Management Innovation: The Role of Internal, External Factors, and Business Group Affiliation

Abstract

In this study, we investigate the role of internal and external factors in management innovation. Specifically, we consider employee training and employee creativity as internal factors, whilst consultants, government subsidies, and government contracts are external ones. In addition, we investigate whether the impacts of internal and external factors on management innovation are affected by business group affiliation. Based on a sample of Turkish firms drawn from the World Bank Enterprise Survey, the results indicate that while employee training, employee creativity, government subsidies, and government contracts contribute to management innovation, consultants have no effect. Furthermore, the findings show that business group affiliates benefit more from employee creativity and government contracts in management innovation, whereas independent firms utilize government subsidies more in their management innovation activities. This study contributes to our understanding of the antecedents of management innovation and the moderating role of organizational context in an emerging economy.