Organizational Innovation in Manufacturing Firms

Abstract

The need for continuous sustainable innovation reflects a way in which firms overcome inertia and respond to changes in the external environment. In manufacturing firms, the primary source of innovation comes from product-related innovation (product innovation) and technology-related innovation (process innovation). Although economic forces have encouraged the spread of innovative work organization and management, so far, these practices have been implemented only recently and unevenly across large-scale, technology-intensive manufacturing industries. Drawing on primary survey data on pulp and paper, biotechnology, and renewable energy firms, the objective of this paper is to examine the role that management innovation plays in improving the performance of traditional innovation (R&D, technology, and process) and the market and financial position of manufacturing firms. Our study shows that management innovation helps manufacturing firms to be more efficient and competitive by optimizing the use of resources and favoring sustainable development.

Keywords: management innovation, manufacturing firms, firm performance, innovation activity, pulp and paper, biotechnology, renewable energy

JEL Classification: L6, O32