By: Azim Harun

By: Azim Harun

Project paper Submitted in Partial Fulfilment of the Requirements for the Degree of Master of Business Administration at the Putra Business School

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It is the means by which the entrepreneur eithercreates new wealth-producing resources or endowsexisting resources with enhanced potential forcreating wealth. (Drucker, 2002)*

Innovation is considered as a determining factor oforganizational growth and superior businessperformances (Gumusluoglu and Ilsev, 2009)**

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*Drucker, P. F. (2002, August) The discipline of innovation. Retrieve from Harvard Business Review:https://hbr.org/2002/08/the-discipline-of-innovation

**Gumusluoglu, L. Ilsev, A. 2009.Transformational leadership, creativity, and organizational innovation,Journal of Business Research , 62: 461–473

As private sector is seen to be more efficient, there hasbeen urges from top leaders globally insisting thatGovernment Agencies should run like businesses(Harvey, 2012)*

Stem from the notion public sector is incapable of suchinnovation because of the absence of competitiveforces, lack of incentives for employees, and excessivered tape (Sahni, Wessel & Christensen, 2013)**

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*Harvey, J.T. (2012, October 5) Why government should not be run like business. Retrieve from Forbes:https://www.forbes.com/sites/johntharvey/2012/10/05/government-vs-business/#267f41c92a54

**Sahni, N.R., Wessel, M. & Christensen, C.M. (2013). Unleashing breakthrough innovation in government.Stanford Soc. Innovation Rev. 11 (3), 27–31.

Innovation has traditionally been studied in theprivate sector. There exist a gap in the literature forInnovation in Public Sector (Bugge & Bloch, 2016)*

Public Sector do not operate in a market frameworkthus not driven but profit-making motives (Bloch &Bugge, 2013)**

*Bugge, M. M. & Bloch C. W. (2016) Between bricolage and breakthroughs—framing the many faces ofpublic sector innovation. Public Money Manage. 36 (4), 281–288

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**Bloch, C. W. & Bugge, M. M. (2013) Public sector innovation – From theory to measurement. StructuralChange and Economic Dynamics. 27, 133 - 145

Private - Penetrate markets (ability) and ProfitMotive (motivation) (Christensen, Anthony & Roth,2004)*

Public Sector does not enter or exit market throughincorporating and declaring bankruptcy. Profit doesnot serve as the primary motivation. (Sahni, Wessel& Christensen, 2013)**

*Christensen C. M., Anthony S.D. & Roth E.A. (2004). Seeing what’s next: Using the theories of innovation to predict industry change. Boston, MA: Harvard Business School Press

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**Sahni, N.R., Wessel, M. & Christensen, C.M. (2013). Unleashing breakthrough innovation in government.Stanford Soc. Innovation Rev. 11 (3), 27–31.

Gap in the literature with regards toinnovation in the public sector.

Inadequate theories particularly in factorsthat contributes towards innovation

Theories that are not generalizable betweenpublic sector and private sector as well ascultural context

understanding of what factors that couldincrease innovation efforts in the civil service

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Innovation implementation among Malaysian civil servants in their working environment;

The validity of the five (5) conditions that promotes innovation as proposed by Sahni et al. (2013) and Dermircioglu & Audretsh (2017) in the civil service with in a Malaysian context;

the cross cultural impact on the five (5) factors for innovation survey and results.

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ABILITY TO EXPERIMENT

ABILITY CHANGE INFRASTUCTURE

FEEDBACK LOOP

INCENTIVES FOR IMPROVEMENTS

BUDGET CONSTRAINTS

Ability

Motivation

INNOVATION IN PUBLIC SECTOR

IV

DV

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*Based on framework suggested by Sahni et al (2013) adopted by Dermircioglu& Audretsh (2017)

Ability to experiment Ability to sunset outdated infrastructure Existence of feedback loops Existence of incentives for product or service

improvement Existence of budget constraints for end users

Sahni, N.R., Wessel, M. & Christensen, C.M. (2013). Unleashing breakthrough innovation in government.Stanford Soc. Innovation Rev. 11 (3), 27–31.

