THE INFLUENCE OF ORGANIZATIONAL CULTURE ON INNOVATION MANAGEMENT OF MALAYSIAN SMALL AND MEDIUM ENTERPRISES (SMEs) TOWARDS INDUSTRY 4.0

Abstract

The global economy is constantly changing and developing, and companies need to keep up with those changes. Organizational culture is a significant problem that has a huge influence on innovation and innovation management, while innovation is generally regarded as a vital source for developing companies to grow and evolve. Organizational culture is a significant construct that affects individuals, organizational processes and results. A culture that instill innovation in an organization is important particularly in developing countries in order to grow rapidly in the competitive world. This research was conducted to determine the influence of organizational culture on innovation management of Malaysian Small and Medium Enterprises (SMEs) towards industry 4.0. The study has examined relevant academic research papers and measurement models that concerned all research variables and Cameron and Quinn model are selected in this research. Cameron and Quinn's Competing Values Framework (CVF) model categorize culture into four, using two dimensions consisting of clan, adhocracy, market and hierarchy. Hofstede cultural dimension theory was used to support the model in this research. Data was collected from primary sources using a questionnaire as the method for data collection, and it was tested using IBM Statistical Package for the Social Sciences (SPSS) statistics 24. The items of the questionnaire were adapted from Cameron and Quinn’s Organizational Culture Assessment Instrument and the questionnaire was distributed to the executives of 50 SME manufacturing companies in Negeri Sembilan. 100 questionnaires were received out of 175 questionnaire that were distributed and it was used to perform data analysis for this study. A few different types of analysis were conducted in this research which consists of descriptive analysis, reliability test, factor analysis, Pearson correlation analysis, and simple linear regression analysis. The result shows that adhocracy culture has the highest correlation and strongest determinant of innovation management. Moreover, all the four dimensions of culture, also known as the independent variables are important factor as it achieved a P-value of 0.000 which indicated that it has a significant influence on the innovation management of Malaysian SMEs towards industry 4.0. It can be concluded that all of the research hypothesis that were tested was accepted and all the four objectives was achieved in this study.