Analyzing the influence of learning orientation and innovativeness on performance of public organizations

Abstract

Purpose – There is growing concern about the performance of public organizations (POs) in developing countries. Despite the fact that the advantages of innovation and learning orientation to organizations have been evidently documented in Western economies and private owned enterprises, there has been little research into these practices and their impact on enhancing competitive advantages in POs in transitional economies such as Iran. The purpose of this paper is to examine the effect of innovation and learning orientation on performance of POs in Iran. Design/methodology/approach – This paper draws on theory from innovation and learning orientation in conjunction with a strategic-centered model to carry out a survey-based study of 127 senior level managers (e.g. CEOs, planning, finance, HR and marketing managers) of POs and/or their cluster companies in six major developed and developing cities of Iran. Findings – The research findings show that learning orientation and innovativeness leads to better PO performance and should be encouraged. More specifically, the results suggest that higher levels of learning orientation and innovativeness led these organizations to higher levels of delivery speed, cost improvement, and quality confidence in firm future PO performance. Research limitations/implications – Data were gathered via a questionnaire administered to senior level managers of some POs and/or their clusters in some cities in Iran. Further research is required to understand the contextual factors that influence internal company culture. For example, there are relatively few women in managerial positions in Iranian companies; and the impact of a restricted business environment appears to vary from service to retail and manufacturing industries. Practical implications – This study is important for managers of public sectors. From empirical evidence, the authors found that PO managers must consider innovativeness and learning as two crucial strategic capabilities for a superior and sustainable performance. Originality/value – The study provides insights into the types of activities that PO management should undertake in order to enhance economic performance.