Radical or incremental innovation? Insight in innovation choice of manufacturing industry

Loo, Wan Er (2019) Radical or incremental innovation? Insight in innovation choice of manufacturing industry. Project Report. Universiti Teknikal Malaysia Melaka, Melaka, Malaysia. (Submitted)

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Abstract

Innovation is generally known as the key factor for a firm to obtain competitive advantage and improve their performance. However, wrong decision in innovation could lead to failure as well, either keep on exploring (radical innovation) or exploiting (incremental innovation). This study aims to determine the factors influencing the decision on choosing radical or incremental innovation and the impact towards firm’s performance. Cross-sectional explanatory research is used as the approach to investigate the conflict between the two types of innovation, and questionnaire is used for data collection. The result indicated that radical innovation is influenced by organizational culture, while incremental innovation is influenced by knowledge management. Both radical and incremental innovation are significant to firm’s performance, where incremental innovation is relatively more significant, based on regression analysis. The study concluded with limitations and recommendation of future research.

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