EMPLOYEES’ INNOVATION BEHAVIOR

The Role of External Information Awareness and Proactiveness

of Innovation Strategy

Jing Tang, Loo Geok Pee and Junichi Iijima

Department of Industrial Engineering and Management, Tokyo Institute of Technology, Meguro-ku, Tokyo, Japan

Keywords: Employees’ innovation behavior, External information awareness, Proactiveness of innovation strategy,

Theory of planned behaviour.

Abstract: Employees’ innovation behavior (IB), which involves developing, promoting, judging, distributing and

implementing new ideas, is the foundation for knowledge creation and diffusion in organizations. Therefore,

it is important to encourage employees’ IB in knowledge management initiatives. To better understand IB,

this study applies the theory of planned behavior (TPB). Employees’ attitude towards innovation, subjective

norm about innovation, and perceived behavioral control to innovation are expected to influence employees’

IB. In addition, the effects of organizational factors are considered. Specifically, the influence of external in-

formation awareness (EIA) and proactiveness of innovation strategy (PIS) are examined. Results from a

survey of employees in Japanese organizations show that employees’ attitude, subjective norm, and per-

ceived behavioral control not only significantly influence their innovative behavior, they also mediate the

effects of EIA and PIS. This study contributes to research by understanding what individual and organiza-

tional factors influence employees’ IB and extending TPB by considering the effects of EIA and PIS, using

data collected from an understudied yet important context. The findings also suggest that managers should

focus on improving perceived behavioral controls, EIA and PIS to encourage employees’ IB.

1 INTRODUCTION

In this information and knowledge intensive era,

innovation has become an important determinant of

competitive advantage and long-term survival for

companies. As interactivity and complexity of inno-

vation both within and across organizations, it ad-

vances new challenges in exploration and exploita-

tion knowledge, which is one cardinal foundation of

“organizational innovative potential” (Swan et al.,

1999). Growing emphasis on innovation through

knowledge management, innovation behavior (IB)

of knowledge workers, which involves developing,

promoting, judging, distributing, and implementing

new ideas at work, is the primary source for organ-

izational innovation (Jassen, 2004; Scott and Bruce,

1994; Swan et al., 1999). For example, a research of

Turgoose (2000) suggests that the acceptance rate of

ideas suggested by employees positively influences

organizational performance. The process research of

knowledge management and innovation also empha-

sizes the importance of employees’ innovation be-

havior. It suggests that innovation in organizations is

a “relay race” based on successful connection of

individual innovations along continuous stages from

new idea and knowledge initiation to implementa-

tion (De Jong and Den Hartog, 2007; King, 2002;

Swan et al., 1999). Hence, employees’ innovation is

indispensable for organization success and it is im-

portant to understand individual employees’ innova-

tion behavior.

In this study, innovation behavior is defined as

employees’ behavior “directed towards the initiation

and intentional introduction (within a work role,

group or organization) of new and useful ideas,

processes, products, or procedures” (De Jong and

Den Hartog, 2007). In order to encourage employ-

ees’ innovation behavior, prior research has tried to

identify antecedents of employees’ innovation be-

havior. Examples include leadership (De Jong and

Den Hartog, 2007; Scott and Bruce, 1994), work

groups relationship (Scott and Bruce, 1994), multi-

functionality of jobs (Dorenbosch, 2005), organiza-

tional knowledge structure (Ong et al., 2003), and

external work contacts (De Jong and Den Hartog,

2007). These studies provide many advices for man-

Tang J., Pee L. and Iijima J..

EMPLOYEES’ INNOVATION BEHAVIOR - The Role of External Information Awareness and Proactiveness of Innovation Strategy.

DOI: 10.5220/0003629400050017

In Proceedings of the International Conference on Knowledge Management and Information Sharing (KMIS-2011), pages 5-17

ISBN: 978-989-8425-81-2

 2011 SCITEPRESS (Science and Technology Publications, Lda.)

agers, but few studies have focused on the psycho-

logical analysis of employees’ innovation behavior.

A study of Scott and Bruce (1994) suggests that, at

individual level, employees’ innovation behavior is a

primary response to cognitive meaningful and feasi-

ble interpretation of situations, which is more inte-

grative, rather than to the situations per se. So there

is a path model of individual innovation from situ-

ational and personal characteristics to psychological

factors, and to behavior sequentially. Hence, we

consider a structured study of employees’ innovation

behavior’s psychological antecedents is important,

because it helps to improve management efficiency

by focusing on those factors related to the more ef-

fective psychological antecedents of employees’

innovation instead of paying attention to everything.

In this paper, the theory of planned behavior (TPB),

which is a social psychological model, is used to

explain employees’ innovation behaviour. It identi-

fies three antecedents of intention: attitude towards

innovation (ATT), subjective norm about innovation

(SN) and perceived behavioral control to innovation

(PBC). TPB is a well-conceived psychological theo-

retical framework that provides a useful lens for the

intervention of a wide range of behaviors.

