Organizational Learning and Innovation in High-Tech Small Firms

This paper explores the influence of the processes of learning in organizations on innovation performance in high-tech small firms. After reviewing the literature on learning and innovation, the paper defines the concepts of knowledge management and organizational learning and how they are interlinked. Hypotheses on the link between organizational learning and innovation are presented. An original construct, based on 5 dimensions, is derived to evaluate the degree of organizational learning. The validities (reliability, unidimensionality and convergent validity) of the construct are then assessed using confirmatory factor analysis. Then, the influence on innovation is tested through structural equation modeling (SEM) from a database of 110 US high-tech small firms from different industries. Specifically, the influence on innovation and financial performance are tested. The results show that the presence of organizational learning is related to innovativeness among high-tech small firms. The results are moderated by the age (in years) of companies, the strategic posture and the environment’s threat. The paper discusses ways to improve the innovative performance of learning organizations.