95

Management Innovation
and Its Measurement
Teresa Kraśnicka1, Wojciech Głód2
and Martyna Wronka-Pośpiech3
Abstract
The aim of this paper is to explain the nature of management innovation, as well as to
propose its measurement instrument. The paper offers a review of key publications on
management innovation published in research journals within the last two decades.
The critical analysis – primarily focused on definitions, the proposed dimensions of
management innovation and the scales used for their measurement – has allowed
for the development of an original tool for measuring management innovation
(MI). Five dimensions of management innovation are proposed, namely, strategic
dimension, structural dimension, employee motivation and development dimension,
interorganisational relations and partnership dimension, and ICT dimension. Using
survey data of 301 employees from different companies in Poland, the validation
of the management innovation measurement instrument was conducted. Internal
consistency analysis (Cronbach’s alpha) and factor analysis, used to test the
statistical reliability of the tool, yielded satisfactory results. The findings of this study
contribute to advancing innovation research, particularly the state of knowledge on
management innovation. Implications for both research and managerial practice are
also presented. The proposed five-dimension management innovation model can
be used to measure the scope of management innovation in further research and
develop the knowledge about links between MI and an organisation’s performance
or its impact on technological innovativeness. In addition this study uncovers a wide
range of information on management innovation issues for interested parties and for
future research.
Keywords: innovation, management innovation, measurement.

1 Teresa Kraśnicka, Associate Professor, Department of Entrepreneurship and Management Innovation, University of
Economics in Katowice, 1-go Maja 50, 40-287 Katowice, e-mail: [email protected].
2 Wojciech Głód, Assistant Professor, Department of Entrepreneurship and Management Innovation, University of
Economics in Katowice, 1-go Maja 50, 40-287 Katowice, e-mail: [email protected].
3 Martyna Wronka-Pośpiech, Assistant Professor, Department of Entrepreneurship and Management Innovation,
University of Economics in Katowice, 1-go Maja 50, 40-287 Katowice, e-mail: [email protected].

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96 / Management Innovation and Its Measurement

INTRODUCTION
Nowadays, it is recognized that the success of an organisation and its survival,
in particular a knowledge-based one, depend on creativity, innovation,
and inventiveness (Martins & Terblanche, 2003). Accordingly, innovation
has become the key goal of many organisations because of its potentially
significant impact on organisational performance (Lee, 2008). This recognition
embraces not only technological innovations, but also non-technological
– organisational, marketing (Oslo Manual, 2005) and, finally, management
innovations (Hamel, 2006). Management innovation is one particular type
of innovation (Damanpour & Aravind, 2011), and refers to the development
and implementation of new managerial practices, processes or structures
(Birkinshaw, Hamel & Mol, 2008). In contrast to technological innovation,
management innovation (MI) affects the “social” rather than the physical
technologies of a firm (Nelson & Sampat, 2001).
Although in recent years a number of publications on management
innovation have been released, the observation made in 2006, that “despite
its importance, management innovation remains poorly managed and poorly
understood”, is still relevant (Birkinshaw & Mol, 2006). One reason may be
scarce scientific research that would not only account for the emergence of
management innovations, but above all confirm their significance for and
impact on technological innovations and a firm’s financial performance.
Research should focus on the role of top management who probably do
not have a direct influence on technological innovations (Elenkov & Manev,
2005), but they contribute to an organisation’s increased innovativeness
through the development of new solutions in management.
Management innovation consists of changing a firm’s organisational
form, practices and processes in a way that is new to the firm and/or industry
and results in leveraging the firm’s technological knowledge base and its
performance in terms of innovation, productivity and competitiveness
(Volberda, Van Den Bosch & Heij, 2013). The issue of conceptualizing and
operationalising management innovation is not concluded.
Therefore, a number of reasons encourage research into MI, in
particular the attempts at its operationalisation and the development of a
measurement tool. This paper aims to fill the gap in the existing innovation
theories by creating a multidimensional approach to innovation in the area
of enterprise management and proposing its dimensions, which will allow for
the development of a management innovation measurement tool. This will
offer an opportunity to study management innovation and its impact on the
performance of enterprises in a transition economy, such as Poland.

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LITERATURE REVIEW

Innovation and innovativeness in an organization

Innovations are perceived to be an important factor affecting an
organisation’s performance and its competitive position as well as a stimulus
to economic growth. As a result, innovation has become a priority not only
for corporate executives, but also for state governments and the European
Union (Mothe & Thi, 2010). The significance of innovation for economic
development was already recognised by Schumpeter. Although he had a
comprehensive understanding of innovation and did not limit it to new
products, for many years attention has been mainly focused on product or
technological innovations, as highlighted by many researchers (Birkinshaw
et al., 2008; Damanpour & Aravind, 2011). This has changed, however, and
now most innovation researchers define innovation as the implementation
of meaningful changes in an organisation, which improve not only products/
services and technological or administrative processes, but also business
procedures, programmes and models, which create new value for an
organisation’s stakeholders (Timmerman, 2009). Relatively recently, other
forms of innovation, often referred to as organisational (Rahimi, Damirchi
& Seyyedi, 2011), non-technological (Mothe & Thi, 2010) or soft innovation
(Sundbo, Gallina, Serin & Davis, 2006), have also been recognised. The
confirmation that the definition of innovation has been expanded can be
found in modern definitions of innovation (Crossan & Apaydin, 2010, Adams,
Bessant & Phelps, 2006) and its numerous typologies (Oslo Manual 2005,
Mayle (ed.), 2006; Sundbo et al., 2006; Wickham, 2006).
Accordingly, innovativeness as a capability to generate, adapt and
implement innovation (Garcia & Calantone, 2002) embraces not only
technological (product and process) innovation, but also non-technological
innovation understood commonly as organisational innovation and,
increasingly more often, innovation in management (Mothe & Thi, 2010).
The definition of innovation in management emphasises its comprehensive
meaning, including management innovation. Moreover, some researchers
argue that the old paradigm of industrial innovation, with technological
innovation at its core, will be replaced by the new paradigm of innovation
research, recognizing the importance of non-technological innovation
(Volberda et al., 2013). Management innovation includes new solutions
implemented in the management process, methods or structure. It is
essentially the manifestation of the innovativeness of top management,
i.e. their ability to generate, adapt and implement new solutions in an
organisation’s management.