The organization provides basic conditional en-

vironment for individual behaviors, so organiza-

tional characteristics have potential influence on

employees’ innovation behavior (De Jong and Den

Hartog, 2007; Krueger Jr, 2007; Scott and Bruce,

1994). In this study, we consider two factors that

have been neglected in prior research: external in-

formation awareness (EIA) and proactiveness of

innovation strategy (PIS). Now, in the highly com-

petitive Internet economy, while lots of innovative

firms have extended their search for new ideas by

involving “the use of a wide range of external actors

and sources to help them achieve and sustain inno-

vation”, openness is becoming a key approach for

innovation (Laursen and Salter, 2006). An open or-

ganization is likely to have high external information

awareness of customer requirements and markets

trends, which could raise employees’ consciousness

of the importance of innovation. On the other hand,

on the basis of resource-based view (RBV), proac-

tive strategy is positive with firm performance when

proactiveness bolsters firms to develop some com-

petitive advantages (Arogon-Correa and Sharma,

2003). As the highly-qualified innovative employee

is treated as one important strategic resourse for

firms in terms of knowledge creation and diffusion

to keep long-term competitive advantage (Lieber-

man, 1988), there is a lack of research considering

the relationship between proactiveness of innovation

strategy and employees’ innovation. We posit that

proactiveness of innovation strategy could prompt

employees to engage in innovation behavior. Overall,

the organizational characteristics of external infor-

mation awareness and proactiveness of innovation

strategy may improve the explanatory power of TPB

for employees’ innovation behavior.

It has been observed that most empirical research

on innovation behavior has been mainly conducted

in western countries such as US (Scott and Bruce,

1994, 1998), Netherlands (De Jong and Den Hartog,

2007; Pieterse et al., 2010) and Spain (Martin et al,

2007). This study addresses the gap by collecting

data from employees in Japanese companies to un-

derstand their innovation behavior. As a leader in the

global market of automobiles and electronics

(Fagerberg, 2005), Japanese companies are among

the most innovative. It is therefore a suitable context

for studying employees’ innovation behavior. In

general, Japanese companies view innovation as a

collaboration of all employees, regardless of organ-

izational levels, rather than a task for limited part of

the organization (Forrester, 2000). It is therefore

interesting to examine what motivates Japanese em-

ployees to engage in innovation behavior.

In sum, the research questions addressed in this

study are:

RQ1: What are the social psychological factors

influencing employees’ innovation behavior?

RQ2: Does organizational external information

awareness and proactiveness of innovation strategy

influence employees’ innovation behavior?

Based on a survey of 127 employees of Japanese

organizations, we found that employees’ attitude,

subjective norm, and perceived behavioral control

are positively related to their innovation behavior as

predicted by TPB. More interestingly, they mediate

the influences of external information awareness and

proactive innovation strategy. This study potentially

contributes to research and practice in several ways.

First, this is the first study to apply TPB to study

employees’ innovation behavior. The findings indi-

cate that the theory is suitable for understanding the

behavior. Second, we examine how the factors in the

TPB mediate the influences of organizational factors

on employees’ innovation behavior. This provides

explanations for how organizational factors influ-

ence employees’ innovation behavior. Together,

these findings offer insights into how innovation

behavior may be promoted in organizations. Third,

this is the first study to examine the innovation be-

havior of employees in Japanese companies, which

is a highly relevant but understudied context.

KMIS 2011 - International Conference on Knowledge Management and Information Sharing

2 CONCEPTUAL BACKGROUND

2.1 Innovation Behavior

In this study, innovation behavior is defined as em-

ployees’ behavior “directed towards the initiation

and intentional introduction (within a work role,

group, or organization) of new and useful ideas,

processes, products, or procedures” (De Jong and

Den Hartog, 2007). Unlike individual creativity,

which focuses on the production of novel and useful

ideas, innovation behavior also includes the produc-

tion or adoption of useful ideas and idea implemen-

tation (Scott and Bruce, 1994). Prior research on

innovation behavior has identified many individual

and organizational antecedents from different per-

spectives, such as proactivity, self-confidence, prob-

lem-solving style, leadership, work group relation-

ship, job autonomy, organizational knowledge struc-

ture, and organizational support (De Jong and Den

Hartog, 2007; Dorenbosch et al., 2005; Ong et al.,

2003; Scott and Bruce, 1994; Unsworth and Parker,

2003).

However, few prior studies have focused on the

psychological antecedents of employees’ innovation

behavior. As behavior is a result of rational decision

of individuals based on the judgment of “perceived”

existence of related preconditions, the associated

psychological process and psychological factors are

important (Ajzen, 1991). So, “perceived” psycho-

logical antecedents are more directly related to inno-

vation behavior rather than other organizational and

environmental factors. It addresses the importance of

social psychological analysis of employees’ innova-

tion behavior. This study proposes a structural psy-

chological model of employees’ innovation behavior,

and considers how psychological behavioral antece-

dents mediate the influence of organizational factors

(i.e., external information awareness and proactive-

ness of innovation strategy) on employee’s IB. TPB

and the organizational factors are described next.

2.2 Theory of Planned Behavior

The theory of planned behavior provides explana-

tions of social and psychological influences on be-

havior (Ajzen, 1991). It is a deliberative processing

model in which individuals make behavioral deci-

sions based on careful consideration of available

information. The theory posits that human behavior

is preceded by intention formation and that intention

is determined by individuals’ attitude, subjective

norm, and perceived behavioral control. Since this

study is cross-sectional, we focus on actual behavior

rather than intention. Attitude is a personal evalua-

tion or interest about performing the target behavior

by an individual. Subjective norm reflects the indi-

vidual’s perception of social influence and pressure

from relevant social constituents such as peers and

superiors about the necessity to perform the target

behavior. Perceived behavioral control reflects the

perceived existence of necessary facilitators (e.g.

time, ability) to successfully perform the target be-

havior. In other words, perceived behavioral control

is an assessment of the ability to overcome possible

obstacles for performing the target behavior (Ajzen,

1991). TPB has been shown to be an effective model

for predicting employee behaviors such as individual

technology adoption (Morris et al., 2005), participa-

tion in learning and training (Wiethoff, 2004), iden-

tification of environment opportunities (Krueger Jr

1998), and support for organization change (Jim-

mieson et al., 2008). For the high predictive power

of TPB, we use TPB to understand employees’ in-

novation behavior in this study.

