Organizational learning capability and its impact on organizational innovation

Abstract

Purpose This study aims to determine the effect of organizational learning capability (OLC) on organizational innovation (OI) and identify the type of innovation that is accorded more emphasis by Ethiopian manufacturing firms. Design/methodology/approach This study applied an explanatory research design, and cross-sectional data were gathered through structured questionnaires from general and HR managers of 197 manufacturing firms in Addis Ababa and Oromia, Ethiopia. The ordinary least square regression method was applied to analyze the data. Findings The study provides empirical insights into how OLC affects OI. The findings revealed that the sampled firms have scored low mean values in terms of OLC and OI. In addition, OLC had a positive but low effect on OI and its dimensions. Because of their weak institutional support, the sampled firms tended to emphasize administrative innovation rather than product and process innovations. Research limitations/implications This study would have yielded better results if it was built on evidence-based data to reveal how radical or incremental OIs are, as well as how OLC and OI vary across different sectors. The theoretical and practical implications drawn from the findings are also presented. Originality/value There is little empirical evidence of the nexus among OLC, process and administrative innovations, especially from the perspective of developing economies. This study empirically supports the direct relationship between the constructs. In developing countries such as Ethiopia, where there are weak institutional resources and support, administrative innovation shall be emphasized in the short run.