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Hypothesis (i): There is a positive relationship between ability to experiment and innovation in the Malaysian public sector

Hypothesis (ii): There is a positive relationship between giving feedback and innovation in the Malaysian public sector

Hypothesis (iii): There is a positive relationship between incentive for improvement and innovation efforts in the Malaysian public sector;

Hypothesis (iv): There is a positive relationship between

budget allocation and innovation.

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Methodology Adapted method

Research Design Quantitative

Target Respondents1.6 million Malaysian

Civil Servants

Sampling Size 384*

Sampling Techniques Non-probability

Time Horizons Cross Sectional

Data Collection Methods Questionnaire

* Using a Sample size calculator (https://www.surveysystem.com/sscalc.htm), for the populationmentioned above with a confidence level of 95%

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Constructs No. of Items

Innovation 1

Experimentation 3

Responding to Low Performers 3

Feedback 4

Motivation to Improve Performance 3

Budget Constraint 2

Respondent information 5

TOTAL No. OF ITEMS 21

No. Item Group Frequency Percentage

1 Gender Male

Female

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21

32.25

67.75

31 100.00

2 Age 21 – 30

31 – 40

18

13

58.06

41.94

31 100.00

3 Designation 29 – 40

41 – 44

48 – 54

2

19

10

6.45

61.29

32.26

31 100.00

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Pilot Test Descriptive Statistic

ConstructNumber of

Items

Cronbach’s

Alpha

Experimentation 3 0.812

Responding to Low Performers 3 0.877

Feedback 4 0.794

Motivation to Improve Performance 3 0.832

Budget Constraint 2 0.851

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*Internal reliability was established as each construct scored more than 0.70 which is the designated cutoff as suggested by Nunnally (1978)

No.

No. of Respondents 363

Incomplete Response (27)

Outliers (15)

Total 321

15

1%

41%

37%

19%

2%

Age

20 years old andbelow

21 years old - 30years old



19

70

193

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Highest Qualification

PMR/SPM/ STPM orEquivalent

Diploma orequivalent

Bachelor's Degree orequivalent

Post GraduateDegree or equivalent

10%

25%

43%

21%

1%

Designation

Grade 11 - 28

Grade 29 - 40

Grade 41 - 44

Grade 48 - 54

JUSA and Above

Items Mean Std. Deviation Skewness Kurtosis

IN1 4.5296 0.666 -1.546 2.788

EX1 4.5078 0.662 -1.395 2.245

EX2 4.2897 0.680 -1.034 2.001

EX3 4.6604 0.565 -1.547 1.985

LP1 4.3364 0.684 -1.133 2.145

LP2 4.2741 0.671 -1.011 2.132

LP3 4.3364 0.627 -0.704 0.991

FB1 4.4891 0.681 -1.457 2.547

FB2 4.1371 0.693 -0.981 2.028

FB3 4.5296 0.581 -0.790 -0.362

FB4 3.8037 0.751 -0.595 1.087

MO1 4.2710 0.701 -0.979 1.528

MO2 4.2118 0.670 -0.840 1.632

MO3 4.5545 0.611 -1.205 1.209

BC1 4.7290 0.498 -1.629 1.771

BC2 4.7944 0.462 -2.194 4.166

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Descriptive statistics, Skewness and Kurtosis test

According to Kline (2005), the acceptable value for a data is considered as normal when theabsolute value of the score is less than 3 in data skewness test and less than 10 in kurtosis.