Some prior studies have examined the effects of

these three antecedents separately. For example,

employees’ attitude is an important predictor for

their creative performance (William, 2004). Percep-

tion of innovation climate, as an important dimen-

sion of perceived behavioral control, is studied in

Scott and Bruce (1994). Perceived opinion of “im-

portant others”, which is similar to subjective norm,

has been examined to be important for nurses’ inno-

vation behavior in Amo’s study of health care indus-

try (2006). This study contributes by examining

these aspects together and comparing their relative

importance to employees’ innovation behavior in an

empirical study. This is the first study to examine

their relative effects.

2.3 External Information Awareness

External information is an important driver of inno-

vation that provides signals of market trend and ex-

tends limited internal innovation capability (Cooper

et al., 1995; Frishammar et al., 2005). In a volatile

environment where customer needs and technology

changes rapidly, organizations need to maintain

strong relationships with their environmental con-

stituents in their innovation endeavour. It has been

emphasized that firms should openly “use external

ideas as well as internal ideas”, especially those

from key customers, suppliers, competitors, research

organizations and market to accelerate innovation.

This approach is named open innovation (Ches-

brough, 2003). These suggest that it is important for

organizations to have strong external information

EMPLOYEES' INNOVATION BEHAVIOR - The Role of External Information Awareness and Proactiveness of

Innovation Strategy

awareness.

External information awareness refers to the ex-

tent to which organizations track best performers,

main competitors and technologies in the industries,

and maintain contact with suppliers, customers, and

the government to gather information from the ex-

ternal environment (Mendelson, 2000; Von Hippel,

1988). In firms with active network to access both

internal and external knowledge and expertise, em-

ployees’ awareness and access of external knowl-

edge and knowledge sharing among employees will

be strengthened also (Cohen and Levinthal, 1990).

Even many scholars certified empirical linkage be-

tween external information awareness and innova-

tion performance on the organizational level (Tambe

et al., 2009), however, few prior studies have con-

sidered the potential influence from external infor-

mation awareness to employees’ innovation behav-

ior for its capability to bolster employees’ external

information and knowledge access. This study pro-

vides new insights by examining how external in-

formation awareness influences innovation behavior

through affecting employees’ attitude, subjective

norm, and perceived behavioral control.

2.4 Proactiveness of Innovation

Strategy

Innovation strategy guides organizations’ innovation

endeavor (Lumpkin, 1996; Saleh, 1993). An impor-

tant aspect of innovation strategy is proactiveness.

Proactiveness “implies taking initiative, aggressively

pursuing ventures, and being at the forefront of ef-

forts to shape the environment in ways that benefit

the firm,” which is opposite with reactiveness

(Knight, 2000). In other words, proactiveness of

innovation strategy refers to the organization’s

quickness to innovate and to introduce new products

or services. According to the resource-based view

(RBV), proactiveness is posited to be positively re-

lated to firm performance when firms some develop

competitive advantages from proactive stratgy,

while a reactive strategy of innovation is considered

to be not effective to keep long-term success in a

dynamic and sophisticated environment (Arogon-

Correa and Sharma, 2003; Souder, 1987).

A proactive innovation firm is likely to be a

leader rather than a follower (Lumpkin, 1996). Slater

(2006) identified four types of innovation strategy:

early market innovator, early adopter, mainstream

market, and conservationist (late majority and slug-

gards). Early market innovators are those organiza-

tions which “appreciate innovation for its own sake”

and continuously focus on discovering new needs of

customers. Early adopters are those that are sensitive

to new market trends and actively “adopt and use

innovation to achieve a revolutionary improvement”.

Organizations in the mainstream market are those

that are sensitive to innovation risks and prefer to

conduct a “mature” innovation that already con-

firmed by the market and with low risk. Conserva-

tionists are those organizations that are highly con-

servative or averse to innovation.

As highly-qualified innovative employees and

tacit innovation processes are considered as hard-to-

imitate strategic resources for firms to get and main-

tain innovation advantages (Lieberman, 1988), the

potential linkage between proactiveness of innova-

tion strategy and employees’ innovation behavior

can deepen our understanding of the positive influ-

ence from proactiveness on firm performance. How-

ever, there has been a lack of research considering

this potential linkage. This research seeks to address

this gap.

3 PROPOSED MODEL AND

HYPOTHESES

Figure 1 shows the proposed model of employees’

innovation behavior. Based on TPB, employee’s

innovation behavior is a function of attitude towards

innovation, subjective norm about innovation, and

perceived behavioral control to innovation. These

three antecedents are expected to mediate the influ-

ence of proactiveness of innovation strategy and

external information awareness on employees’ inno-

vation behavior. Additionally, industry, firm size,

department and job position are included as a control

variable that may influence employees’ innovation

behavior. The hypotheses are explained next.

Attitude

towards

Innovation

Perceived

Behavioral

Control to

Innovation

Subjective

Norm about

Innovation

Employee’s

Innovation

Behavior

External

Information

Awareness

H1b

H1c

H2a

H2b

H2c

H1a

Proactiveness

of Innovation

Strategy

H3a

H3b

H3c

Figure 1: Proposed Model.

KMIS 2011 - International Conference on Knowledge Management and Information Sharing

3.1 The Effects of Attitude, Subjective

Norm, and Perceived Behavioral

Control

According to TPB, attitude, subjective norm, and

perceived behavioral control are positively related to

individuals’ behavior. We expect these relationships

for employees’ innovation behavior as well.