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Definitions of management innovation and their role in organizations

Our literature review concerning the interpretation of the management
innovation concepts is based on the three-step approach developed by
Tranfield, Denyer and Smart (2003): planning, execution, and reporting.
Therefore, our methodology is that of a systematic review, the aim of which is
a conceptual consolidation across a fragmented field. It uses systematic data
collection procedures, descriptive and qualitative data analysis techniques,
and theoretically grounded synthesis. Based on the adopted methodology,
we compiled the definitions of management innovation presented in
literature from 1994 in Table 1. It must be stressed, however, that the notion
of management innovation itself and innovation in management under
different terms appeared in literature much earlier. Our literature review
confirms that:
•• MI was studied under different terms (organisational, administrative)
(Damanpour & Aravind, 2011; Meuer, 2013) in the past and continues
to be included in other research areas, e.g. as organisational
innovation (Crossan & Apaydin, 2010);
•• MI definitions according to different authors seem to draw on a
commonly accepted definition from Birkinshaw, Hamel and Mol
(2008); according to these authors, management innovation means
the invention and implementation of a novel management practice,
process, structure, or technique; such innovations should aim to
improve a firm’s performance (Vaccaro, Jansen, Van Den Bosch &
Volberda, 2012; Mothe & Thi, 2010);
•• MIs are meaningfully new solutions, i.e. they have not been
implemented in a particular enterprise; they can be adapted (e.g.
management methods already in use in other organisations) or
developed exclusively to meet the needs of a given organisation;
•• attempts are undertaken to combine the two approaches – one
proposed by Birkinshaw, Hamel and Mol (2008) and the other
developed by the European Commission (Innobarometer, 2009),
included in the third edition of the Oslo Manual (2005); this point
of view is represented by Hecker and Ganter (2013), who argue that
both these conceptions can be considered consistent.

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Table 1. Compilation of chosen definitions of management innovation (pub-

lished 1994-2014)
Type of Source
Original definition of management innovation innova-
tion
Pervasive and embracing process which includes research, Damanpour
OI
development, and implementation of new ideas and behaviours. (1996)
Innovation that leads to new administrative procedures, policies, Gosselin
AI
and organisational structures. (1997)
Embodying the adoption of administrative programs, processes, AI Ravichandran
or techniques new to the adopting organisation. (2000)
New ways to organise business activities such as production or OI Edquist, Hom-
R&D, and innovations that have to do with the organisation of men & McKe-
human resources. lvey (2001)
Multifaceted concept that admits different interpretations MI Lam (2005)
and terms, such as innovation or innovative behaviour in
organisations, new combinations.
The implementation of a new organisational method in the OI Oslo Manual
firm’s business practices, workplace organisation or external (2005)
relations. (...) The distinguishing features of an organisation
innovation compared to other organisational changes in a firm
are the implementation of an organisational method (in business
practices, workplace organisation or external relations) that has
not been used before in the firm and is the result of strategic
decisions taken by management.
Innovations that refer to disembodied technology such as OI Sanidas (2005)
unpatented know-how, property rights, and management and
organisation. They are new, novel organisational entities, which
can be an industry structure, a firm’s structure, a production form
or process, or an institution in general.
Innovation that relates to changes in how managers set MI Hamel (2006)
directions, make decisions, coordinate activities, and motivate
people.
A marked departure from traditional management principles,
processes, and practices or a departure from customary
organisational forms that significantly alters the way the work of
management is performed.
MI refers to an organisation adopting new technologies, new MI Vijande &
ideas and processes to change or implement in a managerial Gonzalez
section such as computer based administrative innovations or (2007)
new employee reward/training schemes.
The generation and implementation of a management practice, MI Birkinshaw et
process, structure, or technique that is new to the state of the art al. (2008)
and is intended to further organisational goals.
Innovations that are related to management activities and are AI Tanninen, Jan-
connected with the organisation’s social system. tunen & Saksa
(2008)

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Type of Source
Original definition of management innovation innova-
tion
New or significantly improved organisational structures (e.g. MI DG Enterprise
knowledge management, workplace organisation or external and Industry
relations). (2009)
Administrative innovations are indirectly related to the basic work AI Crossan &
activity and more directly related to its managerial aspects such Apaydin
as organisational structure, administrative process, and human (2010)
resources.
Implementation of a management practice, process, or structure MI Vaccaro et al.
that is new to the adopting organisation. New practices, (2012)
processes, and structures that change the nature of managerial
work at the firm level.
New approaches to devise a strategy and structure in the MI Walker, Da-
organisation, modify the organisation’s management processes, manpour &
and motivate and reward its employees. Devece (2011)
Innovation that reflects a functionally flexible division of labour. OI Cavagnoli
Within this definition, an example of organisational innovation in (2011)
the workplace is the implementation of activities that increase
employees’ autonomy in decision-making.
MI assumes that key individuals within organisations deliberately MI Vaccaro et al.
introduce new practices, processes, or structures, in order to (2012)
improve the organisation’s performance.
MI refers to innovation in management systems, knowledge MI Kraus, Pohjola
management, and supporting activities. & Koponen
(2012)
Organizational innovation is a new or significantly improved OI Gallego, Ru-
knowledge management system intended to better use or balcaba &
exchange information, knowledge and skills within the enterprise, Hipp (2012)
implement a major change to the organization of work, i.e.
changes in management structure or integrating different
departments or activities, or implement a new or significant
change in relations with other firms or public institutions, i.e.
through alliances, partnerships, outsourcing or subcontracting.
The introduction of new management practices is a form of MI. MI Perello-Marin,
This form of MI implies a change in organisation, and thus a Marin-Garcia
degree of evolution. & Marcos-Cu-
evas (2013)
Change in the firm’s organizational and management practices MI Hecker & Gan-
that marks a significant departure from the status quo – ter (2013)
organisational change that is new (at least to the firm), intended
to further organisational goals, and the result of strategic decision
making.
Key: AI – administrative innovation, MI – management innovation, OI – organisational innovation.

