The Relationship between Organizational System and Disruptive Innovation Capability

Abstract

The modern business is characterized by volatile, uncertain, complex and ambiguous (VUCA) environment which necessitate companies to have the leading competitive traits such as state-of-the art technologies, ability to shorten time to market for new product and widening product or service applications (Bennett and Lemoine, 2014). Developing these capabilities will result in business advantage for owning companies and position itself as technology leaders ahead of competitors which subsequently will suffer from major structural gap. Kaal and Vermuelen (2017) argue that disruptive innovation is known for its ability to reshape industries throughout history through competitively developing new customers, interfere with present business or reaching to new business frontiers. However, disruptive innovation is notoriously known for the low success rate and as according to Marnix A. (2006) significant number of firms fail to develop disruptive innovations due to the existence of several inhibiting factors. In the
context of Malaysian economy, the success towards achieving the long term economic growth target is highly dependent on the ability of these SMEs’ to innovate and become more competitive. Therefore, this study aims to examine the relationship between business organization and disruptive innovation capability of Malaysian SMEs. Potentially high value creation is anticipated as the
implementation of recommended measures will benefit various industries throughout multiple business markets. The other benefits include improvement in the understanding on the firm’s organizational system, improved organizational efficiency, enrichment in job design through creative and out of the box thinking, developing organizational culture that values continuous learning and innovative environment.