Attitude is a person’s evaluation or interest about

performing the target behavior by an individual,

which is strongly related to the perception of behav-

ior-associated outcomes and “the strength of these

associates” (Ajzen, 2005). Based on the “principle of

compatibility”, employees’ innovation behavior

should be anticipated by their attitude toward inno-

vation (Ajzen, 2005). That is to say, as a general rule,

employees tend to do innovation when they view it

as beneficial or favorable, as it has high possibility

of increasing their job efficiency and reputation in

the workplace. A study of Lee and Wong (2006)

demonstrated the positive relationship between atti-

tudes and performance of R&D scientists and engi-

neers. William (2004) also certified the empirical

link between attitudes toward divergent thinking,

which is “an integral process in creativity”, and em-

ployees’ creation. Meanwhile, in general, innovators

are treated to be with higher attitude toward innova-

tion than non-innovators (Pizam, 1972). So, we posit

that:

Hypothesis 1a: Employees’ attitude toward inno-

vation is positively associated with their innovation

behavior.

Subjective norm reflects an individual’s percep-

tion of social encouragement and pressure from

relevant social referents such as peers and superiors

about the necessity to perform the target behavior

(Ajzen, 2005). When employees’ key social refer-

ents in the workplace seem to all “suggest” them to

conduct innovation behavior, employees are likely to

feel pressured to engage in innovation. For example,

Amobile (1988) considers that leaders’ expectations

are important for employees’ creative work, and

Amo (2006) indicates that the perceived opinion of

“important others” such as managers and colleagues

influence health-care workers’ innovation behavior.

Meanwhile, CEOs’ commitment toward innovation

indicates the importance of innovation in firm’s de-

velopment strategy and customers’ new service or

product requirements and expectations and they

compel employees to innovate continuously. In addi-

tion, from the process view of innovation, the im-

plementation of new innovation ideas demands

heavily on the engagement of these key social refer-

ents (Van de Ven et al., 1989). Accordingly, we hy-

pothesize that:

Hypothesis 1b: Employees’ subjective norm

about innovation is positively associated to their

innovation behavior.

Perceived behavioral control reflects the per-

ceived existence or absence of necessary facilitators

(e.g. time, ability) to successfully perform the target

behavior (Ajzen, 2005). Facilitators such as oppor-

tunities for innovation, freedom to innovate, and

resources provided by organization are important, as

they provide the basic “physical” preconditions for

employees to carry out innovation. Hence, the exis-

tence of these facilitators is another independent

factor which will be considered when employees

make a rational decision of conducting innovation

behavior. In support, it has been found that percep-

tion of organizational innovation support and re-

source supply, which is an important part of PBC,

has strong positive effects on employees’ innovation

behavior (Scott and Bruce, 1994). Then we postulate

that:

Hypothesis 1c: Employees’ perceived behav-

ioral control to innovation is positively associated

with their innovation behavior.

3.2 The Effects of Organizational

Context

On the basis of Scott and Bruce’s study (1994), at

individual level, employees’ innovation behavior is a

primary response to cognitive meaningful and feasi-

ble interpretation of situations, which is more inte-

grative, rather than to the situations per se, so there

is a path model of individual innovation from situ-

ational and personal characteristics to psychological

factors, and to behavior sequentially. TPB suggest

that many personal, social, and informational back-

ground factors are related to attitude, subjective

norm, and perceived behavior control, and in turn to

behaviors (Ajzen, 2005). Although organizations

provide the basic environment for employees’ be-

havior, there is a lack of empirical studies testing the

effects of organizational factors on employees’ be-

havior (Morries et al., 2005). In this research, we

expect two organizational factors: external informa-

tion awareness and proactiveness of innovation

strategy to be important to employees’ innovation

behavior, and their influences are mediated by atti-

tude, subjective norm, and perceived behavior con-

trol.

EMPLOYEES' INNOVATION BEHAVIOR - The Role of External Information Awareness and Proactiveness of

Innovation Strategy

3.2.1 The Effects of External Information

Awareness

Nowadays, with increased globalization, innovation

requires firms utilize both internal and external in-

novation sources to advance their R&D capability

(Chesbrough, 2003). High external information

awareness means organizations tend to be highly

open to environment to absorb external knowledge

or gain complementary resources. Since these ex-

ternal sources accesses compensate the lack of inter-

nal ability, external information awareness enhances

the employees’ perception of innovation success and

support innovative initiatives, especially for em-

ployees in innovation-adopter firms. Meanwhile,

external information awareness will improve em-

ployees’ perception of innovation necessity. Hence

employees in organizations with strong external in-

formation awareness will develop a positive attitude

towards innovation.

Hypothesis 2a: External information awareness

is positively associated with employees’ attitude

towards innovation.

As external information awareness could also

improve CEO and senior managers’ perceived ne-

cessity to innovate, they will tend to persuade and

require employees to do innovation through assign-

ing more innovation-related tasks and giving more

innovation rewards. At the same time, employees

may also feel more innovative pressure from direct

contact with external stakeholders such as customers.

In addition, the closely cooperation among employ-

ees is always needed in the innovation project corre-

sponding to external customer requirements, so the

innovation pressure from colleagues will be en-

hanced sequentially.

Hypothesis 2b: External information awareness

is positively associated with employees’ subjective

norm about innovation.

External information awareness is associated

with a wider knowledge and technology base to

achieve and sustain innovation. Hence, employees

are likely to get more innovation support and free-

dom. Meanwhile, the external information about

customers, suppliers and competitors is a trigger of

employees’ innovation to provide innovation hints,

and the external resource may extend employees’

research and development capability.

Hypothesis 2c: External information awareness

is positively associated with employees’ perceived

behavioral control to innovation.