Innovations in the area of management may be one of the key factors

affecting the performance and development of modern organizations,

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operating in a turbulent environment. In the new era of innovation, when,

characteristically, firms co-create new solutions with consumers and
acquire resources from the outside (Prahalad & Krishnan, 2010), innovation
management will become one of the necessary conditions for the survival
of firms or an improvement in their market position, as it shapes a firm’s
innovation orientation (Wood, 2007; Dobni, 2010) and, consequently, allows
for its implementation by developing new structural solutions and designing
organisational processes and human resources management systems (Ahn-
Sook, 2004), as well as looking for resources outside an organisation. We are
convinced that the role of management innovation will gain in importance in
the knowledge-based economy which, in the increasingly difficult conditions
of globalised economies, will require firms to seek entirely new sources of
competitive advantage. This involves an ability to find new business models,
develop networks (also with consumers) or use new communication tools,
which are perceived as an organisation’s new competencies (Kraus et al.,
2012). In a constantly changing environment organisations need to develop
new competencies, such as adaptability, a capability to integrate and
reconfigure internal and external skills and resources, referred to as dynamic
competencies (Eisenhardt & Martin, 2000). Many scholars emphasise that
under global competition management innovation may contribute to building
sustained competitive advantage, as it is more difficult to replicate (Volberda
et al., 2013). In the resource-based view, sustained competitive advantage
stems from valuable, rare, inimitable and non-substitutable resources.

Innovations in the area of management – three trends

The literature review, including the definitions in Table 1, indicates
that management innovation as a new management practice, process,
structure, or technique (Birkinshaw et al., 2008) is not always labelled as
MI. This is confirmed by Damanpour and Aravind (2011), who describe all
three approaches accounting for innovation in the area of management
(organisational innovation, administrative innovation and management
innovation) and they use the term “managerial innovation”.
Originally, the term “organisational innovation” was used mainly by
economists in order to differentiate it from technological innovation, but
it also appeared in the area of management studies (Williamson, 1975;
Chandler, 1962). Chandler (1962), for example, distinguished between new
products and processes from a firm’s new organisational structures. Edquist,
Hommen and McKelvey (2001) defined organisational innovation as new
ways of organizing business activity such as production or R&D, which affect
the coordination of human resources. Organisational innovation defined this
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way embraces, first of all, changes in organisational structures or procedures,

facilitating change and growth of an organisation.
It should also be noted that the methodological findings of OECD
specialists, acknowledged by many researchers (Gallego, Rubalcaba & Hipp,
2012; Hecker & Ganter, 2013; Camison & Villar-Lopez, 2014), played an
important role in defining organizational innovation and understanding its
meaning. The fact that organisational innovation is identified as separate
from technological innovation means that its role is recognized as not only
a response to technological change, but as “a necessary pre-condition for
technological innovation” (Lam, 2004), which to some extent is confirmed by
research results (Camison & Villar-Lopez, 2014).
At the same time, publications featured administrative innovation, which
were set apart from product innovation and technological innovation, related
to changes in products and production systems, implemented in order to
meet the needs and expectations of customers. Administrative innovation
was defined as oriented towards the effectiveness and efficiency of processes
and systems used to manage an organisation (Damanpour & Evan, 1984).
Bantel and Jackson (1989) emphasize that it has a positive effect on how an
organisation operates and a management decision-making process works.
It is only recently that the term “management innovation” has attracted
significant interest amongst scholars. The critical date was probably 2005,
when Birkinshaw, Hamel and Mol (2005) published an article on such
innovations in the Advanced Institute of Management Working Papers.
Hamel classifies management innovation as a departure from traditional
management principles, processes and practices or a departure from
solutions universally used in organisations, which has a considerable effect
on how organisations operate (Hamel, 2006). In other words, management
innovations are changes in how managers work.
The change in the approach to non-technological innovation and the
recognition of the role played by innovation going beyond a wide scope
of technological innovation (product and process innovation, primarily
concerning manufacturing technologies) are clearly illustrated by the
consecutive editions of the Oslo Manual. In the second edition (1997)
organisational and non-technological innovation are already included in
the annex, while the third edition includes marketing and organizational
innovation as a distinct form of innovation in a firm (Oslo Manual, 2005).

Dimensions of management innovation in literature

Working on the operational definition of management innovation we
encounter major difficulties. The most frequently quoted definition,

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proposed by Birkinshaw, Hamel and Mol (2008), can be a good example

of operationalisation, presented by these scholars, who distinguished four
elements (dimensions): management practices, management processes,
organisational structures and techniques, reflecting different aspects of
principles, rules and routines in an organisation. However, they admitted
that the differences between practices, processes, structural aspects and
techniques were neither conceptually nor empirically clear (2008). The
precise definition of these terms (management practices, processes and
methods/techniques) remains a serious challenge. Therefore, studies on
management innovation and the empirical testing of developed models
involve various ways of operationalisation, both in the management
innovation approach (Walker et al., 2011; Birkinshaw et al., 2008) and when
research deals with this type of innovation, but is conducted within a wider
framework of organisational or non-technological innovation (Elenkov
& Manev, 2005; Mothe & Thi, 2010). Selected examples of dimensions of
management innovation and organisational innovation (including innovation
in management) are presented in Table 2.

