Organizational Innovative Capabilities: An Empirical Study of Malaysian Firms

The role and importance of organizational innovativeness or innovative capability, in attaining competitive advantage has been widely discussed. Most research examines innovation activities and their associations with organizational characteristics or investigates certain perspectives of innovative capability, such as product innovation. Much less attention, however, has been paid to validate overall organizational innovativeness, especially in the context of Malaysian organizational innovativeness. The need for a more accurate description of a firm's innovativeness can be obtained by using a composite measure developed by factor analyzing several innovation variables. A survey was carried out and a data set of Malaysian firms was used to find the measure, which is applicable to explain the innovativeness in firms. Through an extensive literature survey, five dimensions of an organization's overall innovativeness are identified. These five dimensions form the component factors of the organizational innovativeness construct. Factor analysis has been performed to validate this innovativeness construct.