3.2.2 The Effects of Proactiveness of Innova-

tion Strategy

Proactiveness of innovation strategy refers to an

organization’s quickness to innovate and the speed

to introduce new products or services according to

new market opportunities (Lumpkin, 1996). Proac-

tiveness of innovation strategy reflects the high pri-

ority of innovation inside organizations. In proactive

organizations, employees’ proactive innovation is

more appreciated than in reactive organizations.

According to the theory of organizational alignment

(Sender, 2007), rewards system should be aligned

with the strategic goals and values, so innovators are

expected to receive more formal or informal organ-

izational rewards. Hence, employees will develop

more positive attitude toward their innovation be-

haviors.

Hypothesis 3a: Proactiveness of innovation

strategy is positively associated with employees’

attitude towards innovation.

Innovation strategy directly reflects administra-

tors’ expectation of employees’ work, and the high-

light of innovation management. Managers in or-

ganizations with proactive innovation strategy are

likely to focus more on continuous generation and

implementation of new ideas actively to react to new

market trends quickly. Consequently, employees are

likely to feel more pressure from social referents to

innovate.

Hypothesis 3b: Proactiveness of innovation

strategy is positively associated with employees’

subjective norm about innovation.

Proactive organizations invest more in R&D and

human capital than reactive ones (Arogon-Correa

and Sharma, 2003), so they are likely to provide

more support (i.e., money, times, and opportunities)

for employees’ innovation. With the aim to innovate

quickly, proactive organizations are likely to give

faster feedback, and implement employees’ idea

bravely.

Hypothesis 3c: Proactiveness of innovation

strategy is positively associated with employees’

perceived behavioral control to innovation.

Additionally, we expect proactiveness of innova-

tion strategy to increase organizations’ external in-

formation awareness. Proactive firms are likely to

actively recognize and catch the value of new prod-

ucts design and marketing opportunity, even with

high potential risks (Lumpkin, 1996). So, continuous

focus of external information is likely to be one of

KMIS 2011 - International Conference on Knowledge Management and Information Sharing

the tactics utilized by top managers (Shoukry, 1993).

Early market innovators and early adopters need a

close communication and cooperation with external

partners such as suppliers, customers, and govern-

ment to capture new market trends. Successful envi-

ronmental information scanning and gathering is a

primary prerequisite for implementing proactive

strategy (Goodman, 1989).

Hypothesis 4: Proactiveness of innovation strat-

egy is positively associated with external informa-

tion awareness.

4 RESEARCH METHOD

4.1 Survey Instrument Development

The proposed model was assessed with data col-

lected in a survey. The questions related to attitude,

subjective norm, perceived behavioral control and

employees’ innovation behavior were adapted from

prior studies applying TPB (Bock et al., 2005;

Fishbein and Ajzen, 1981; Lin and Lee, 2004; Price

and Mueller, 1986; Robinson and Shaver, 1973).

Attitude was assessed with four questions:

“...engaging in innovation behavior is enjoyable”,

“...innovation behavior is valuable”, “...innovation

behavior is beneficial”, and “...innovation behavior

is favorable”. Subjective norm was measured in

terms of perceived innovation encouragement and

pressure from CEOs, supervisors, colleagues, and

customers (e.g., “...receive innovation encourage-

ment and competitive pressure from CEOs/direct

supervisors/colleagues/customers to innovate”).

Perceived behavioral control was assessed in terms

of perceived existence of resources for innovation

(e.g., technology, financial support), opportunities

for innovation, freedom to innovate, and feedback,

such as “there are many opportunities for employees

to innovate in my company” and “employees in my

company are given the freedom to innovate at work”.

Employees’ innovation behavior was measured with

four questions related to frequency of innovation,

time spent on innovation, activeness in innovation,

and participation in innovation projects. Examples

include “…innovate actively” and “…spend signifi-

cant time innovating at work”. Measures for external

information awareness were developed based on

prior studies (Freel, 2000; Kaufmann et al., 2002;

Mendelson, 2000; Souitaris, 2001) and focuses on

the capture and sharing of information about market

trend, government policy, customers, suppliers,

competitors, and strategic partners such as research

and development institutes and consultants. All

items were measured on a five-point Likert scale

anchored by “strongly disagree” (1) and “strongly

agree” (5).

Proactiveness of innovation strategy was meas-

ured by four multiplicative measures. The multipli-

cative measures were based on the forms of proac-

tive innovation strategy identified by Slater (2006):

early market innovator, early adopter, mainstream

market, and conservationist (late majority and slug-

gards). Early market strategy is perceived when

firms continuously consider expressed and latent

customers needs in conducting innovation to create

new market trends (item PIS1). Early adaption strat-

egy is perceived when firms are sensitive to follow

new market trends that created by competitors (item

PIS2). Mainstream strategy is perceived when firms

prefer to capture external market trend, but postpone

implementing innovation until it becomes mature

inside organization (item PIS3). Conservation strat-

egy is perceived when firms develop non-active atti-

tude toward innovation (item PIS4). Among these

designs, early market strategy is the highest level of

proactiveness of innovation strategy, while conser-

vation strategy is the lowest one. These four items

form a Guttman-type scale. Actually, these four

strategies are on a development continuum for firms

to accommodate environment changes. Firms mainly

adopting early market strategy should also relatively

emphasize early adaption strategy in order to timely

alter wrong market expectations. Firms mainly using

early market strategy should also considering early

market strategy and mainstream strategy to capture

high potential first-mover advantages and avoid high

financial risks. Similarly, firms mainly with main-

stream strategy will consider early adoption strategy

and conservation strategy, and firms mainly with

conservation strategy will try mainstream strategy

under some situations.

