Andreja Pirc Barčić

Deconstructing Innovation : An Exploratory Study of the US Furniture Industry

The Merriam-Websters dictionary defines innovation as (1) the introduction of something new or (2) a new idea, method, or device. Many empirical studies suggest that innovation is an important driver for developing or maintaining firm competitiveness. Innovation has been linked to improving products, production processes, supply chain efficiencies, market research, customer retention, business systems, relationships with exchange partners, profitability, and competitiveness. But how does it work? How can innovation be measured? In this study, we examined innovation in the US furniture industry. First, we deconstructed innovation into three broad categories: product, production processes, and company culture. Second, we examined relationships between the innovation subcomponents and the internal/external demographic characteristics of company size, company location population, age of employees, and education level of employees. Results show that although we were able to develop the three innovation constructs, only 25 percent of their hypothesized relationships to demographic factors followed hypothesized patterns of significance or directionality.