1. Home
  2. Vol 6, No 2 (2022)
  3. Ru-Zhue

The Effect of Technological Organization on Cost Innovation and Value Creation

Jintanee Ru-Zhue, Somnuk Aujirapongpan, Yaninee Songkajorn, Kritsakorn Jiraphanumes

Abstract


This research aims to study the effects of technological organization, management of cost innovation, and value creation. The population in this study was the canned and instant food export companies, which are crucial industries that earn incomes for Thailand. The quantitative research method was carried out using questionnaires sent to all companies (census) with the manufacturing managers as respondents. The survey revealed that these companies had a high level of technological organization, value creation, and cost innovation, except for reducing unnecessary functions at a moderate level because the products need to maintain customer demand; therefore, unnecessary adjustments may not be made. PLS-SEM assesses the reflective and structural models to test the research hypotheses. The findings revealed significant influences among three pairs of constructs: (1) technological organization had a positive effect on cost innovation, (2) cost innovation had a positive effect on value creation, and (3) technological organization had a positive effect on value creation. Thus, this research provides empirical information for the influences among the variables and presents the significance of being a technological organization and the inclusion of cost innovation management, to maintain their business during the COVID-19 pandemic and improve the organizational potential for preparation in future circumstances.

 

Doi: 10.28991/ESJ-2022-06-02-09

Full Text: PDF


Keywords


Technological Organization; Cost Innovation; Value Creation; Thailand.

References


Food and Agriculture Organization. (2017). The future of food and agriculture–Trends and challenges. FAO, Annual Report, 296, 1-180. Available online: https://www.fao.org/3/i6583e/i6583e.pdf (accessed on December 2021).

Baxter, W. (2017). Thailand 4.0 and the future of work in the kingdom. Freelance Journalist, Issue March, 1–16. Available online: https://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/meetingdocument/wcms_549062.pdf (accessed on December 2021).

Sisang, K., Jamieson, I., Wongwatcharapaiboon, J., & Chulerk, R. (2020). SATI (Smarter Agriculture Thai Initiative): A Smarter Organic Farming Model for Thai Farmers. In Proceedings of the 11th Built Environment Research Associates Conference, Vol. 25, (BERAC2020), Bangkok, Thailand.

Yaklai, P., Suwunnamek, O., & Srinuan, C. (2018). How intellectual capital, knowledge management, and the business environment affect Thailand’s food industry innovation. Asia-Pacific Social Science Review, 18(3), 30–42.

Siripanwattana, C., Chandrachai, A., & Keeratipibul, S. (2018). Organizational Knowledge and Skills, Managerial Attitudes and Performances regarding Foods Safety in food Manufacturing Firms in Thailand. Asian Journal of Applied Sciences, 6(5), 333–342. doi:10.24203/ajas.v6i5.5469.

Ministry of Commerce Thailand. (2021). Exports group structure. (In Thai). Available online: http://tradereport.moc.go.th/ TradeEng.aspx (accessed on December 2021).

Williamson, P. J. (2010). Cost innovation: Preparing for a “value-for-money” revolution. Long Range Planning, 43(2–3), 343–353. doi:10.1016/j.lrp.2009.07.008.

Bergek, A., Tell, F., Berggren, C., & Watson, J. (2008). Technological capabilities and late shakeouts: Industrial dynamics in the advanced gas turbine industry, 1987-2002. Industrial and Corporate Change, 17(2), 335–392. doi:10.1093/icc/dtn005.

Wang, Y., Lo, H., Zhang, Q., & Xue, Y. (2006). How technological capability influences business performance. Journal of Technology Management in China, 1(1), 27–52. doi:10.1108/17468770610642740.

Zawislak, P. A., Alves, A. C., Tello-Gamarra, J., Barbieux, D., & Reichert, F. M. (2012). Innovation capability: From technology development to transaction capability. Journal of Technology Management and Innovation, 7(2), 14–25. doi:10.4067/s0718-27242012000200002.

Ahmad, N., Othman, S. N., & Mad Lazim, H. (2014). A review of technological capability and performance relationship in manufacturing companies. ISTMET 2014 - 1st International Symposium on Technology Management and Emerging Technologies, Proceedings, 193–198. doi:10.1109/ISTMET.2014.6936505.