Table 2. Selected examples of dimensions of innovation in management – the

last 10 years
Author Proposed dimension MI OI EV
Wang & Innovativeness: X Yes
Ahmed – strategic
(2004) – process
– behavioural
– market
– product
Elenkov & – new human resources development programmes X Yes
Manev (2005) – new planning systems
– new control systems
– created organisational units or positions
– new approaches to capital resources allocation
– new management information systems
Birkinshaw et – management practices X No
al. (2008) – processes
– organisational structures
– management techniques
Mothe & Thi – management practices X Yes
(2010) – approaches to production organisation
– external relations
Terziovski – innovation strategy X Yes
(2010) – formal structure
– customer and supplier relationships
– innovation culture
– technological capabilities

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Author Proposed dimension MI OI EV

Walker et al. – IT technologies X Yes
(2011) – administrative dimension, embracing new management
systems and processes
Damanpour Dimension pairs: X No
& Aravind – strategy vs. structure
(2011) – innovations in forms and in procedures
– information technology and administrative dimension
– exploratory vs. exploitative innovations
Vaccaro et al. – management practices (setting new rules and ensuing X Yes
(2012) procedures)
– management processes (changes in routine)
– structures (communication methods, a scope of autonomy
and decision-making competencies)
Hollen, Van – setting objectives X No
Den Bosch – motivating employees
& Volberda – coordination
(2013) – decision making
Hecker & – innovation in the firm’ s workplace organization X Yes
Ganter (2013) – innovation in the firm’s knowledge management
– innovation in the firm’s external relations
Camison & – organizational innovations in business practices X Yes
Villar-Lopez – innovations in workplace organization
(2014) – new organizational methods in external relations
Key: MI – the concept is strictly related to management innovations; OI – the concept clearly embraces
management innovations, which, however, belong to a wider category of organisational innovations; EV
–empirical validation of the model developed by a particular author/team.

The review shows that in the last 10 years the subject has attracted a
lot of interest from scholars, who unanimously indicate the necessity not
only to recognize management innovation as separate from technological
innovation, but also to continue research into this emerging field
(Volberda et al., 2013). This, however, entails a number of problems, such
as a methodological difficulty in reconciling the management innovation
concept with the principles included in the Oslo Manual. Table 2 shows
attempts made by some authors to combine these two approaches (Hecker
& Ganter, 2013). On the other hand, as Volberda, Van Den Bosch and Heij
indicate (2013), most researchers tend to apply four dimensions proposed
by Birkinshaw, Hamel and Mol (2008), while empirical studies are based
on different operationalisations. This is confirmed by our English-language
literature review, which has identified only a few examples of empirical
research into MI. Table 3 shows some examples of management innovation
operationalisation and measurement, which were conducted under the term
“management innovation”.

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Table 3. Operationalisation of management innovation applied in empirical

studies in the last 10 years (2004-2014) – identified research results/cases
Author/s Dimensions of MI Variables were measured using items
Mol & Bir- 1/ the introduc- 1/ implementation of advanced management techniques
kinshaw tion of new mana- within your firm e.g. knowledge management,
(2009) gement practices 2/ implementation of new or significantly changed
organisational structures e.g. diversification,
3/ changing significantly your firm's marketing concepts/
strategies e.g. marketing methods
Walker et al. 1/ information 1/ two statements concerning:
(2011) technology - new information technologies and
2/ administrative - new information systems for management purposes.
procedures 2/ three statements concerning:
- new approaches to planning and budgeting services,
- new approaches to streamlining an organisation (e.g.
reengineering, TQM, quality management),
- new management procedures (e.g. new job descriptions,
new employee teams).
Vaccaro et 1/ management Research tool – six items:
al. (2012) practices 1/ two questions on changes in managers’ activities –
2/ management establishing new principles or procedures;
processes 2/ two questions on the ways to undertake action in an
3/ organisational organisation - changes in principles and work methods
structure (changes in management systems) and the issue of
remunerating employees;
3/ two questions on an organisational structure and the
way in which organisations approach communication and
information flow.
Hollen et al. 1/ setting objec- 1/ new-to-the-firm management activities associated with
(2013) tives setting objectives
2/ motivating 2/ new-to-the-firm management activities associated with
employees; motivating employees
3/ coordinating 3/ new-to-the-firm management activities associated with
activities; and coordinating activities
4/ decision ma- 4/ new-to-the-firm management activities associated with
king. decision making
Hecker 1/ innovation in 1/ new practices concerning the division and coordination
& Ganter the firm’ s work- of labour, structuring activities, and distributing
(2013) place organisation responsibilities and decision making among employees.
2/ innovation in 2/ improvements in internal learning, knowledge sharing,
the firm’s know- and organizational practices evolving from the use of
ledge manage- modern information and communication technology.
ment 3/ new ways to organize collaboration with other firms and
3/ innovation in public institutions
the firm’s external
relations

