovativeness of firms– H2a: Absorptive capacity is positively related to the

innovativeness of firms

• Their impact will be enhanced by managerial IT skills– H1b: The impact of market orientation on the innovativeness of

firms will be stronger when managerial IT skills are high– H2b: The relationship between absorptive capacity and the

innovativeness of firms will be stronger when managerial IT skills are high

The impact of culture• Each of the innovation culture variables will

have a positvie impact on the innovativenss of firms

• Each of the innovation culture variables will enhance the impact of the capabilities on the firms innovativeness

Association between culture an capabiliities

Market orientation

Absorptive capacity

Managerial IT skills

Learning orientation

Norms

Trust

Contributions• Identification of capabilities that support

innovativeness, and in particular to what extent they are enhanced by managerial IT skills

• Identifying variables of innovation culture that have an impact on the use of external information in innovation processes and their moderation with the aforementioned capabilities

• Identifying areas which managers should focus on to increase the utilisation of external information in their innovation processes

Limitations and further research• Limited population• Limited range of industries• Limited sample size

• Increase the sample size• Broaden the scope of industries• Include more variables