Abdul Halim, Hasliza and Ahmad, Noor Hazlina and T. Ramayah, T. Ramayah and Taghizadeh, Seyedeh Khadijeh
(2016)
Capturing The 'Pioneering Minds' Via Human
Capital: The Impact On Innovative
Performance Of Malaysian Smes.
Asian Academy of Management Journal (AAMJ), 21 (1).
pp. 1-22.
ISSN 1394-2603
Abstract
To cultivate “pioneering minds” is extremely important especially in the effort to shift
Malaysia towards innovation-centered economy. The Malaysian government is confdent of
achieving the target provided that the human capital is leveraged in ensuring innovation at
the highest level particularly among Small and Medium Enterprises (SMEs). Nevertheless,
only few studies have considered human capital as a factor that mediates the effects of
other variables on innovation. Therefore, this paper aims at investigating on how human
capital dimensions namely uniqueness, value and pro-activeness will be leveraged by
pro-innovativeness organisational architecture dimensions that is allocation for free time,
work discretion, rewards, and tolerance for risk taking in order to achieve innovative
performance. A structured study instrument was used for data collection purpose. A total
of 1000 active SMEs were selected via simple random sampling from Malaysia Small and
Medium Enterprises Directory 2011/12. A total of 263 SMEs responded to the questionnaire.
However, a total of 262 usable questionnaires were thus secured for analysis. The analysis
was then conducted via Partial Least Squares (PLS) structural equation modeling (SEM).
The results showed several interesting fndings: (a) rewards has an influence on the
uniqueness, value and pro-activeness of human capital; (b) tolerance towards risk taking
has an influence on human capital (uniqueness, value and pro-activeness; (c) uniqueness Hasliza Abdul Halim et al.
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of human capital has an influence on innovative performance and (d) uniqueness of
human capital mediated the relationship between tolerance for risk taking and innovative
performance. The fndings suggest that SMEs should put more focus on the reward system
and tolerance for risk taking in order to encourage and enhance the 'pioneering mind'
which in turn may increase innovative performance of SMEs.
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