ConstructNumber of

Items

Cronbach’s

Alpha

Experimentation 3 0.839

Responding to Low Performers 3 0.924

Feedback 4 0.808

Motivation to Improve Performance 3 0.844

Budget Constraint 2 0.889

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*Internal reliability was established as each construct scored more than 0.70 which is the designated cutoff as suggested by Nunnally (1978)

CRONBACH’S ALPHA SCORES FOR EACH CONSTRUCT

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INNOVATION

• Innovation are intangible• Minimum Innovation in operations• Different perception in defining innovation

Grade Mean

11 - 28 4.21

29 - 40 4.42

41 - 44 4.66

48 - 54 4.57

JUSA and above 5.00

Grade Item 1 Item 2 Item 3 ∑ Mean

11 - 28 4.12 4.00 4.42 4.18

29 - 40 4.43 4.30 4.66 4.46

41 - 44 4.53 4.33 4.64 4.50

48 - 54 4.71 4.31 4.81 4.61

JUSA and above 5.00 4.75 5.00 4.92

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EXPERIMENTATION

• Leading a unit• Experimentation on policy and ideas

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RESPONDING TO LOW PERFORMERS

• Defensive response• Recipient of feedback


11 - 28 4.15 4.06 4.24 4.15

29 - 40 4.30 4.27 4.35 4.31

41 - 44 4.33 4.28 4.36 4.32

48 - 54 4.44 4.34 4.28 4.35

JUSA and above 5.00 5.00 5.00 5.00

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FEEDBACK

• lower grade officers are at the receiving end of either being given recognition or reprima

Grade Item 1 Item 2 Item 3 Item 4 ∑ Mean

11 - 28 4.21 3.94 4.24 3.73 4.03

29 - 40 4.52 4.14 4.54 3.75 4.24

41 - 44 4.48 4.14 4.55 3.79 4.24

48 - 54 4.59 4.19 4.60 3.93 4.33

JUSA and above 4.75 4.75 4.75 4.00 4.56

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MOTIVATION TO IMPROVE PERFORMANCE

• the trend exert certain anomaly


11 - 28 4.06 4.00 4.27 4.11

29 - 40 4.28 4.24 4.58 4.37

41 - 44 4.22 4.15 4.56 4.31

48 - 54 4.44 4.38 4.62 4.48

JUSA and above 4.75 4.75 5.00 4.83

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BUDGET CONSTRAINTS

• Lowest mean score is attained by the highest grade• Top management sees that either there is no reduction in their

agencies budget or the reduction does not affect theimplementation of activities and program

Grade Item 1 Item 2 ∑ Mean

11 - 28 4.58 4.70 4.64

29 - 40 4.63 4.67 4.65

41 - 44 4.82 4.88 4.85

48 - 54 4.74 4.84 4.79

JUSA and above 4.75 4.25 4.50

Harun (2018)Dermircioglu &

Audretsh (2017)

Ability to Experiment 0.144* 0.402**

Responding to Low

Performers0.109

0098**

Providing Feedback 0.141* 0.063*

Motivation to Improve

Performance0.170*

0.170**

Budget Constraints 0.201* 0.012

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Note: * p < 0.05; **p<0.01

There exist a relationship between the independent variable and the dependentvariable of this study as the results shows that the correlation is significant at 0.05except for Responding to Low Performance.

Study is based on a single model Limited number of literature pertaining the

subject matter Convenient sampling Other factors influence on Innovation such

as Leadership

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ABILITY TO EXPERIMENT

FEEDBACK LOOP

INCENTIVES FOR IMPROVEMENTS

BUDGET CONSTRAINTS

Ability

Motivation

INNOVATION IN PUBLIC SECTOR

IV

DV

LE

AD

ER

SH

IP S

TY

LE

S (M

V)

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Research Implications Validates the finding by previous researchers The model transcends cultural context

Practical Implications Promote innovative behaviour

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1. Research Design Quantitative research design

2. Population of the study Malaysia has more than 1.6 milli0n civil servants in the country. The majority

of these civil servants are federal officers which constitute 80% of thepopulation, semi government officer in second at 10% and the remaining10% are officers under states appointment.

3. Sample size Using a Sample size calculator (https://www.surveysystem.com/sscalc.htm),

for the population mentioned above with a confidence level of 95% , therequired number of respondents would be 384 .