Agrawal, P., Narain, R., & Ullah, I. (2020). Analysis of barriers in implementation of digital transformation of supply chain using interpretive structural modelling approach. Journal of Modelling in Management, 15(1), 297–317. doi:10.1108/JM2-03-2019-0066.

Steil, A. V., de Cuffa, D., Iwaya, G. H., & Pacheco, R. C. dos S. (2020). Perceived learning opportunities, behavioral intentions and employee retention in technology organizations. Journal of Workplace Learning, 32(2), 147–159. doi:10.1108/JWL-04-2019-0045.

Čater, T., Čater, B., Černe, M., Koman, M., & Redek, T. (2021). Industry 4.0 technologies usage: motives and enablers. Journal of Manufacturing Technology Management, 32(9), 323–345. doi:10.1108/JMTM-01-2021-0026.

Hess, T., Benlian, A., Matt, C., & Wiesböck, F. (2016). Options for formulating a digital transformation strategy. MIS Quarterly Executive, 15(2), 123–139. doi:10.4324/9780429286797-7.

Sagieva, G., & Kotsemir, M. (2018). Measuring technological level of organisations: methodological approaches and assessment. Foresight, 20(4), 416–442. doi:10.1108/FS-03-2018-0026.

Wu, X., Gu, Z., & Zhang, W. (2008). The construction of innovation networks and the development of technological capabilities of industrial clusters in China. International Journal of Innovation and Technology Management, 5(2), 179–199. doi:10.1142/S0219877008001321.

Costa, L., & De Queiroz, S. R. R. (2002). Foreign direct investment and technological capabilities in Brazilian industry. Research Policy, 31(8–9), 1431–1443. doi:10.1016/S0048-7333(02)00073-2.

Kumar, V., Kumar, U., & Persaud, A. (1999). Building technological capability through importing technology: The case of Indonesian manufacturing industry. Journal of Technology Transfer, 24(1), 81–96. doi:10.1023/A:1007728921126.

Wei, L. (1995). International technology transfer and development of technological capabilities: A theoretical framework. Technology in Society, 17(1), 103–120. doi:10.1016/0160-791X(94)00028-C.

Lee, J., Bae, Z. ‐t, & Choi, D. ‐k. (1988). Technology development processes: A model for a developing country with a global perspective. R&D Management, 18(3), 235–250. doi:10.1111/j.1467-9310.1988.tb00590.x.

Ostraszewska, Z., & Tylec, A. (2015). Reverse innovation – how it works. International Journal of Business and Management, III(1), 57–74. doi:10.20472/bm.2015.3.1.004.

Bengtsson, L., & Wang, W. (2016). Cost innovation in global supply chains: The case of Huawei Technologies. International Journal of Logistics Systems and Management, 23(2), 189–208. doi:10.1504/IJLSM.2016.073969.

Zeng, M., & Williamson, P. J. (2007). Dragons at your door (pp. 1-10). Harvard Business School Press, Boston, United States.

Wunker, S., & Law, J. L. (2018). Costovation: Innovation That Gives Your Customers Exactly What They Want--And Nothing More. AMACOM, New York, United States.

Leliveld, A., & Knorringa, P. (2018). Frugal Innovation and Development Research. European Journal of Development Research, 30(1), 1–16. doi:10.1057/s41287-017-0121-4.

Arshad, H., Radić, M., & Radić, D. (2018). Patterns of Frugal Innovation in Healthcare. Technology Innovation Management Review, 8(4), 28–37. doi:10.22215/timreview/1150.

Lehner, A.-C., Koldewey, C., & Gausemeier, J. (2018). Approach for a Pattern-Based Development of Frugal Innovations. Technology Innovation Management Review, 8(4), 14–27. doi:10.22215/timreview/1149.

Cadeddu, S. B. M., Layton, N., Banes, D., & Cadeddu, S. (2019). Frugal innovation and what it offers the assistive technology sector. Global Perspectives on Assistive Technology, 487.

Cadeddu, S. B. M., Layton, N., Banes, D., & Cadeddu, S. (2019). Frugal innovation and what it offers the assistive technology sector. In N. Layton, & J. Borg, (Eds.), Global perspectives on assistive technology: Proceedings of the GReAT Consultation 2019, Volume 2, 487-502. World Health Organization, Geneva, Switzerland.