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METHODS AND RESULTS

Measurement of management innovation – our proposal

The starting point for the development of the management innovation
operationalisation, and its dimensions and measures, may already be
mentioned in a definition of management innovation created by Birkinshaw,
Hamel and Mol (2008). We assume that MI embraces the management
of an entire organisation or its significant areas and its effects go beyond
a particular functional area (they are not restricted to one functional area,
e.g. logistics or finance). Finally, we assert that this type of innovation can
contribute to the increased technological innovativeness of an organisation
and its improved performance (Volberda et al., 2013).
We assumed that management innovation is a multidimensional
construct comprising of five dimensions, the choice of which is based on a
number of modern theories concerning an organisation’s innovativeness
and the identified MI conceptualisations and operationalisations (Table
3). Accordingly, management innovation as a multidimensional construct
comprises:
•• a strategic dimension, which describes new development
and competition strategies, including innovation, in particular
technological (new products/services), new business models, new
innovation sources;
•• a structural dimension, determining a scope for the implementation
of new solutions in an organisational structure, providing flexibility
and adaptiveness to the conditions in which an organisation operates;
new structural forms;
•• employee motivation and development – the dimension concerning
new methods, practices and programmes aimed at boosting
employees’ motivation and developing their skills and competencies
(including their innovative activity);
•• interorganisational relations and partnerships – the dimension
describing the development and use of new forms of cooperation
with different entities in the environment: suppliers, customers/
consumers, competitors, scientific institutions, etc.; the creation of
open innovation models;
•• an ICT dimension, which defines the scope and depth of changes
implemented in the sphere of acquiring, collecting, processing
and transferring information and knowledge; a new intra- and
interorganisational communication tool.
Each dimension indicates the solutions that are new to an organisation
and have not been used in its management so far. Below, the grounds for the
choice of these dimensions are presented in more detail.

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I. Strategic dimension
A number of concepts concerning organisational innovativeness inspired
the choice of the strategic dimension of management innovation and its
operationalisation. Walker, Damanpour and Devece (2011) emphasised
that management innovation was a new approach to the development
of an organisation’s strategy, the design of an organisational structure,
the modification of management processes and employee motivation
and remuneration. The MI strategic dimension draws heavily on the
Organisational Innovativeness Construct, developed by Wang and Ahmed
(2004). The authors distinguish five dimensions of innovativeness: product,
process, market, and behavioural and strategic innovativeness. Their concept
assumes that strategic innovativeness occurs when an organisation carries
out a fundamental reconceptualisation of its core business, which, in turn,
leads to a dramatically different way of operating. Wang and Ahmed (2004)
argue that strategic innovativeness can be linked with the development of
new competition strategies, creating value for an organisation.
The choice of the strategic dimension is also supported by the typology
of management innovation presented by Damanpour and Aravind (2011).
The authors point out that so far no universal typology of managerial
innovation has been adopted and their proposal includes, among others,
strategy and structure innovation (precisely speaking, they present
innovation in an organisation’s strategy vs. innovation in its structure). The
results of studies indicate that radical changes in a structure follow radical
changes in a strategy (but not the reverse). According to Damanpour and
Aravind (2011), the distinction between structural and strategic innovations
may contribute to a better understanding of managerial innovations in an
organisation’s conduct and performance. Dobni (2010), in turn, focuses
on a strong link between a strategy and innovation and points out that,
developing innovation competencies, acquiring innovation-related resources
and incorporating innovation goals into a strategy should be considered
crucial to an organisation’s innovativeness. Innovative organisations
need strategies that are externally oriented – concentrated on clients,
customisation and enhanced quality. The inclusion of the strategic dimension
in management innovation is also partly supported by the theoretical model
of the innovativeness of small and medium enterprises (SMEs) proposed by
Terziovski (2010). His model comprises independent constructs of innovation
strategy, formal structure, customer and supplier relationships, innovation
culture, and technological capabilities, which may affect the performance of
firms (Terziovski, 2010). In his model of innovativeness, an innovation strategy
is an independent variable, a key driver of innovation, positively affecting
a firm’s performance (2010). Akman and Yilmaz (2008) on the other hand,
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define an innovation strategy as a multidimensional construct, comprising,

for example, an organisation’s aggressive attitude towards emerging market
opportunities, a capability to analyze and monitor the environment in
search of opportunities, orientation towards the future, predicting future
opportunities, planning innovation and others.

II. Structural dimension

The literature review reveals that a number of conceptualisations propose
new organisational structures as a dimension of management innovation
(Birkinshaw et al., 2008; Vaccaro et al., 2012; Walker et al., 2011).
Organisational structures as a dimension of management innovation refer
to how they align and harness the efforts of their members (Volberda et al.,
2013). Changes in the organisational structure are perceived as the creation
of new units/departments or positions (Elenkov & Manev, 2005), as the
shifts in the division of tasks and responsibilities (Vaccaro et al., 2012) or
other changes in communication flows or rules and procedures within an
organisation (Vaccaro et al., 2012). On the other hand Hecker and Ganter
(2013) refer to the Oslo Manual methodology for researching management
innovation and they embrace innovations concerning workplace organisation,
defined as new practices involving the division and coordination of work, the
structuralisation of operations, the delegation of responsibilities and decision-
making competencies to employees. In another approach, Hollen, Van Den
Bosch and Volberda (2013) also account for coordinating activities, defining
this dimension of management innovation as new-to-the-firm management
activities associated with coordinating activities.

