Becoming a Sustainable Organization: Focusing on Process, Administrative Innovation and Human Resource Practices

Abstract

Despite the importance of constant product improvement to becoming a sustainable organization, the relationship between different types of innovation and new product development has received little attention. This article contributes to prior research by proposing a necessary condition for successful product development, which increases organizational sustainability. While it has been widely argued that technological innovation is an important factor for new product development, we contribute by illustrating the importance of process and administrative innovation, which changes an organization’s way of doing business. By analyzing survey responses from 2127 Korean firms, we empirically demonstrate that process and administrative innovation increase the likelihood of achieving new product development goals. Our findings also show that innovation-supporting human resource practices such as talent development programs and work autonomy increase the effectiveness of process and administrative innovations. Overall, we suggest that organizations are able to achieve a sustainable presence in the product market when they constantly innovate the way they run themselves. Additionally, in order to manage such innovation, organizations should nurture a creative environment by devising effective, innovation-supporting human resource practices.