Weyrauch, T., & Herstatt, C. (2017). What is frugal innovation? Three defining criteria. Journal of Frugal Innovation, 2(1), 1–17. doi:10.1186/s40669-016-0005-y.

Hyypiä, M., & Khan, R. (2018). Overcoming Barriers to Frugal Innovation: Emerging Opportunities for Finnish SMEs in Brazilian Markets. Technology Innovation Management Review, 8(4), 38–48. doi:10.22215/timreview/1151.

Hossain, M., Simula, H., & Halme, M. (2016). Can frugal go global? Diffusion patterns of frugal innovations. Technology in Society, 46(August 2016), 132–139. doi:10.1016/j.techsoc.2016.04.005.

Hossain, M. (2017). Mapping the frugal innovation phenomenon. Technology in Society, 51(1), 199–208. doi:10.1016/j.techsoc.2017.09.006.

Leliveld, A., & Knorringa, P. (2018). Frugal Innovation and Development Research. European Journal of Development Research, 30(1), 1–16. doi:10.1057/s41287-017-0121-4.

Agnihotri, A. (2015). Low-cost innovation in emerging markets. Journal of Strategic Marketing, 23(5), 399–411. doi:10.1080/0965254X.2014.970215.

Le Bas, C. (2020). Frugal innovation as environmental innovation. International Journal of Technology Management, 83(1–3), 78–96. doi:10.1504/IJTM.2020.109231.

Michael, P. E. (1985). Competitive advantage: creating and sustaining superior performance. London Free Press, Ontario, Canada.

Buytendijk, F. (2006). The Five Keys to Building a High-Performance Organization. Business Performance Management, 4(February), 24–30.

Le, P. B., & Lei, H. (2018). The effects of innovation speed and quality on differentiation and low-cost competitive advantage: The case of Chinese firms. Chinese Management Studies, 12(2), 305–322. doi:10.1108/CMS-10-2016-0195.

Gammeltoft, P. (2004). Development of firm-level technological capabilities: The case of the Indonesian electronics industry. Journal of the Asia Pacific Economy, 9(1), 49–69. doi:10.1080/13547860310001628294.

Müller, J. M., Kiel, D., & Voigt, K. I. (2018). What drives the implementation of Industry 4.0? The role of opportunities and challenges in the context of sustainability. Sustainability (Switzerland), 10(1), 247. doi:10.3390/su10010247.

Wilson, G. (1995). Technological Capability, NGOs, and Small-Scale Development Projects. Development in Practice, 5(2), 128–142. doi:10.1080/0961452951000157104.

Khan, F., & Haleem, A. (2008). Role of technological and people capabilities in India: An empirical study. Global Journal of Flexible Systems Management, 9(2–3), 31–40. doi:10.1007/bf03396541.

De Mori, C., Batalha, M. O., & Alfranca, O. (2016). A model for measuring technology capability in the agrifood industry companies. British Food Journal, 118(6), 1422–1461. doi:10.1108/BFJ-10-2015-0386.

Bowman, C., & Ambrosini, V. (2000). Value Creation Versus Value Capture: Towards a Coherent Definition of Value in Strategy. British Journal of Management, 11(1), 1–15. doi:10.1111/1467-8551.00147.

Lepak, D. P., Smith, K. G., & Taylor, M. S. (2007). Value creation and value capture: A multilevel perspective. Academy of Management Review, 32(1), 180–194. doi:10.5465/AMR.2007.23464011.

Zhu, X., Xiao, Z., Dong, M. C., & Gu, J. (2019). The fit between firms’ open innovation and business model for new product development speed: A contingent perspective. Technovation. 86–87(August), 75–85. doi:10.1016/j.technovation.2019.05.005.

Brown, S. L., & Eisenhardt, K. M. (1997). The art of continuous change: Linking complexity theory and time-paced evolution in relentlessly shifting organizations. Administrative Science Quarterly, 42(1), 1–34. doi:10.2307/2393807.

Priem, R. L. (2007). A consumer perspective on value creation. Academy of Management Review, 32(1), 219–235. doi:10.5465/AMR.2007.23464055.

Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic management journal, 18(7), 509-533. doi.org/10.1002/(SICI)1097-0266(199708)18:7<509::AID-SMJ882>3.0.CO;2-Z.