III. Employee motivation and development dimension

Innovations in organisations predominantly rely on the activity of their
employees, both R&D specialists and other staff. It is commonly viewed that
it is innovative leaders who possess the skills that foster the commitment
of companies and individuals to be innovative and to innovate. Innovative
managers are able to motivate the internal workforce to be innovative and
to discover new products, services, processes or ideas (Cavagnoli, 2011).
The importance of this concept means that many scholars interested in
management innovation research, recognise the necessity to seek new
solutions in the area of employee motivation and development, both in
order to increase the firm’s effectiveness and find new sources of competitive
advantage. In their four-dimensional model of management innovation, Mol
and Birkinshaw (2009) propose that management practices embrace such

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components as setting objectives and associated procedures, arranging tasks

and functions, and developing talent.
In their studies on the contribution of top management to organisational
innovation, Elenkov and Manev (2005) classify new programmes for
human resource development as organisational innovations, whereas
the conceptualisation proposed by Hollen, Van Den Bosch and Volberda
(2013) incorporates four management activities, including new-to-the-firm
management activities associated with motivating employees, which draw on
the concepts developed by Birkinshaw and Goddard (2009) and Birkinshaw
(2010).
Finally, in the conceptualisation proposed by Vaccaro et al. (2012),
the dimension of management processes in management innovation is
measured with two items, which relate to how work is performed and include
changes articulated in routines that govern the work of people as well as how
compensation is set up. This may be illustrated by changes in management
systems or changes in what is expected of people, which outcomes and
behaviour are rewarded and which are not, which relate to the way people
are compensated.

IV. Dimension of interorganisational relations (partnerships)

From the perspective of building the innovativeness of an organisation,
the role and significance of effective forms and types of interorganisational
relations are universally recognised. Birkinshaw, Hamel and Mol (2008)
explicitly conceptualise management innovation as taking place between
interacting organisations; also other scholars identify the organisational-
cooperation mode as a particularly prominent one for non-technological
innovation (Meuer, 2013). It can be assumed that building new, open
innovation models including organisations in a firm’s environment (customers,
suppliers, scientific institutions, etc.) is an important manifestation of MI.
Meuer (2013) argues that four distinct archetypes of inter-firm relations lead
to the implementation of MI.
In his methodology for researching a firm’s innovativeness, Terziovski
(2010) also recognises the dimension of creating new configurations
of interorganisational relations and building new forms of cooperation
between a firm and other entities in its environment. His innovation
constructs (i.e. independent constructs) contain “customer and supplier
relationships” (Terziovski, 2010). Hecker and Ganter, drawing on the Oslo
Manual methodology (2008), suggest that innovations in external relations
with entities in the environment should be operationalised as new ways
of organizing cooperation with other firms and public institutions (Hecker

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& Ganter, 2013; Camison & Villar-Lopez, 2014). The role of different forms
of cooperation between an organisation and other external entities in
the innovation process is also recognised by Lee (2009), who indicates
differences in how advanced the relations existing between an organisation
and its customers, suppliers and other entities are. Finally, the development
of global innovation networks, considered in terms of their structural aspects
and knowledge management, also play a significant role (Horn & Brem, 2012).

V. ICT dimension
Numerous studies confirm the important role of modern information and
communication technologies (ICT) not only in management processes, but also
in speeding up innovation in several sectors and facilitating communication
over long distances, which contributes to transformations in entire industries
and, as a result, advances the globalisation of the world economy (Lundvall
& Nielsen, 2007).
The review of literature on management innovation and its
operationalisations indicate that many scholars and research teams recognise
the IT dimension (Walker et al., 2011; Shieh & Wang, 2005). Elenkov and
Manev (2005) also include this dimension as new management information
systems in their considerations on the influence of top management
(leadership) on organisational innovation (Shieh & Wang, 2005).

The proposal of management innovation measurement and its

empirical validation
Based on the analysis of the management innovation operationalisations (or
organisational innovation), presented in literature, and the research tools
that have been used so far, we developed 17 items broken down into the
five dimensions (Table 4). The assessment of these items should reflect a
level/scope of management innovations, generated and implemented
in a particular enterprise. Accordingly, the following way of measuring
management innovations is proposed:
1) the items describe the scope of meaningful changes/new solutions
implemented in the area of management within the last three years (not
used so far);
2) each item is assessed on a 7-point Likert scale (7 – Strongly agree to 1 –
Strongly disagree).
The validation of the management innovation measurement instrument
was conducted in enterprises based throughout Poland in 2014. In 8 provinces,
a random sample of firms was generated from companies registered in the
Central Statistical Office database. While in terms of 8 provinces the screening

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criterion was the number of registered enterprises, choice of enterprises

was random, nonetheless proportionate. A total of 301 questionnaires were
returned for an overall response rate of 30%. A variety of industries were
represented including manufacturers, trade, services and mixed companies.
Top or middle managers in those enterprises (who expressed their consent to
participate in the survey) received the questionnaire directly from a pollster
and answered it in his/her presence. This is consistent with the approach
suggested by Selltiz, Wrightsman and Cook (1976) and Nunnally (1978) that
the subjects used should be those whom the instrument was intended.
The empirical validation of the measurement tool was in Polish, that is, the
questionnaire was distributed to managers in their native language.
The first stage of the statistical analysis involved testing the reliability of
the tool applied. For this purpose the internal consistency analysis with the
use of Cronbach’s alpha and the exploratory factor analysis was conducted.
Table 4 presents the values of Cronbach’s alpha for five dimensions of
management innovation and for particular items.

Table 4. Cronbach’s alpha for particular items and management innovation

dimension
Cronbach’s
Dimensions
alpha
Strategic dimension
In the last three years in our firm we have implemented significant changes: 0.83
1. in the competition strategy, orienting it towards new markets and/or opening 0.787
new market space
2. in the corporate development strategy so that innovations could be an 0.757
important/main source of competitive advantage
3. in the ways of monitoring the environment in order to seize opportunities for 0.759
developing (and/or adapting) innovations (product, technological, marketing)
4. new management methods/systems facilitating the implementation of 0.830
strategies (e.g. Strategic Score Card, TQM)
Structural dimension 0.87
In the last three years in our firm we have introduced:
5. meaningful/radical changes in principles and procedures 0.818
6. changes in the scope of tasks and responsibilities of our employees and the 0.826
ways of coordinating assignments
7. new organisational solutions in the communication systems in divisions 0.817
(branches, subsidiaries) and between them
8. new forms of organisational structures, new branches/units/positions 0.853
Employee motivation and development dimension 0.79
We have introduced entirely new and considerably modified
9. remuneration systems promoting employee innovative behaviour and 0.733
increased productivity
10. systems/methods for task planning and employee/team performance 0.740
control
11. practices/programmes aiming at human resource development (e.g. 0.677
promotion, training, mentoring, coaching systems)

