Product Innovation and Process Innovation Effect on Organizational Performance: Organizational Learning Commitment as Mediating Role in Ethiopia Flower Firms

Abstract

Organizations in the world like flower manufacturing firms need product innovation and process innovation to improve their performance by creating new idea, products/services and technologies that enables organization to improve organizational learning commitment and firm performance. Thus, the study aims to access the effect of product and process innovation on performance of firm through mediating role of organizational learning commitment in case of flower manufacturing firms surrounding Batu town, Oromia region, Ethiopia. To achieve this objective quantitative study approach was employed. A descriptive and explanatory design was employed. To obtain correct information the study was employed five likert scale questionnaires and sampled 415 respondents from study area and analyzed the data from 391 (94%) using SPSS V20. The study used structural equation model with factor analysis using exploratory factor analysis and confirmatory factor analysis. The study result revealed that product innovation, process innovation and organizational learning commitment had directly and positively significant effect firm performance. The result of this study showed that process innovation had 0.51 standard deviations even though product innovation had insignificant indirect effect. The study finding showed that organizational learning commitment significantly mediate the relation between process innovation and firm performance but not mediate product innovation and organizational performance.  From this finding the study recommended as firms managers and concerned bodies should give strict attention in firms’ process innovation and product innovation. The study also forwarded to conduct more studies by considering other organization and employing more methodology as future research direction.