Zollo, M., & Winter, S. G. (2002). Deliberate learning and the evolution of dynamic capabilities. Organization Science, 13(3), 339–351. doi:10.1287/orsc.13.3.339.2780.

Nahapiet, J., & Ghoshal, S. (1998). Social capital, intellectual capital, and the organizational advantage. Academy of Management Review, 23(2), 242–266. doi:10.5465/AMR.1998.533225.

Costa, J., & Matias, J. C. O. (2020). Open innovation 4.0 as an enhancer of sustainable innovation ecosystems. Sustainability (Switzerland), 12(19), 8112. doi:10.3390/su12198112.

Panda, H., & Ramanathan, K. (1996). Technological capability assessment of a firm in the electricity sector. Technovation, 16(10), 561–588. doi:10.1016/S0166-4972(97)82896-9.

Lichtenthaler, U. (2016). Determinants of absorptive capacity: the value of technology and market orientation for external knowledge acquisition. Journal of Business and Industrial Marketing, 31(5), 600–610. doi:10.1108/JBIM-04-2015-0076.

Fang, C., Chang, S., & Chen, G. (2011). Organizational learning capability and organizational innovation: The moderating role of knowledge inertia. African Journal of Business Management, 5(5), 1864–1870. doi:10.5897/AJBM10.947.

Santos-Vijande, M. L., López-Sánchez, J. Á., & Trespalacios, J. A. (2012). How organizational learning affects a firm’s flexibility, competitive strategy, and performance. Journal of Business Research, 65(8), 1079–1089. doi:10.1016/j.jbusres.2011.09.002.

Moon, H., & Lee, C. (2015). Strategic learning capability: through the lens of environmental jolts. European Journal of Training and Development, 39(7), 628–640. doi:10.1108/EJTD-07-2014-0055.

Booker, D. M., Drake, A. R., & Heitger, D. L. (2007). New Product Development: How Cost Information Precision Affects Designer Focus and Behavior in a Multiple Objective Setting. Behavioral Research in Accounting, 19(1), 19–41. doi:10.2308/bria.2007.19.1.19.

Janz, D., & Westkämper, E. (2007). Design to life cycle by value-oriented life cycle costing. Advances in Life Cycle Engineering for Sustainable Manufacturing Businesses - Proceedings of the 14th CIRP Conference on Life Cycle Engineering, 461–466. doi:10.1007/978-1-84628-935-4_80.

Dunk, A. S. (2012). Assessing the Contribution of Product Life Cycle Cost Analysis, Customer Involvement, and Cost Management to the Competitive Advantage of Firms. Management Accounting, 20(1), 29–45. doi:10.1108/s1474-7871(2012)0000020008.

Pham, T. P., & Quddus, A. (2021). The Impact of Innovation Activities on Firm Efficiency: Data Envelopment Analysis. Journal of Asian Finance, Economics and Business, 8(3), 0895–0904. doi:10.13106/jafeb.2021.vol8.no3.0895.

Kock, N., & Hadaya, P. (2018). Minimum sample size estimation in PLS-SEM: The inverse square root and gamma-exponential methods. Information Systems Journal, 28(1), 227–261. doi:10.1111/isj.12131.

Hair, J. F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When to use and how to report the results of PLS-SEM. European Business Review, 31(1), 2–24. doi:10.1108/EBR-11-2018-0203.

Saraiva, M., Novas, J. C., Ferreira, O., & Pires, A. R. (2017). ISO 9001 Quality Management Systems: A Systematic Literature Review. TMQ-Techniques, Methodologies and Quality, Nº8, Lisboa: Associação Portuguesa para a Qualidade (APQ), 8, 11–43.

Henseler, J., Ringle, C. M., & Sarstedt, M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation modeling. Journal of the Academy of Marketing Science, 43(1), 115–135. doi:10.1007/s11747-014-0403-8.

Hair, J. F., Hult, G. T. M., Ringle, C. M., Sarstedt, M., Danks, N. P., & Ray, S. (2021). Partial Least Squares Structural Equation Modeling (PLS-SEM) Using R. Classroom Companion: Business. doi:10.1007/978-3-030-80519-7.

Shmueli, G., & Koppius, O. R. (2011). Predictive analytics in information systems research. MIS Quarterly: Management Information Systems, 35(3), 553–572. doi:10.2307/23042796.

