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The study aims to uncover the dynamics of innovation-influencing factors within a developing country context as there is a need for empirical research within a weak national system of innovation. One theory that can enhance our understanding of the analytical power of the dynamics of innovation-influencing factors broadly and deeply, is the Theory of Innovation Management, but this perspective lacks the ability to appreciate the varying effect of influencing factors on innovation activities with evolutionary change, and hence, to predict the future innovation performance. This research fills this gap and investigates the dynamic, complex, and interdependent relationships between an organisation’s past, present, and emergent life, with special reference to innovation-influencing factors at the organisational level. In so doing, the study considers three key research questions, these being: (a) are there specific patterns of dynamics of organisational factors influencing innovation and types of innovation adoption, and if so what are the dynamics of organisational factors that affect the adoption of innovation with the evolutionary change of the organisations? (b) how do the dynamics of organisational factors affect the adoption of innovation? and (c) why do the dynamics of organisational factors affect the adoption of innovation? In addressing these three research questions, first, the existing innovation-related literature was critically reviewed. Secondly, a survey was conducted of 145 software firms to identify the dynamics of innovation-influencing factors. Thirdly, empirical work was undertaken in four software companies in Sri Lanka to build the explanations relating to the effect of organisational dynamics on firms’ innovation activities. And finally, the evidence from the questionnaire survey and the case studies was corroborated to strengthen the findings. The empirical results show that firms move from an informal organisation to a more formal business corporation and adopt different types of innovation at different stages of organisational development. It was found that the adoption of innovation takes the form of product-process and organisational pattern, and that there is harmony between the pattern of innovation adoption and organisational dynamics. This study also reveals the varying effect of organisation-specific factors on innovation at different stages as these factors remain within the organisation as residual, dominant, and emergent forms at a certain point in time. |
