The Influence of Company Innovation Strategies and
Organizational Culture on Employee Performance
INDRIANI
Bachelor of Business Administration
Telkom University
Jalan Terusan Buah Batu, Bandung 40257
INDONESIA
MAHIR PRADANA
Department of Business Administration
Telkom University
Jalan Terusan Buah Batu, Bandung 40257
INDONESIA
Abstract : - One of the key factors in creating competitive advantage is the company's innovation strategy.
An effective innovation strategy can help companies identify new business opportunities, develop
innovative products or services, and improve employee performance. In the current era of increasingly fierce
competition and globalization, innovation is very important for business success and continuity. Companies
that use a successful innovation approach can gain competitive advantage, improve operational efficiency,
and meet changing market demands. In that context, this thesis aims to examine the influence of company
innovation strategy (X1) and organizational culture (X2) on employee performance (Y) at a family
corporate. This research uses a quantitative method using a questionnaire as a data collection instrument.
Data obtained from 92 employee respondents at a family corporate were analyzed using multiple linear
regression techniques to determine whether a dependent variable is influenced by one or more independent
variables. The research results show that the significance value of the Innovation Strategy variable is 0.037,
which is smaller than the significance level which is generally set at 0.05. This implies a partially significant
influence between Innovation Strategy and Employee Performance. In other words, the Innovation Strategy
variable makes a significant contribution to variations in Employee Performance. These findings provide a
strong basis for concluding that organizations need to pay attention to and strengthen the implementation of
Innovation Strategy as part of a broader management strategy. Therefore, an appropriate approach is needed
in an effort to improve employee performance, so that all PT Rise Jaya employees can understand the
innovation strategy and organizational culture so that they can be even better in the future.
Key-word :Innovation Strategy, Organizational Culture, Employee Performance, Innovative
Received: November 13, 2023. Revised: April 18, 2024. Accepted: May 19, 2024. Published: June 19, 2024.
1. Introduction
The rapid development of the business world and
increasing competition require companies to
continue to innovate in order to maintain
competitive advantage. One of the key factors in
creating competitive advantage is the company's
innovation strategy. An effective innovation
strategy can help companies identify new
business opportunities, develop innovative
products or services, and improve employee
performance. In the current era of increasingly
fierce competition and globalization, innovation
is very important for business success and
continuity. Companies that use a successful
innovation approach can gain competitive
advantage, improve operational efficiency, and
meet changing market demands.
This research analyzes how innovation and
company culture influence the performance of
family corporate employees. This study seeks to
understand how organizational innovation and
business culture affect employee performance.
This research can help companies improve
employee performance by increasing
understanding of the relationship between
company innovation strategy, organizational
culture, and employee performance. This
research is intended to advance knowledge of
management and business administration.
The success of an organization is also
influenced by its employees. Every
organization strives to improve its performance
to achieve its goals. Companies must develop
and improve operations in their environment. A
International Journal of Applied Sciences & Development
DOI: 10.37394/232029.2024.3.8
Indriani, Mahir Pradana
E-ISSN: 2945-0454
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Volume 3, 2024
company uses several methods to boost the
performance of its employees, including by
creating a good company culture and motivating
employees. Saryano and Amboningtyas (2017)
found "organizational commitment has a positive
and significant effect on employee performance.
These results are different from the research
findings of Nongkeng (2012) which emphasized
that "organizational commitment can have an
indirect and insignificant influence on employee
performance."
All businesses and organizations want to have
employees with a high level of performance. The
work environment and organizational culture are
two components that influence employee
performance. The work environment must suit the
needs of employees so that they can do the best of
their work. Nitisemito (2011) states that "the
work environment includes everything that is
around workers and can influence how they carry
out the tasks assigned to them." According to
Suharyanto, Nugraha, and Permana (2014), "the
work environment is the internal and external
conditions that can influence work morale, so that
work can be expected to be completed faster and
better."
The company's innovation strategy includes
innovative policies and organizational structures
as well as an innovation culture that encourages
creativity and collaboration in the workplace. On
the other hand, a strong organizational culture
creates a work environment that supports
employee development, encourages improved
employee performance and increases their
productivity. Therefore, it is important to
understand the influence of innovation strategy
and organizational culture on employee
performance at A family corporate. By
understanding it, companies can find areas that
need to be improved to increase productivity,
work quality and employee satisfaction. This
research may also provide useful insights for
other companies in similar industries about the
importance of strategy and a healthy
organizational culture to achieve competitive
advantage.