Four control variables: industry, firm size, de-

partment, and job position were included in this re-

search. Industry was measured as a categorical vari-

able indicated by respondents as either from manu-

facturing or non-manufacturing sectors. Firm size

was measured by the number of employees.

De-

partment was measured as a categorical variable

indicated by respondents as either from IT-related or

non IT-related departments. Job position was meas-

ured by the hierarchical level of respondents from

employee (1) to department head (3).

EMPLOYEES' INNOVATION BEHAVIOR - The Role of External Information Awareness and Proactiveness of

Innovation Strategy

4.2 Data Collection

Table 1: Demographic Profile.

Characteristic Number of

Response

Percentage of

Respondent

Industry Manufacturing 70 55.1%

Finance 4 3.1%

Construction 12 9.4%

Service 8 6.3%

Advertisement 7 5.5%

Distribution 15 11.8%

Energy 4 3.1%

Transportation 7 5.5%

Department Corporate develop-

ment

95 74.8%

Business planning 3 2.4%

Cooperate IT-related 10 7.9%

Business IT-related 1 0.8%

Other 18 14.2%

Job Position Department head 19 15%

Section head 62 48.8%

Employee 41 32.3%

Other 5 3.9%

Number of

Employees

More than 1000 82 64.6%

501 - 1000 20 15.7%

101 - 500 20 15.7%

Less than 100 5 3.9%

Total 127 100%

A survey was conducted in Japan with the support of

the Japanese Innovation Management College in late

2010. The questionnaire was sent to 1,819 employ-

ees listed in the database of NTT DATA Corpora-

tion. We received 127 completed responses and the

response rate is 7 percent. The demographic profile

of the respondents is shown in Table 1. Most of re-

sponses are from large organizations with more than

1000 employees (64.6 percent). Most respondents

work in the manufacturing sector (70 percent).

Among the respondents, 74.8 percent are from the

corporate development department, 48.8 percent are

section heads, and 32.3 percent are non-managerial

staff.

5 DATA ANALYSIS

The Smart PLS (Partial Least Square) version 2.0

and the Bootstrap resampling method with 2000

resamples were used to test the research model by

structure equation modelling (SEM).

5.1 Tests of Measurement Model

All scales show high internal consistency and reli-

ability. The Cronbach’s alpha estimates for attitude,

subjective norm, perceived behavioral control, em-

ployees’ innovation behavior and external informa-

tion awareness shown in Table 2 were all above the

recommend threshold of 0.70 (Hair et al., 2005). In

structural equation modelling (SEM), composite

reliability (CR) is also used to value the reliability of

constructs, and the suggested threshold of it is 0.70

(Chin et al., 1996). In Table 2, all CRs of constructs

are above 0.85. In addition, the loadings of each

item to constructs are also significant at p<0.001.

Convergent validity is assessed by average vari-

ance extracted (AVE) and factor analysis. In Table 2,

all AVEs are above the recommended acceptable

value of 0.50 (Chin et al., 1996). The exploratory

maximum-likelihood factor analysis with Equamax

rotation supports our proposed evaluation of con-

structs (see Appendix). Five corresponding factors

are extracted. Next, an acceptable individual reliabil-

ity of item is shown by the item loadings to their

related constructs being above 0.70. In our study, the

loadings of each item to constructs in the sample are

all above the recommended benchmark of 0.70

(Chin et al., 1996).

The discriminant validity demonstrates the dif-

ference of construct measures in the research model.

Results of comparing square root of AVEs and con-

structs correlation coefficients support the adequate

discriminant validity of our questionnaire. In con-

struct correlation part of Table 2, bold numbers in

the diagonal are the square roots of AVE, while off-

diagonal numbers are Kendall’s tau correlation coef-

ficients among constructs. Kendall’s tau correlation

coefficient is better measure of correlations of ordi-

nal variables, which can be interpreted as same as

Pearson correlation coefficient (Lee et al, 2010). In

Table 2, none of the constructs correlation coeffi-

cients is bigger than the corresponding square roots

of AVE, which means all constructs are more corre-

lated with their own measuring items than with any

other constructs.

A test of multicollinearity was also conducted.

The highest variance inflation factors (VIF) is 2.29,

which is well below the threshold value of 3.3, sug-

gesting that multicollinearity is unlikely to be a

problem for our data (Diamantopoulos and

Winklhofer, 2001).

5.2 Tests of Structural Model

Figure 2 shows the results of the structural model.

One tailed t-test is used to assess the hypotheses. We

found that H1a, H1b, and H1c are strongly sup-

ported at p<0.01. Employees who hold positive atti-

tude towards innovation (β=0.24), perceive pressure

from relevant social referents to carry out innovative

activities (β=0.30), and feel that they have necessary

KMIS 2011 - International Conference on Knowledge Management and Information Sharing

resources or support for innovation (β=0.42), are

likely to engage in more innovation behaviors.

Among the predictors, perceived behavioral control

to innovation has stronger influence on innovation

behavior than the other two factors. None of the con-

trol variables are significant to influence employees’

innovation behaviors. All these factors explained

70% of the variance in employees’ innovation be-

havior.

Furthermore, the influence from external infor-

mation awareness and proactiveness of innovation

strategy to three antecedents: attitude, subjective

norm and perceived behavioral control are all sig-

nificant at p<0.01 (See Figure 2). External informa-

tion awareness and proactiveness of innovation

strategy explain about 30% in employees’ attitude,

subjective norm, and perceived behavioral control.

