An Analysis on the Role of Organizational Innovation for Enhancing Firms' Innovation Performance: Focusing on the Manufacturing Industry in South Korea

It is increasingly becoming important for firms to innovate, because technological developments are changing quickly and environmental uncertainties are increasing. A firm needs to achieve innovation to maintain sustainable competitive advantage, unlike other firms. Even though the type of innovations is largely divided into product innovation, process innovation, organizational innovation, and marketing innovation, however, it is lacking to consider causal relationships. Therefore, this study investigates the relationships among four innovations to enhance firms' innovation performance through Korean Innovation Survey (KIS) data of Science and Technology Policy Institute (STEPI). Especially, firms will have to perform organizational innovation before other innovations as it changes their internal routines. The results show that organizational innovation is positively associated with innovation performance (process innovation and marketing innovation), except for product innovation. This study confirms causal relationships among four innovations, and we suggest the importance of organizational innovation. Firms have to consider the role of organizational innovation when they perform innovation activities in the future.