2. Literature Review
2.1.Innovation
Strategy Innovation is adoption, according to
Damanpour (1991). These include tools, systems,
rules, products or services, new production
process technologies, new organizational
structures or systems, and new planning
initiatives that the organization accepts. However,
the type of innovation determines adoption and
innovation (Danampaour & Evan (1984),
Damanpour (1991), Damapour 1996, Kim et al.
(1998)). Innovation and product/process
development are key strategic objectives because
companies must improve their skills, knowledge
and capabilities to enter new markets. The main
hope is to improve company performance. In this
research, the importance of innovation strategy on
business performance is an important issue.
Innovation strategy can be measured using the
characteristics of leadership style and the type of
innovation used (Zahra and Das, 1993).
2.2. Organizatinal Culture
According to Ariany (2014), organizational
culture can be defined as the perception that each
member of the organization has. According to
Luthans (2006), "organizational culture consists
of standards and principles that direct how people
in the organization act." In order to be accepted
by their environment, each member will behave
in accordance with their culture. According to
Tika (2008), "organizational culture is the basis
for solving internal and external problems that are
carried out regularly by a group, and then passed
on to new members as the right way to
understand, think about and feel related
problems." Sutrisno (2010) states that
"organizational culture consists of a system of
values, norms (beliefs), assumptions and norms
that have been agreed upon and followed by
members of the organization to direct behavior
and resolve organizational problems.” In a
broader and deeper context, organizational
culture is the basis for creating an ideal work
environment.
2.3. Employee Performance
According to Handoko (2008), "employee
performance is defined as the behavior shown by
employees while carrying out the responsibilities
given by the company." Every company expects
its workers to do good things. They have many
employees, which allows them to make good
contributions to the company. Great employees
also have the potential to improve your business
performance; in other words, the survival of a
company is determined by the performance of its
employees. According to Rivai (2003), "work is
work that is based on motivation and ability to
complete certain tasks or assignments."
Moreover, to satisfy it, one must have a certain
level of desire and energy. Focusing attention on
training levels is a way to improve employee
performance.
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3. Research Methodology
This research uses quantitative methods such as
questionnaires and regression lines for data
analysis. Regression analysis to find out how one
or more independent variables affect the
dependent variable. It can also be used to count
participants in a population. Depending on the
value of the basic variable, the whole thing
happens. 2005 (Ghozali). Quantitative research
on organizational culture and innovation
strategies for A family corporate workers'
working hours. This research identifies worker
bottlenecks and independent variables such as
innovation strategy and organizational culture.
The variables used in research and development
are attributes (Sugiyono, 2008). Research
variables are divided into baseline and intercept
categories. Aryani and Rosinta (2011) define
independent variables as variables that influence
the dependent variable. The variables that are
explained or influenced by bonds are called bond
variables. Indriantoro and Supomo (1999). SPSS
data analysis uses multiple linear regression.
Model regression can be used to find out whether
the independent variables (X1, X2) themselves
have a partial influence on these variables.
Variable attachment. However, the F test aims to
find out whether two variables (X1 and X2)
influence attachment (Y) simultaneously. (2005,
Sujana).
The author uses a Likert scale to match the
variables above. This research also uses
questionnaire and questionnaire data collection
methods. After collecting data, the author applies
classical assumptions (normality,
multicollinearity, heteroscedasticity), validity and
reliability. The results of the analysis show that
strategy and culture influence the performance of
A family corporate employees. This can be used
as a reference for companies to develop strategies
and organizational culture that are more effective
and appropriate for the performance of their
employees.
4. Results and Discussion
This research uses quantitative methods to
analyze the influence of company innovation
strategies and organizational culture on employee
performance. The respondents for this research
were 92 employees of A family corporate and
data collection was carried out through
questionnaires with a Likert scale of 1 to 5. The
independent variables used were innovation
strategy and organizational culture, the dependent
variable was employee performance. The
collected data will then be processed using SPSS
software.
Respondent Characteristics
In this study, the characteristics of respondents
include education level and age. This research
involves 92 employees of family corporate as a
sample.
Table of Respondent Characteristics Based on
Latest Education Level
Level of
education
Amount
Person
Presentation %
SMA/SMK
55
60
Diploma
5
5
Strata/S1
21
23
Strata/S2
11
12
Total
92
100
It is known that respondents in this study provided
an overview of the education level of employees
at A family corporate based on education
categories. Of the total 92 respondents, 60% had
a high school/vocational school educational
background, 5% had a diploma level, 23% had
a bachelor's degree, and 12% had a master's
degree.
Table of Respondent Characteristics Based on
Age
Age
Amount
Person
Presentation %
20-30 Years
12
13
31-40 Years
38
41
41-50 Years
22
24
>50 Years
20
22
Total
92
100
It is known that of the respondents in this study
out of a total of 92 respondents, 13% were in the
20-30 year age range, 41% were in the 31-40
year age range, 24% were in the 41-50 year age
range, and 22% were aged in over 50 years. This
data provides a comprehensive picture of the age
structure within the organization.
