EVIDENCING ENABLERS OF INNOVATION CAPABILITIES AND THEIR EFFECTS ON ORGANIZATIONAL PERFORMANCE

Abstract

Innovation influences the performance of organizations by building distinctive competencies that result in sources of competitive advantage. For innovation to take place, the organization must posses innovation capability and operate in an enevironment (internal and external) with appropriate enablers which work sufficiently under a sound innovation management system. The main objective of the study was to establish the internal enablers of innovation capabilities and their effects on the organizational performance in the retail industry in Kenya. The specific objectives were; to establish the internal enablers of innovation capabilities at Nakumatt Holdings Limited; and to evaluate the role of the internal enablers of innovation capabilities on organizational performance at Nakumatt Holdings Limited. The study was guided by two theories; Resources Based View and the Capability Based View. The study population was made up of 6,500 employees of Nakumatt Holding Limited. Since all the employees could not be accessed within the study limits, the sampling frame constituted 89 employees stationed at the company’s headquarters in Nairobi. The 89 comprised of 11 senior managers, 16 line managers, 23 supervisors and 39 non-management staff. The study targeted to collect primary information from the entire sample frame using a standardized questionnaire. The data was analyzed using SPSS. Descriptive analysis involved frequencies, percentages and intraclass correlation coefficient (ICC). Regression analysis and correlations were conducted to determine the relationship between the dependent variable and the independent variables of the study. Statistical significance level was used to infer deductions. Findings were presented using tables. The study established that clear strategies; innovative culture; learning environment and exploitation of internal resource base are some of the enablers of innovation capabilities that influence innovation at Nakumatt Holdings Limited. The study further established a positive relationship between the enablers of innovation capabilities and performance of the organization. Favorable environment for learning contributed the most to the positive organizational performance. This was followed by exploitation of internal resources; clear strategies and innovative culture.  The study recommends that managers of innovation capabilities should ensure that their organizations have systems that support exchange of knowledge within and without the organization. Additionally, there is need to exploit the existing internal resources e.g. excess capacity to tap knowledge or innovate. Communication of clear strategies and enshrining of innovative culture would go a long way in ensuring successful innovation.