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Interorganisational relations (partnership) dimension 0.82

In the last three years in our firm we have created
12. unique relations with customers aiming to identify their needs, respond to 0.714
these needs more quickly and retain customer loyalty
13. new forms of cooperation with suppliers in order to streamline operational 0.638
efficiency, develop new technologies, etc.
14. forms of cooperation with our competitors in order to reduce costs of radical 0.702
innovations †
15. new forms of cooperation with experts/consultants, R&D centres, higher 0.751
schools, in order to implement innovations and seek solutions to problems †
ICT dimension 0.77
In the last three years in our firm we have implemented new or heavily
modified
16. IT systems supporting managerial decision-making processes 0.697
17. IT systems and other communication tools or practices in order to 0.743
acquire and collect information and knowledge and disseminate them among
employees (e.g. Intranet, knowledge bases)

The next step involved the exploratory factor analysis, which allows for
the reduction of a large number of variables to a few mutually uncorrelated
factors or principal components. Prior to the factor analysis, the adequacy of
the selected variables was tested with the Kaiser-Meyer-Olkin statistic. The
K-M-O analysis yielded the value of 0.970, allowing the application of the
exploratory factor analysis. Table 5 presents the values of statistics for the
factor analysis.

Table 5. Values of statistics for the factor analysis

Factor/ Variance Cumulative own Variance
Own value
dimension explanation value explanation
1 7.225 48.168 7.225 48.168
2 1.343 8.952 1.343 57.120
3 1.206 8.043 1.206 65.163
4 0.874 5.827 0.874 70.990
5 0.703 4.687 0.703 75.677

In order to determine the number of factors Jolliffe’s criterion was used,

which allowed us to distinguish five factors. This corresponds with the five
dimensions of management innovation assumed in the model. However,
relying on results obtained from factor analysis, we decided to remove two
items (14 and 15) from Dimension 4, due to a lack of consistency shown
within the assumed dimension. Based on the cumulative percentage of
variance explained by the factors we show that the model consisting of the
five constructed dimensions of management innovation accounts for 75.7%
of the total variability in this aspect.

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DISCUSSION AND CONCLUSIONS

The objective of our study was to develop a management innovation
concept taking into account its five dimensions, which could better explain
the nature of this kind of innovation, as so far it has been studied a lot less
than technological innovation. The literature review confirms that the theme
of innovation in management is relatively poorly researched and innovations
of this type are not represented enough in the existing innovation theories/
models. A consistent management innovation concept that would explain
the sources of management innovation, its antecedents and effects, has yet
to be developed. This gap in knowledge is observed by a number of scholars
(Vaccaro et al., 2012; Birkinshaw et al., 2008; Volberda et al., 2013). Another
gap, which we aimed to fill, was the lack of a management innovation
measurement tool. We developed a five-dimensional MI construct, which
was tested for reliability and adequacy. Statistical methods verified its high
reliability measured with Cronbach’s alpha and validated the constructed
dimensions. The tool consists of 15 items, which can be used to measure
management innovation in business enterprises and other organisations (e.g.
public institutions). Our management innovation measurement instrument
is much more complex than those used by others (summarized in the Table
3) and includes those aspects of the MI that have been subject of various
studies, however in dispersion. In our opinion, the proposed instrument is
therefore more accurate and integrates those dimensions of management
innovation, which have been suggested by other researchers, but never
before in such a configuration.
Our study also shows that the classification in the Oslo Manual (2005)
could be expanded to embrace the fifth type of innovation – management
innovation. This would require the re-definition of organisational innovation
(which could, for example, concern new solutions in the area of particular
functions: logistics, marketing, etc.) and management innovation (as new
solutions in the management of an entire organisation). To conclude, further
research into this field can be considered as fully justified.

Limitations
The presented research results have their limitations. The management
innovation measurement scale draws only on the exploratory factor analysis
and the subjective choice of Jolliffe’s criterion as a criterion for factor
analysis. Moreover, the way of measuring MI is based on the subjective
assessment made by top managers (self-reported survey data), who express
their opinion on the implementation of significant/radical changes in their
firm’s management within the last three years. Basically, they have to

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evaluate their own innovative activity, which may be problematic due to a

natural tendency to overestimate our own actions. Another limitation of
our research concerning literature review is a selective choice of papers –
inevitably authors are doomed to make choices, which is always at risk of
missing an important source. The next limitation might be the fact that our
study focuses on the Polish context only, as a lack of studies on this issue
in our country was observed. Since there has been little empirical research
on management innovation practices reported in the extant literature, it is
difficult to know how industry classification or industry size might bias the
results.

Future research
Our research results confirm that the measurement of innovation in general
(Adams et al., 2006), and the measurement of management innovation in
particular, is complex and difficult. However, it is essential in evaluating the
effectiveness of innovation activity. What is more, the presented MI model
and its measurement scale, encourage further research into links between
management innovation and a firm’s performance, technological innovation
or organisational culture, as well as focusing on the moderator effect of some
variables on the culture-innovation relationship. The latter is considered
by researchers to be a particularly important factor influencing the level of
innovativeness in enterprises (Dobni, 2008; Dobni, 2010; Choudhary, 2014).
The management innovation field, in our opinion, should be recognised as
an important factor in stimulating innovativeness in enterprises while they
aim to boost their competitive advantage. We also agree with the opinion
expressed by many researchers that “innovation is an essential condition of
economic progress and a critical element in the competitive struggle of both
enterprises and nation state” (Beaver & Prince, 2002; Brem, 2011).
Obviously, our study should encourage further research into
improvements and modifications of this tool for measuring management
innovation. Generally speaking, future studies should address the above-
mentioned limitations and could include testing on another sample in Poland
(i.e. replication after a given period of time) or testing on the same sample
in different transition economies. The latter is especially important due to
the issue of cultural bias and a generally low level of innovation awareness in
Poland. Indicating future research areas concerning management innovation,
it should be born in mind that management innovation should be analysed
by taking into account its dynamic prospects, offered mainly by complexity
theories (Amagoh, 2008).

