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2022

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06

[Paper Express] Research on the Mechanism of Employee-oriented Promotion of Original Innovation


Abstract:This study constructs the relationship model of employee orientation to enhance the original innovation of enterprises with strategic flexibility and strategic innovation as the intermediary mechanism, and analyzes the regulatory role of enterprise characteristics. The empirical test of the chain multiple mediating effect model proposed in the paper is carried out by using two questionnaires from 303 Chinese enterprises. The results show that employee orientation promotes original innovation through three parallel paths: first, employee orientation enhances strategic flexibility and thus promotes original innovation; Second, employee orientation promotes original innovation with strategic innovation as an intermediary mechanism. Third, employee orientation promotes strategic innovation through strategic flexibility, thus enhancing original innovation. In addition, the chain multiple mediating effect decreases with the increase of enterprise age and enterprise size.

 

Key words:employee orientation; strategic flexibility; strategic innovation; original innovation; chain multiple intermediary; enterprise characteristics

 

Abstract: Since the promulgation of the policies of "Independent innovation" and "to construct an innovative country" in 2006, original innovation has been an unprecedented mode of firm innovation owing to its exclusivity of highly innovative technologies and products. Original innovation is gradually becoming the core of national innovation strategy and sustained competitive advantage. Scholars and practitioners unanimously recognize the great importance and necessity of original innovation. Original innovation research is flourishing, and a large amount of academic research has been undertaken. But the field of original innovation still suffers from several severe shortcomings which seriously limit the development of this area and urgently need to be addressed in-depth. 

Original innovation, which is one of the three types of independent innovations in China and parallel to integrative innovation and re-innovation, is mainly undertaken among Chinese scholars. Existing research primarily pays special attention to the relevant government policies in stimulating firm original innovation, with the firm-level triggering factors especially the influence of strategic orientations being very uncommon. A few notable studies on the relationship between strategic orientation and original innovation have explored the positive effect of entrepreneurial orientation in facilitating original innovation of Chinese firms. Strategic human resource management theory argues that employees are crucial assets of the firm. The firm′s efforts and attention devoted to individual employees and their relationships with the firm, and the fit between human resource management and firm strategies are of considerable significance to firm success. As far as we are concerned, no existing research on original innovation has ever analyzed the influence of employee orientation on original innovation. Furthermore, the internal mechanism through which employee orientation facilitates original innovation also deserves more in-depth attention. Based on the dynamic capability perspective, this study assumes that strategic flexibility and strategic innovation may be the missing mediators between employee orientation and original innovation. In addition, firm characteristics are essential contingent factors which probably exert a critical moderating effect on the research and development of original technologies and products. 

To address these research gaps, this study endeavors to build a theoretical model to analyze the relationship between employee orientation and firm original innovation drawing on the dynamic capability perspective, employee orientation literature, and original innovation literature. Three research questions will be answered. What kind of impact does employee orientation have on firm original innovation? What is the mechanism through which employee orientation influences original innovation? How do firm characteristics such as firm age and firm size affect the relationship between employee orientation and original innovation? Utilizing paired survey responses collected from 303 firms in China, we empirically tested the proposed moderated mediation model and the hypotheses with the PROCESS Macro of SPSS software. Measures of all variables come from extant established studies and are properly adjusted to better fit the Chinese context. Translation and back-translation processes were performed to ascertain the cross-cultural equivalence of all the measures of this study. After a pilot test in ten firms, we verified the questionnaires and sent trained interviewers to 1500 manufacturing firms located in 31 provinces in China to conduct on-site interviews. Using a stratified sampling method, we randomly selected 500 firms with a certain extent of research and development capabilities from each of the three regions of China. For each firm, two top or middle managers filled in the two identical questionnaires independently. 303 usable paired questionnaires with two key informants in each firm were returned, generating a valid response rate of 20.2%. 

The results demonstrate that employee orientation can indeed enhance original innovation when controlling for firm age, firm size, firm state-ownership, and whether the firm is in the high-tech industry. The internal mechanism of this positive effect lies in three parallel intermediary paths: via strategic flexibility, via strategic innovation, and via the chain mediating effect of strategic flexibility and strategic innovation. What is more, the mediating effect between employee orientation and original innovation is reduced with the increase in firm age and firm size, which provides evidence for the moderated mediation model.

The theoretical contributions of this study are three-fold. First, from the perspective of strategic human resource management, this study theoretically analyzed and empirically examined the influence of employee orientation on original innovation of Chinese firms. This mitigates the lack of relevant literature on the triggering roles of strategic orientations on firm original innovation. A few extant studies within this field of research have investigated the impact of entrepreneurial orientation, while no studies ever focus on the influence of employee orientation on original innovation to the best of our knowledge. Second, this study explores the mechanism through which employee orientation enhances firm original innovation and discovers strategic flexibility and strategic innovation as two chain mediators in this link. We unpack the black box between employee orientation and firm original innovation and respond to the recent call for more studies into the internal mechanism of innovation in China. This study enriches the previously under-researched area of the role of employee orientation in stimulating original innovation and expands current understanding of the relationship among employee orientation, strategic flexibility, strategic innovation, and original innovation. Third, this study discusses the crucial contingent role of two firm characteristics, namely firm age and firm size, in the relationship between employee orientation and original innovation. We extend the boundary condition of the relationship between employee orientation and firm original innovation. 

The collective influence of employee orientation, strategic flexibility, and strategic innovation significantly improves original innovation of Chinese firms. Managers should attach great importance to employee orientation, recognize the central role of employees in the original innovation processes, and utilize the positive effects of employee orientation on strategic flexibility and strategic innovation to achieve original innovation in order to stand in the dynamic competition. Nonetheless, firms are supposed to strike a balance between firm characteristics and the extent of employee orientation to strengthen the alignment between the two for the original innovation activities and firm performance. The main shortcoming of this study is the lack of consideration of other types of strategic orientations such as market orientation and technology orientation. We only focus on the critical role of employee orientation in the original innovation processes, but we advocate other scholars who are interested in this line of research to pay more attention to other overlooked strategic orientations in the field of original innovation. 

 

Key words: employee orientation;strategic flexibility;strategic innovation;original innovation;chain multiple mediation;firm characteristics

 

Article Author: Han Chen, Gaoshan Tour

Author: School of Management, Xi'an Jiaotong University

Key Laboratory of Process Control and Efficiency Engineering, Ministry of Education

The full text has been published in Scientific Research Management, Issue 5, 2022.

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