IMPROVISATIONAL CREATIVITY AND INNOVATIVENESS OF SMES: ROLE OF EXPLORATIVE LEARNING STRATEGY

1. IMPROVISATIONAL CREATIVITY AND INNOVATIVENESS OF SMES: ROLE OF EXPLORATIVE LEARNING STRATEGY Naser Valaei1, Yasaman Mahmoudian2 1Universiti Teknologi Malaysia-International Business School (Malaysia) 2Paris Graduate School of Management (Malaysia) 6th International Conference on Education and New Learning Technologies (7th-9th of July, 2014), Barcelona, Spain

2. Introduction • It is evident that the learning capabilities have a critical role in the process of creativity and innovativeness. • Learning can be exploitative and explorative ([5], [6]) referring the boundary (inside or outside of organization/company) of knowledge acquisition. • March [5] developed the organizational learning theory to imply the importance of these learning strategies. • It appears that explorative learning strategy facilitate improvisational creativity and compositional creativity, which consequently adds up the innovation capability of the companies. • The degree of agility of SMEs is gauged through their creativity capabilities that facilitate problem solving in occasions that time matters most (crises situations).

3. Cont. • It is evident that the path of innovativeness is made through the novel and creative ideas. • Most of creativity theories indicate the role of creativity in innovation execution. The antecedent of innovativeness is creativity that can be compositional or improvisational ([1], [2]). • Vera and Crossan [3] considered improvisational creativity as a creative process as long as it has novelty regardless of its successive or failure. The feature of improvisational creativity is shaped by the time factor. • Improvisational creativity takes place when the degree of novelty is high and there is a time constraint as well. But in compositional creativity the degree of novelty is low and there is no time constraint that makes it as a routine in a daily work of employees. • Explorative learning involves absorbing novel knowledge and information outside the current job [6]. It is postulated that external learning has an important role in the process of creativity and innovativeness

4. Literature Review • Exploration refers to “search, variation, risk taking, experimentation, play, flexibility, and discovery”. By virtue of these terms, a definition to explorative learning can be given as the utilization of external knowledge and technologies (from external environment) as an alternative to business. • Sternberg [19] considers the knowledge asset the individuals possess as an enabler of creativity practices. • Koand Butler ([20], [21]) claim that even those unrelated information are important and beneficial in the process of creativity as these disconnected piece of information can be combined with previous knowledge and experience. • According to Rickards et al. [23], the concept of creativity in business is borrowed from the concept of creativity in theory of art and music.

5. Research Framework H1: There is a positive relationship between explorative learning and improvisational creativity of Malaysian SMEs. H2: There is a positive relationship between improvisational creativity and innovative capability of Malaysian SMEs. H3: There is a positive relationship between explorative learning and compositional creativity of Malaysian SMEs. H4: There is a positive relationship between compositional creativity and innovative capability of Malaysian SMEs. H5: There is a positive relationship between improvisational creativity and compositional creativity.

6. Methodology • Population of this research is Malaysian SMEs regardless of their industry sectors. • The unit of study is chief executive officers, managers, other executives, and employees. • Data were collected through a survey questionnaire using a five-level Likert scale. The questionnaire has been designed by Kwiksurveys.comand it was sent to Malaysian SMEs to fill it up. • The sample size of this study is 127 cases from online survey. • For data descriptive analysis and demographic analysis the SPSS software is used. Partial least square (PLS)-structural equation modeling (SEM) technique is used to analyze the whole theoretical framework. SmartPLS software is used to analyze the data for validity and reliability as well as hypothesis testing.

7. Measurement model

8. Validity, Reliability, and R-square

9. Path coefficient

10. Bootstrapping results

11. Bootstrapping table

12. Conclusion • The R-Square value for improvisational creativity showed that 21% of changes in this component is predicted through explorative learning. • Therefore it can be declared that Malaysian SMEs apply explorative learning practices for their improvisational creativity actions. • The R-Square value for innovation implies that 29% of changes in this component can be predicted through compositional creativity and improvisational creativity taking into account the indirect effect of explorative learning. • Hypotheses 1, 2, 4, and 5 were substantiated and it indicates how explorative learning leads to improvisational creativity, compositional creativity, and eventually the innovative capability of Malaysian SMEs. It can be concluded that Malaysian SMEs practice explorative learning strategies for their business purposes and their external knowledge pool are the source of creativity and innovation.