NATIONAL ECONOMICS UNIVERSITY

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PROJECT
THE INFLUENCE OF ORGANIZATIONAL CULTURE AND
INNOVATION THROUGH VIETNAMESE EMPLOYEE’S
PERSPECTIVE

Students: Trần Hoàng Thành - 11194734

Major: Business Administration
Intake: 61
Class: Management of quality and innovation
Supervisor: Vũ Hoàng Nam, PhD

Ha Noi, 06/2021
 ABSTRACT

Innovation plays a crucial role in organizational culture. Innovation is the process

of developing and improving products, processes, and markets with the goal of increasing

value. Define innovation as the successful implementation of creative ideas within a

company. The goal of this research is to investigate the relatioship between corporate

culture and innovation. It is critical for both innovation and organizational culture

specialist to comprehend the systemic relationship between these concepts and the value

that it may bring in terms of generating and preserving sustainable competitive advantage

for firms. The research model is presented in this article.

Keywords: Organizational culture, innovation.

 1. Introduction

Since the mid-1990s, through the “Doi Moi” policy, Vienam has made a significant

movement from a centrally planned economy to a socialist oriented market economy.

Over that period, the economy has experienced rapid growth. At the present time,

Vietnam is in a period of intergration into the global economy. But the major of all

Vietnamese enterprises are still small and medium enterprises and lack of

competitiveness, especially in this global market. In order to take advantage of chances

and go through challenges in the market in long-term, Vietnam companys need to

concentrate on the root problems, especially innovation. In reality, innovation is central

to build a dynamic and entrepreneurial organization (Johannessen et al., 2001a) that has

become widely relized as a main key to competitive success (Francis & Bessant, 2005).

Furthermore, organizational culture is a component that arises in every internal

corporation in order to improve work performance and create an environment conducive

to creativity. Strong cultures rated higher in new product development and were predicted

to expand more in the future, according to growth projections in stock prices, according

to some experts. On the other side, a well-balanced culture can aid an organization's

ability to innovate. Some researchers have discovered that attributes such as engagement

and adaptability are vital for execution and implementation, which leads to innovation

(Schein, 1989).
In recent years, according to my knowledge, there are a number of researches about

innovation on companies deeply, but in Vietnam, it is very rare. There is a scarcity of

innovation research on specific industries to examine the effects of innovation on firm

performance. As a result, the study's primary goal is to determine the impact of corporate

culture on innovation. More specifically, this study based on Denison’s model and to

analyze influence of organizational culture on innovation through Vietnamese

emplayee’s perspective and suggests some recommendations and implications for

depending on the analysis, academics and practitioners.

2. Literature review.

2.1. Organizational culture.

Organizational culture is a collection of the values, beliefs, and behavior

patterns that define an organization’s essential identity and play a necessary

role in shaping employee behavior (Zabid et al., 2003). In other hands, it refers

to the beliefs, concepts and practices that members of a of a group working in

an organization have acquired, adopted and institutionalized. (Lawson & Shen,

1997). Such a culture gives the members of an organization identity and it

makes a huge contribution to increase group commitment and stabilized their

social system.

Organization culture is a complicated situation; however, it has a significant

 impact on a an organization’s success and renewal. Thus, an organization will

actually face with several issues for example non-integrity of organization,

conflict, and declined performance if it does not take into account its

organizational culture and the dimensions as well as the indicators of it

adequately. Therefore, expertise with organizational culture aids managers in

capturing strengths by comprehending the atmostphere pervading the

organization and taking the appropriate steps to anticipate shortcomings.

Organizational culture encompasses an organization’s expectations,

experiences, philosophy, and values that bind it together, and it manifests itself

in the organizational’s self-image, inner workings, relationships with the

outside word, and future hopeness. It is built on common attitudes, beliefs,

conventions, and written and unwritten regulations that have evolved over time

and are regarded as valid.

There are many different aprroaches to diagnose organizational culture

2.2. Innovation.

Innovation is widely regarded as a important source of competitive advantage

in a rapidly changning enviroment. According to management scholars,

innovation capability is the most crucial determination of firm performance

(Mone et al., 1998). According to Schumperter, innovation manifests in novel

outputs: a new product or a new quality of product; a new method of

production; a new market; a new organizational structure or perhep a new

source of supply, which can be summed as “doing things distinctively”.

Innovation is defined as “ the the deliberate admission and implementation of

ideas, processes, goods, or procedures that are new to the relevant unit of

adoption and are intended to improve the individual, group, organization, or

wider society within a position, group, or organization” (van der Vlist, 1992a).

Another difinition about innovation is as an "An individual or other unit of

adoption perceives a new idea, practice, or item." (Rogers, 1995).

Enhancing management practices, in addition to introducing new and

upgrading existing technology and procedures, is also considered innovation.

(Johannessen et al., 2001b).

Innovation is also regarded as newness, as suggested by (Johannessen et al.,

2001b) in which case did there scholars decude, first of all, newness provides

the begining of implementing innovation concepts is provided by novelty.

Second, when intellectual capital is the end result that inspires creativity and

improves organizational performance, newness can be an indicator of

developing organizational competitive advantages that are sustainable. This

study considers innovation as a process relating to the generation, adoption,

implementation and incorporation of new the organization's ideals, procedures,

or artefacts.(van der Vlist, 1992b).

 Additionally, innovation is also analyzed in two kinds as incremental and

radical following to its degree of novelty. Moverover, radical innovation is

doing something distinctive, incremental innovation is doing what we do but it

is better.

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