Based on the same breakdown 308 will be from the federal government, 38from semi government officers and 38 from state appointed officers.

4. Sampling technique Non-probability sampling (Convenient Sampling)

5. Data collection Survey method. Will be conducted in one month at Government Agencies as well as through

emails and google forms.

6. Measurement scales Nominal Scale (Gender, Service Info ) Ordinal Scale (Age, education level, Rank, Agency Size ) Interval Scale (Main concepts in this study)

7. Pilot testing There will be no pilot testing as the survey questions will adapted from

studies by Sahni et al (2013) and Dermircioglu & Audretsh (2017) –Innovation in Public Sector as well as Semuel, Siangian & Octavia (2016) and Gehani (2013) – Leadership and innovation

8. Statistical Analysis Reliability test Descriptive statistics Multiple regression and Mediating Analysis

Variables Sample Items References

Ability to Experiment

Please rate the following statement based on: “1-Strongly disagree” to “5-Strongly agree”. E.g:1: “I have a choice in deciding how I do my work."2: “Employees are provided with enough time and resources to try new ideas."3: “My workplace provides opportunities to increase knowledge and experience.”

Sahni et al; Dermircioglu & Audretsh (2017)

Feedback Loop Please rate the following statement based on: “1-Strongly disagree” to “5-Strongly agree”. E.g:1: “My supervisor appropriately deals with employees that perform poorly." 2: “My agency deals with underperformance effectively." 3: “I receive adequate feedback on my performance to enable me to deliver required results."4: “My supervisor provides me with regular and constructive feedback."



Incentive for Improvement

Please rate the following statement based on: “1-Strongly disagree” to “5-Strongly agree”. E.g:1: “My agency motivates me to help it achieve its objectives."2: “My agency inspires me to do the best in my job."


Budget Constraint

Do you experience discrimination on the following aspects, Please rate from “1- Not at all” to “5- Very much”. E.g:1: “Overall, over the last five years or more, how has the work at your current classification level changed in relation to your size of budget?"

5 item scale of Hanassab (2006)


Leadership Style

Please rate the following statement based on: “1-Strongly disagree” to “5-Strongly agree”. E.g:1: “I retain the final decision making authority.”2: “My team members and vote whenever a major decision has to be made.”3: “I ask for ideas and input on upcoming plans and projects.”

Den Hartog & Verburg, 1997

Government led initiatives Government Transformation Program National Blue Ocean Strategy Unit Inovasi Khas (UNIK) Agensi Inovasi Malaysia

Malaysia still considered lacking in innovation dueto obsolete policies in the government (OECD,2016)

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Government of Malaysia is the biggest employer inthe country with more than 1.7 million personnel.

If there exist strong leadership at multiple levels ofmanagement that propagate innovation in wouldincrease efficiency and people’s satisfaction towardsthe government.

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Much research focuses on the Philanthropic andNoble intrinsic factors that contributes towardsinnovation in the Public Sector (Sahin et al, 2013;Dermircioglu & Audretsh, 2017; Bugge & Bloch,2013)

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• Based on the self-determination theory perspective and based on Albury (2011) that encouraging experiment would promote innovation.

Ability to Experiment

• Constructive feedback enables intrinsic motivation (Deci, 1971; Harackiewicz, 1979; Ryan and Deci, 2000), increases the need for competence ( Weibel, 2007), which results in higher performance and innovation.

Feedback Loop

• Studies found that organizational members will be more innovative if organizations motivate employees to improve organizational performance by creating motivation to improve performance and establishing trust (Makri et al., 2006, 1061).

Incentives for Improvement

• Resource scarcity is generally considered to impact innovative activity. (Farazmand, 1999; Kettl, 2005; Pollitt, 2010)

Budget Constraint

• Examination of the relation between leadership and innovation is pertinent as leaders positively influence outcomes of innovation processes (Den Hartog & Verburg, 1997; Howell & Avolio, 1993)

Leadership Styles

THANK YOU

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By: Azim Harun

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