The impact of organizational factors on frugal innovation through effective tacit knowledge management in Turkish companies

Abstract

Introduction/Background: Over the last two decades, the notion of frugal innovation has gained widespread acceptance to address global issues on sustainable development and promote inclusive growth. Having the right skills and knowledge is important to take new actions in creating innovative solutions in companies. Hiding information within a firm may have detrimental consequences, and failing to manage tacit knowledge can be costly and may prevent a company from achieving its goals through innovation. On this respect, transformational leadership is critical, and it enables to provide an environment that encourages the exchange of tacit knowledge to improve corporate performance. It may also have a significant impact on innovation process, the development and implementation of frugal innovation. Research Questions: The study aims to answer the following research questions: Does effective tacit knowledge management have a direct positive impact on frugal innovation? Does effective tacit knowledge management enhance a company’s ability to frugally innovate through effective financial investment decision making? Does transformational leadership have a positive moderating effect on the relationship between tacit knowledge management and financial investment decision making? Does effective tacit knowledge management enhance a company’s ability to frugally innovate through the bricolage capability of a firm? Does transformational leadership have a positive moderating effect on the relationship between tacit knowledge management and bricolage capability? Research Methodology: This study will use knowledge-based view (KBV) theory to explore the direct relationship between tacit knowledge management and frugal innovation, the indirect relationship of financial investment decisions and bricolage capabilities of a firm and whether transformational leadership plays 2 moderating role in this relationship. It will use a moderated parallel mediation model by employing Structured Equation Modelling (SEM). The data is derived from upper-level managers and CEOs of Turkish manufacturing companies through surveys and interviewing. Results: The results are expected to yield positive causal relationship between the variables. Recommendations: Recommendation for further research may include exploring the same relationships for other sectors and other emerging countries.