Impact Of Innovation Capability On Innovation Performance In Russian Telecommunication Industry

Innovation is a key element in economic growth,technological progress,and sustainability;it is at the centre of industry,academia,government,and society.However,the way in which innovation is managed and achieved has notably changed during the previous years.More than ever organisations are using more collaborative approaches driven by megatrends such as cooperation,globalisation,digitalisation,and sustainability.In particular,firms from mature industries in the manufacturing sector are experiencing radical changes due to increasingly innovative approaches and technologies to produce goods but also services.Basis and richness of any company are people.The person always represented a key and most valuable resource,and in the last decades,especially the accurate tendency was outlined in the countries developed in the market relation still bigger increase in this value.The personnel level of development directly influences competitive possibilities of firm and its strategic advantages.The competitive enterprise seeks to use most effectively possibilities of employees,creating all conditions for the fullest return and intensive development of their potential.To achieve optimum interaction of the person and the organization,and also their relationship with environment performance management allows.Most companies strive to find the perfect portfolio of projects and activities that will drive growth and position in markets.Innovation is crucial to a company's survival and its ability to create a sustainable competitive advantage.The focus of this study is on the impact of innovation capabilities on innovation performance.Innovation capability is about helping big companies and organizations change direction and accelerate when necessary.Business thrive when they are able to engage their customers,and while many companies understand the urge and know that innovation is a powerful tool for growth and future existence,they often lack the knowledge of how to leverage their innovation capability across their company.Key performance indicator's in any methodology ought to have clear and strong connections to the general execution.Understanding the significance of various KPIs in driving these goals is a necessary condition for giving great,noteworthy data at the operational level where corporate strategy is executed.Innovation performance is operationalized using two separate measures: product and service innovation(if the business introduced any new or significantly improved goods or services);process innovation(if the business introduced any new or significantly improved operational processes or methods of manufacturing or producing goods or services).In this research study innovation capability is independent variable while product innovation performance and process innovation performance are dependent variables.Key performance indicator is the moderator between relationship of product innovation performance,process innovation performance and innovation capability.Data collection is the most important part of any research work,questionnaire is used for data collection.Questionnaire items were measured on a five-point Likert-type scale,where five-item scales of innovation capability was adopted by different sources such as Lampikoski and Emden(1999)[10],four-item scale for product innovation performance,and four-item scale for process innovation performance was adopted from Wang and Ahmed(2004)[150],seven-item scale of key performance indicator was developed by Hackett(2011)[90].This research questionnaire divided into four parts: The first one consists of few background information including gender,age,number of full-time employee,education level,experience,organizational size and organizational position.In the second one you assess various elements of innovation capability in your organization.In the third part aims to evaluate key performance indicators.The fourth part aims to assess innovation performance of your organization.The survey was focused on the largest Russian firm in the telecom sectors because they are ones where innovation is anticipated to be most obvious.From a policy point of view,innovation activities in telecom industry form a platform for economic development.Telecom industry also provide useful and available measures of internal innovation at the firm level(Hitt,Hoskisson,Johnson and Moesel,1996)[87].In addition,telecom sector represents a significant inter-sector difference in characteristics of telecom development,technology intensity,innovation and performance.There are three primarily reasons that make the company suitable to be selected in this research:(1)Rostelecom is a most development company in the Russian Federation,it is a representative sample.This company is a monopolist in the telecommunications market.Provides the following services to individuals and legal entities: traditional fixed-line voice,mobile,data,TV and value-added services to residential,corporate and governmental subscribers.(2)From 2000 to 2011,Rostelecom was active in acquiring shares in telecommunications companies,as well as in joining interregional companies.Thus,it has strengthened its position in the Russian market of telecommunications,and significantly reduced the number of competing companies.After that,this company is growing rapidly.(3)It becomes important strength in promoting the economy to grow in Russia.The sample for this study was defined narrowly to include a homogeneous set of Rostelecom branches such as macroregional branches and regional branches.We were only interested in the Technical Departments,Commercial Departments and Human Resource Departments.A questionnaire(see the Appendix)was administered to the toplevel managers,middle-level managers and lower-level managers of the Rostelecom company making up the target population of the research.Questionnaires were distributed to 80 selected branches of the Rostelecom.A total of 240 questionnaires were distributed to 80 branches such as macroregional branches and regional branches of the Rostelecom,234 questionnaires were returned from 78 branches showing a response rate of 97,5%.This response rate is healthy,considering the requirement for senior management participation.All surveys that were received met the selection criterion.However,some surveys showed suspicious validity(i.e.,straight lining,non-logical and random answers).A decision was made to delete these surveys of these participants from statistical analysis.Therefore,after discarding the invalid surveys,the overall size dropped from 234 to 180 which is 60 branches of the Rostelecom.After receiving responses from employees of all 3 departments in 60 branches of Rostelecom,a selection of the main issues related to specific variables was conducted for further statistical analysis.The study objective for this research is to see whether innovation capability is moderated by a support key performance indicator has a significant influence on innovation performance(product and process innovations).All study data will be analyzed using SPSS statistical software.Reliability analysis,principal component analysis,correlation analyses and regression analyses will be used to test all hypotheses and to examine the interactions produced by the proposed research model.Survey instruments were subjected to Cronbach's Alpha reliability testing using SPSS to determine the inter-item reliability of the questionnaire.The results of reliability analysis show that three variables represent high score of Cronbach's Alpha value,which is higher than minimum reliability threshold.The KMO measures the testing adequacy(which decides whether the responses given with the sample are sufficient or not)which should be close than 0.5 for a satisfactory factor analysis to proceed.The results show that variables such as innovation capability,key performance indicator and innovation performance represents superb score of KMO value,which is higher than minimum threshold and factor structure is confirmed.Pearson's Correlation Coefficient was used to investigate the strength between innovation capability,key performance indicator and product and process innovation performances.It ranges from-1 to +1.Correlation of-1 depicts that there is perfect negative correlation exists among two variables while +1 shows the perfect positive correlation among two variables.The major findings of correlation analysis in this study proved that the significant relationship exists between innovation capability,key performance indicator and product and process innovation performances.Regression analysis was used to test whether innovation capability is moderated by a support key performance indicator has significant influence on product innovation performance and process innovation performance.The results shown that(1)Innovation capability has significance relationship with product innovation performance.(2)Innovation capability has significance relationship with process innovation performance.(3)Key performance indicator moderates the positive effect between innovation capability and product innovation performance such that a higher level of key performance indicator strengthens the positive relationship between innovation capability and product innovation performance.(4)Key performance indicator moderates the positive effect between innovation capability and process innovation performance such that a higher level of key performance indicator strengthens the positive relationship between innovation capability and process innovation performance.The examination and selection of the main questions of the questionnaire gave us the right to assume that the HR Department has the most competence to answer questions related to key performance indicator,The Commercial Department has the most competence to answer questions related to innovation performance(product innovation performance and process innovation performance)and the Technical Department has the greatest competence to answer questions related to innovation capability.Finally,this paper figured that firms could use the findings to develop and plan the innovation policies,and gave some advices to improve innovation performance.This study concludes that a firm's internal innovation capabilities generally contribute to innovation performance in Russian telecommunication industry.