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Managerial implications
Our literature review and research results lead to a number of conclusions
useful for managers and business practice. First of all, managers need
to bear in mind the importance of various types of innovation, besides
technological innovation, as well as the necessity to create an adequate
organisational culture, which may play a vital role in advancing organisational
innovativeness. Furthermore, the presented management innovation model
and its measurement scale may be used in order to diagnose the level of
management innovation and to assess its effectiveness, costs and benefits.
The measurement instrument can be used by practitioners – managers in
charge of an enterprise – not only to assess their own innovative activity, but
also to look for new sources of competitive advantage.
In conclusion, it should be emphasized that in the past, issues related
to technological innovation significantly dominated research on innovation
in organisations. Recent changes in global markets and the necessity to seek
new sources of competitive advantage justify paying increased attention to
management innovation. In response to this challenge we made an attempt
at conceptualizing management innovation and developing a scale for
its measurement. The proposed five-dimension management innovation
model can be used to measure the scope of management innovation in
further research and develop the knowledge about links between MI and
an organisation’s performance or its impact on technological innovativeness.
Previous research results regarding these relationships, although promising
(Kraus et al., 2012; Hecker & Ganter, 2013), do not provide a definite answer
concerning relations between variables, which additionally justifies further
studies using the more sophisticated MI measurement proposed by us. It
can also be used as a diagnostic tool to determine the innovativeness of a
firm’s management and compare it with other organisations, for example, in
a given industry.

Acknowledgements
The paper is a result of a research project financed by the National Science
Centre: “The impact of management innovation on technological innovation
and business performance” (Wpływ innowacji zarządczych na innowacyjność
technologiczną i wyniki przedsiębiorstw), NCN nr 2012/07/B/HS4/00314.

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Abstract (in Polish)

Celem artykułu było wyjaśnienie istoty innowacji zarządczych i zaproponowanie na-
rzędzia ich pomiaru. W artykule dokonano przeglądu kluczowych pozycji czasopism
naukowych z ostatnich 20 lat, dotyczących tematyki innowacji zarządczych. Krytycz-
nej ocenie poddano zwłaszcza definicje, proponowane wymiary innowacji zarząd-
czych, oraz stosowane skale ich pomiaru. Na tej podstawie zaproponowano wielowy-
miarowy konstrukt innowacji zarządczych i stworzono autorskie narzędzie służące do
badania/mierzenia innowacji zarządczych. Uwzględniono w nim następujące wymia-
ry: strategiczny, strukturalny, wymiar motywowania i rozwoju pracowników, wymiar
więzi międzyorganizacyjnych oraz wymiar ICT. Narzędzie zostało poddane weryfikacji
statystycznej z wykorzystaniem analizy zgodności wewnętrznej (test alfa Cronba-
cha) oraz analizy czynnikowej – w oparciu o badania przeprowadzone w 301 polskich
przedsiębiorstwach. Uzyskano zadawalające wyniki, pozwalające na podjęcie badań

Innovation in Services or Industry and Entrepreneurial Intention

Anna Ujwary-Gil, Krzysztof Klincewicz (Eds.)

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 Teresa Kraśnicka, Wojciech Głód and Martyna Wronka-Pośpiech / 121

tego typu innowacji. Przeprowadzone studia przyczyniły się do rozwoju wiedzy na

temat natury innowacji zarządczych. Ponadto w artykule przedstawiono konkretne
implikacje teoretyczne i praktyczne, w szczególności podkreślając, że zaproponowany
pięciowymiarowy model innowacji zarządczych może być wykorzystany do pomiaru
natężenia tych innowacji oraz w dalszych badaniach związków pomiędzy innowacja-
mi zarządczymi a wynikami przedsiębiorstw czy ich innowacyjnością technologiczną.
Przeprowadzone badania pozwoliły także na wskazanie dalszych kierunków badań,
dostarczając zainteresowanym tą problematyką bogatej wiedzy o innowacjach za-
rządczych.
Słowa kluczowe: innowacje, innowacje zarządcze, pomiar.

Biographical notes
Teresa Kraśnicka is an Associate Professor in the University of Economics
in Katowice. She is a head of the Department of Entrepreneurship and
Management Innovation. She gained her PhD at the University of Economics
in Katowice. Her current research interests focus on: entrepreneurship,
innovation, and management innovation.
Wojciech Głód holds a Ph.D. in Management from the University of
Economics in Katowice where he currently works as Assistant Professor in
the Department of Entrepreneurship and Management Innovation. His
research interest is entrepreneurship and innovation focusing on the health
care sector.
Martyna Wronka-Pośpiech holds a Ph.D. in Management from the University
of Economics in Katowice where she currently works as Assistant Professor
in the Department of Entrepreneurship and Management Innovation.
Her research is focused on entrepreneurship, innovation and strategic
management in the social and public sectors.

Journal of Entrepreneurship, Management and Innovation (JEMI),

Volume 12, Issue 2, 2016: 95-122

Electronic copy available at: https://ssrn.com/abstract=3105358

Electronic copy available at: https://ssrn.com/abstract=3105358