Innovation process and strategic contingency of the machinery manufacturers in Korea

Abstract

The purpose of this study is to investigate the processes of technological innovation, and to identify the factors associated with successful innovations in a developing context. The present study also makes an attempt to examine the strategy and resource capabilities of the innovative firms in order to provide useful managerial and policy implications for development of innovation. On the basis of existing knowledge and logical reasoning this study develops a hypothetical model of the innovation process in a developing country, Korea, and builds a contingency model of the relationship between strategy types and resources of an organization. As a consequence, eight initial hypotheses are delineated. The data required to test the hypotheses were collected through questionnaires and personal interviews from 47 manufacturing firms designated as NDIM (Newly Developed Innovative Machines) in the machinery industry of Korea. The results of data analysis indicate that : 1. Market factors appear to exert a primary influence on the origination of innovations. 2. The customer firms play a crucial role in problem solving as well as in idea generation of innovation. 3. The innovative firms make more attempts at new product development than the other strategic alternatives such as promotion or Q.C. activity. 4. The degree of imitation of new product tends to be higher when the foreign sample product is locally available than when not. 5. For firms in the machinery industry of Korea, Defender and Prospector strategy represent the dominant strategy types. Especially, those which have a competitive advantage in Physical and Organizational resource areas tend to adopt Defender strategy, while those which have an advantage in Technical Human resource area tend to adopt Prospector strategy. 6. In addition, the firms behavior for the development of innovation show several different patterns according to foreign sample availability and stimulus source of innovation. As a re...