ANALYSIS OF INNOVATION CAPABILITIES AND COMPANY PERFORMANCE: AN EMPIRICAL EVIDENCE OF MALAYSIAN LARGE COMPANIES USING PLS-SEM

Although numerous studies have been conducted to gauge the innovativeness of the Malaysian companies, the understanding on the Malaysian companies' innovation capabilities are still low and unclear. This study employed a structured framework to gauge the innovation capabilities of the Malaysian large companies. This framework is significant in such a way that it clearly distinguished the innovation factors, innovation process, innovation output and innovation outcome of the company. Next, the PLS-SEM was used to validate the innovation capabilities framework and later used to examine the hypothesized relationships that linked all the innovation capabilities constructs with the company performance constructs. A total of 124 responses from the managers were received but only 98 valid responses were used to validate the structural model of this study. The findings confirmed that the framework has the ability to predict the innovation capabilities of the Malaysian large companies. It was also found that design capability; develop capability and prototype capability is significantly related to innovation performance. In addition, the innovation performance was also found to be significantly related to the business performance. Results of this study shall guide the companies in focusing on the innovation processes that needed to be improved in order to expedite their innovation capabilities. (C) 2016 Penerbit UTM Press. All rights reserved