Shmueli, G., Ray, S., Velasquez Estrada, J. M., & Chatla, S. B. (2016). The elephant in the room: Predictive performance of PLS models. Journal of Business Research, 69(10), 4552–4564. doi:10.1016/j.jbusres.2016.03.049.

Peter, M. K., Kraft, C., & Lindeque, J. (2020). Strategic action fields of digital transformation: An exploration of the strategic action fields of Swiss SMEs and large enterprises. Journal of Strategy and Management, 13(1), 160–180. doi:10.1108/JSMA-05-2019-0070.

Parker, G. G., Alstyne, M. W. Van, & Choudary, S. P. (2016). Platform Revolution: How Networked Markets Are Transforming the Economy. In W. W. Norton & Company, New York, United States.

Khin, S., & Ho, T. C. F. (2019). Digital technology, digital capability and organizational performance: A mediating role of digital innovation. International Journal of Innovation Science, 11(2), 177–195. doi:10.1108/IJIS-08-2018-0083.

Vakeel, K. A., Malthouse, E. C., & Yang, A. (2020). Impact of network effects on service provider performance in digital business platforms. Journal of Service Management, 32(4), 461–482. doi:10.1108/JOSM-04-2020-0120.

Hamad, H., Elbeltagi, I., & El-Gohary, H. (2018). An empirical investigation of business-to-business e-commerce adoption and its impact on SMEs competitive advantage: The case of Egyptian manufacturing SMEs. Strategic Change, 27(3), 209–229. doi:10.1002/jsc.2196.

Zhang, T., Lu, C., Torres, E., & Cobanoglu, C. (2020). Value co-creation and technological progression: a critical review. European Business Review, 32(4), 687–707. doi:10.1108/EBR-08-2019-0149.

Chatterjee, M., & Bhattacharjee, T. (2020). Ownership concentration, innovation and firm performance: empirical study in Indian technology SME context. South Asian Journal of Business Studies, 10(2), 149–170. doi:10.1108/SAJBS-10-2019-0185.

O’Shannassy, T. (2008). Sustainable competitive advantage or temporary competitive advantage: Improving understanding of an important strategy construct. Journal of Strategy and Management, 1(2), 168–180. doi:10.1108/17554250810926357.

Saide, S., Indrajit, R. E., Trialih, R., Ramadhani, S., & Najamuddin, N. (2019). A theoretical and empirical validation of information technology and path-goal leadership on knowledge creation in university: Leaders support and social media trend. Journal of Science and Technology Policy Management, 10(3), 551–568. doi:10.1108/JSTPM-06-2018-0067.

Barua, B. (2021). Impact of total quality management factors on knowledge creation in the organizations of Bangladesh. TQM Journal, 33(6), 1516–1543. doi:10.1108/TQM-06-2020-0145.

Chhabra Roy, N. (2021). Banks and their technology investment decision are aligned or not – an experience of Indian banks. Journal of Facilities Management, 19(1), 1–20. doi:10.1108/JFM-04-2020-0020.

Stylos, N., Zwiegelaar, J., & Buhalis, D. (2021). Big data empowered agility for dynamic, volatile, and time-sensitive service industries: the case of tourism sector. International Journal of Contemporary Hospitality Management, 33(3), 1015–1036. doi:10.1108/IJCHM-07-2020-0644.

Li, T. C., & Chan, Y. E. (2019). Dynamic information technology capability: Concept definition and framework development. The Journal of Strategic Information Systems, 28(4), 101575. doi.org/10.1016/j.jsis.2019.101575.

Beheshti, H. M. (2004). Gaining and sustaining competitive advantage with activity based cost management system. Industrial Management & Data Systems, 104(5), 377–383. doi:10.1108/02635570410537462.

Singh, V., Vaibhav, S., & Sharma, S. K. (2018). Using structural equation modelling to assess the sustainable competitive advantages provided by the low-cost carrier model: The case of Indian airlines. Journal of Indian Business Research, 13(1), 43–77. doi:10.1108/JIBR-12-2017-0260.


Full Text: PDF

DOI: 10.28991/ESJ-2022-06-02-09

Refbacks

  • There are currently no refbacks.


Copyright (c) 2022 Jintanee Ru Zhue, Somnuk Aujirapongpan, Yaninee Songkajorn, Kritsakorn Jiraphanumes