Hence, H2 (a, b, and c) and H3 (a, b, and c) are also

supported by the data. In firms, which tend to do

proactive innovation as an innovation leader and

focus on external information capturing and sharing

within organizations, employees develop higher

psychological stimulus to do innovation than in the

other. In addition, the coefficient from proactiveness

of innovation strategy to external information

awareness (β=0.23) is also significant at p<0.01

(H4). So firms with proactive innovation strategies

are likely to process high awareness of information

about the external environment.

In addition, to test the mediating role of attitude,

subjective norm, and perceived behavioral control,

we calculated the Sobel mediation test statistic (see

Table 3). Results indicate that they are all significant

at p<0.05. This suggests that psychological factors:

attitude, subjective norm, and perceived behavioral

control, mediate the effects of external information

awareness and proactiveness of innovation strategy

on employees’ innovation behavior.

Table 3: Sobel Test Statistic.

Independent

Variable

Mediator

Attitude

Subjective

Norm

Perceived

Behavioral

Control

External

Information

Awareness

2.08* 2.53** 2.53**

Proactiveness

of Innovation

Strategy

2.74** 3.88*** 3.74***

*p<0.05, **p<0.01, **p<0.001

Table 2: Psychometric Properties of Constructs and Construct Correlations.

Construct

Cronbach’s

Alpha

AVE CR

Construct Correlation

IB ATT SN BC EIA

Employees’ Innovation Behavior (IB) .89 .75 .92

.87

Attitude towards Innovation (A) .92 .81 .94 .54

.90

Subjective Norm about Innovation (SN) .80 .63 .87 .48 .44

.79

Perceived Behavioral Control to Innovation (PBC) .83 .66 .88 .54 .57 .41

.81

External Information Awareness (EIA) .84 .62 .89 .36 .25 .26 .24

.79

Proactiveness of Innovation Strategy (PIS)* - - - .37 .38 .39 .40 .19

* The Cronbach’s alpha, AVE, and CR of PIS is not computed as it is measured with a Guttman scale

Figure 2: Results of Structural Model.

Attitude towards Inno-

vation

=0.28)

Perceived behavioral

control to Innovation

=0.30)

Subjective Norm about

Innovation

=0.30)

Employee’s Innovation

Behavior

=0.70)

External Information

Awareness

=0.053)

H1b: 0.30

(4.53) ***

H1c: 0.42

(4.94) ***

H2a: 0.26

(3.36) ***

H2b: 0.24

(2.91) **

H2c: 0.26

(3.16) ***

H1a: 0.24

(2.69) **

Proactiveness of

Innovation Strategy

H3a: 0.41

(5.49) ***

H3b: 0.43

(6.29) ***

H3c: 0.43

(5.27) ***

Control Variables:

Industry, 0.17 (3.06) **

Firm Size, -0.07 (1.11)

Department, 0.04 (0.82)

Job Position, -0.01 (0.15)

H4: 0.23

(2.86) **

a. t-value in parentheses

b. *p<0.05, **p<0.01, ***p<0.001

EMPLOYEES' INNOVATION BEHAVIOR - The Role of External Information Awareness and Proactiveness of

Innovation Strategy

6 DISCUSSION

6.1 Implications for Research

The results from SEM support all our hypotheses

and help us to answer our two research questions.

Attitudes, subjective norms, and perceived behavior

control are three primary social psychological fac-

tors influencing employees’ innovation behavior.

External information awareness and proactiveness of

innovation strategy, as two important organizational

characteristics, is positive related to employees’ in-

novation behavior through improving three mediat-

ing social psychological factors.

As employees own limited ability to process all

kinds of stimuli around them, they use affective and

cognitive representations of related information to

handle the complexity (Fagerberg, 2005). Although

prior studies have examined employees’ innovation

behavior (De Jong and Den Hartog, 2007, Scott,

1994), and highlighted “intrinsic motivation” as a

critical antecedent (Amabile, 1997; Scott and Bruce,

1994), there are few empirical studies on the psycho-

logical analysis of employees’ innovation. In this

research, we applied the theory of planned behavior

as a basic structure to better understand how to en-

courage employees to innovate by providing empiri-

cal evidence of mediating effects of three psycho-

logical antecedents.

The first contribution of this study is to examine

the power of TPB model in explaining the innova-

tion behavior of employees. While prior research

only focuses on the influence of some psychological

factors, TPB provides a strong theoretical structure

to this study to understand the effects of psychologi-

cal factors to employees’ innovation behavior.

Through comparing path coefficients of the three

psychological antecedents, our results show that

perceived behavioral control to innovation has the

strongest influence on employees’ innovation among

the three antecedents. This supports findings in prior

research (Scott and Bruce, 1994). Therefore, future

studies may examine ways to improve perceived

behavioral control.

The second contribution of this paper is examin-

ing the effects of two organizational factors: external

information awareness and proactiveness of innova-

tion strategy on employees’ innovation behavior. In

empirical studies of TPB, only the individual psy-

chological factors are considered and the potential

influences of other factors, especially organizational

factors, have been neglected. But in practical man-

agement, those organizational factors are likely to be

more controllable by managers than individual fac-

tors. Hence, this study addresses a limitation of prior

research. TPB also suggests that organizational fac-

tors may influence the way that employees perceive

things or actions, and, as a result, affect behavior

(Ajzen, 2005). Similarly, we have shown that the

effects of external information awareness and proac-

tiveness of innovation strategy are mediated through

attitude, subjective norm and perceived behavioral

control. Understanding this mediating relationship is

important because it empirically demonstrates of the

underlying mechanism through which organizational

factors influence employees’ behavior. Our results

also suggest that external information awareness and

proactiveness of innovation strategy are important

triggers for employees’ innovation. This may also

help to explain the importance of external informa-

tion, and the positive relationship between proactive

innovation strategies with firm performance, when

employees’ innovation behavior becomes an impor-

tant strategic resource to gain and maintain competi-

tive advantage.

Third, this study is among the first to collect data

from Japanese companies. Based on its unique con-

tinuous innovation strategy, Japan owns a big mar-

ket share in some industries like automobiles and

electronics (Fagerberg, 2005). Recent studies on

employees’ innovation behavior focusing on the

effect of factors such as job design and leadership

have mainly been conducted in the United States

(Scott and Bruce, 1994, 1998), Netherlands (De

Jong and Den Hartog, 2007; Pieterse et al, 2010) and

Spain (Martin et al, 2007). However, Japan is gener-

ally considered to be culturally different from these

countries in terms of social collectivism, privilege

preference, seniority-based social status, tolerance of

hierarchy and risk aversion (Hofstede, 2004). It is

therefore interesting to examine whether their find-

ings apply to Japan. This study suggests that the

fundings of studies in other countries is possible to

apply to Japan, but the careful reconsideration based

on Japanese culture is also needed.

6.2 Implications for Practice

Our results show that attitude, subjective norm, and

perceived behavioral control are important to predict

employees’ innovation behavior. Among them, per-

ceived behavioral control has stronger effect on em-

ployees’ innovation behavior than the others. Thus,

in order to effectively encourage employees’ innova-

tion behavior, managers may play supporting role

rather than deciding and persuading role to increase

employees’ perceived controllability and self-

efficacy for innovative behavior. Some ways include

KMIS 2011 - International Conference on Knowledge Management and Information Sharing

providing innovation freedom, innovation opportuni-

ties, innovation-related resources, and training to

employees.

This research focuses on two important organiza-

tional factors: external information awareness and

proactiveness of innovation strategy. Our results

suggest managers to improve external information

awareness of their companies, for its positive influ-

ence to employees’ attitude, subjective norm, and

perceived behavioral control. Hence, organizations

should establish strong relationships with external

innovation partners, and share the captured informa-

tion and knowledge within organizations. Existing

knowledge management technology may be helpful

for its capability to capture information from exter-

nal environment and share them within organiza-

tions.

The potential influence of proactiveness of inno-

vation strategy may also be important in practice.

Therefore, organizations should firstly emphasize to

be an innovation leader rather than an innovation

follower, and change to be research-oriented. Then

they also should generate and access a wide range of

new ideas and bravely invest in the quick implemen-

tation of them to capture new opportunities. Al-

though there is a high risk in proactive innovation

strategy, its benefits to increase employees’ innova-

tion behavior also need to be taken into account. As

recent research considers human resources and busi-

ness processes to be unique resources to gain com-

petitive advantages, an innovation leader will be

difficult to be copied and surpassed by an innovation

follower.

6.3 Limitations and Future Research

The findings in this study should be interpreted in

view of its limitations. First, most of the respondents

are from the manufacturing sector. More studies of

other sectors are needed to assess the proposed

model. Second, this study focuses on Japanese com-

panies, so there may be some geographical or cul-

tural specificities and the findings may not general-

ize to other settings. It may be interesting to assess

the proposed model in other countries, especially

those with different culture compared to Japan, like

China, Finland and Australia. Third, only perceptive

measures have been used in our research. Self-

reports may contain some presentational biases

(Gaes et al, 1978). Hence, future research may con-

sider using objective measurement of employees’

innovation behavior. Fourth, there may be other or-

ganizational and environmental factors influencing

employees’ innovation behavior. Examples include

organizational factors like organizational structure,

risk-taking tendency, job and business process orien-

tation, and environmental factors such as environ-

mental dynamism. Future research may consider

studying the effects of these factors to better under-

stand the phenomenon.

7 CONCLUSIONS

The TPB-based psychological analysis of employ-

ees’ innovation behavior deepens our understanding

of employees’ innovation behavior by considering

the effects of two organizational characteristics: ex-

ternal information awareness and proactiveness of

innovation strategy. In this knowledge-intensive

economy, in order to effectively encourage employ-

ees’ innovation, managers need to ensure that neces-

sary organizational resources are available to sup-

port employees. As efficient flow of information and

knowledge within organizations is critical for firms,

our findings about the importance of external infor-

mation awareness suggest that it is an important

characteristic of a innovative organization. At the

same time, managers should consider the benefits of

proactive innovation strategy on employees’ innova-

tion because it creates the necessary condition for

encouraging employees’ innovative behavior.

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APPENDIX

Factor Analysis.

Construct

Items

Components

IB ATT SN PBC EIA

IB1

.54

.39 .25 .45 .19

IB2

.52

.22 .37 .34 .27

IB3

.65

.24 .26 .26 .23

IB4

.68

.21 .16 .39 .11

ATT1 .32

.65

.17 .42 .17

ATT2 .16

.79

.25 .23 .08

ATT3 .26

.71

.27 .30 .11

ATT4 .23

.79

.31 .21 .08

SN1 .05 .14

.82

.24 .16

SN2 .26 .26

.77

.16 .03

SN3 .49 .21

.40

.13 .08

SN4 .40 .21

.39

.01 .17

PBC1 .34 .39 .34

.48

.07

PBC2 .41 .29 .16

.46

.14

PBC3 .07 .20 .23

.82

.12

PBC4 .31 .24 .15

.61

.08

EIA1 .04 .10 .13 .10

.68

EIA2 .13 .09 .04 .07

.89

EIA3 .20 .06 .19 .02

.82

EIA4 .10 .01 .09 .10

.62

EIA5 .15 .22 .07 .25

.46

EMPLOYEES' INNOVATION BEHAVIOR - The Role of External Information Awareness and Proactiveness of

Innovation Strategy