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DOI: 10.37394/232029.2024.3.8
E-ISSN: 2945-0454
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Descriptive Statistics Analysis Table
N
Min
Max
Mean
Std.
Deviation
Innovation
Strategy
92
69
105
87.93
7.89083
Organizational
culture
92
4
20
16.19
3.33485
Employee
Performance
92
12
25
20.74
2.84254
Valid N (listwise)
92
From the table, it can be seen that the variable
"Innovation Strategy" reflects the level of
implementation of innovative strategies in
the organization, with a minimum value of
69.00, a maximum value of 105.00, an
average of around 87.93, and a standard
deviation of 7.89. This indicates that there is
significant variation in the innovation
strategies adopted by respondents. The
variable "Organizational Culture" measures
aspects of the culture that develops in the
organization, with a minimum value of 4.00,
a maximum value of 20.00, an average of
around 16.19, and a standard deviation of
3.33. These figures reflect variations in
perceptions of organizational culture among
respondents. And the variable "Employee
Performance" describes the assessment of
employee performance, with a minimum
value of 12.00, a maximum value of 25.00,
an average of around 20.74, and a standard
deviation of 2.84. This data provides
information regarding the extent to which
employees are considered successful in
achieving their goals and tasks.
Normality test
One-Sample Kolmogorov-Smirnov Test
Unstandardized
Residuals
N
90
Normal
Parameters a, b
Mean
.0000000
Std.
Deviation
2.61021986
Most Extreme
Differences
Absolute
,068
Positive
,049
Negative
-.068
Statistical Tests
,068
Asymp. Sig. (2-tailed)
,200 c,d
a. Test distribution is Normal.
b. Calculated from data.
c. Lilliefors Significance Correction.
d. This is a lower bound of the true significance.
Normality test results were carried out using the
Kormogolov-Smirnov test. If the probability
significance level produces a value greater than or
equal to 0.05 then the residual is normally
distributed. If other values are below 0.05 then the
data distribution is not normal. Based on this
table, the significance value is 0.200 which is
greater than 0.05, so based on these results it can
be seen that the data in this study is normally
distributed.
Heteroscedasticity Test
Testing the detection of heteroscedasticity can be
done using the Glejser test, which can be
concluded that heteroscedasticity is not affected if
the probability value is greater than = 5% (0.05).
Multicollinearity Test
Multicollinearity shows that there is a clear linear
relationship between the independent variables
and the regression model information (Gujarati,
2013). This multicollinearity is to determine
whether the correlation of independent variables
in the regression model is successful.
Coefficients a
Model
Unstandardized
Coefficients
Standardized
Coefficients
t
Sig.
B
Std. Error
Beta
1
(Constant)
3,735
1,841
2,03
,046
Innovation
Strategy
-.007
,020
-.038
-.35
,727
Organizational
culture
-.061
,048
-.135
-1,26
.211
a. Dependent Variable: abs
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Coefficients a
Model
Unstandardized
Coefficients
Standardized
Coefficients
t
Sig.
Collinearity
Statistics
B
Std.
Error
Beta
Tolerance
VIF
1
(Constant)
12,608
3,252
3,877
,000
Innovation
Strategy
,035
,036
,096
2,963
,037
,975
1,025
Organizational
culture
,315
,085
,369
3,705
,000
,975
1,025
a. Dependent Variable: Employee Performance
The results of the multicollinearity test
based on the data above show that the
environmental uncertainty variable has a
tolerance of 1 which is greater than 0.10
and a VIF of 1 which is smaller than 10.
Therefore, this model does not show
multicollinearity problems.
Validity test
One way to assess the validity of a
research instrument is to compare the item-
by-item scores with the total score. The
correlation between the item scores and the
overall score was then compared with a
critical r of 0.30. If the correlation between
item scores and the total score is more than
0.30, then the research instrument is valid.
Validity Test Results Table
Variable
Question
Items
R Value
Calculate
R
Value
Table
Testing
Decision
Innovation
Strategy
1
0.363
0.205
r count > r
table
Valid
2
0.247
0.205
r count > r
table
Valid
3
0.839
0.205
r count > r
table
Valid
4
0.596
0.205
r count > r
table
Valid
5
0.546
0.205
r count > r
table
Valid
6
0.73
0.205
r count > r
table
Valid
7
0.599
0.205
r count > r
table
Valid
8
0.71
0.205
r count > r
table
Valid
9
0.516
0.205
r count > r
table
Valid
10
0.577
0.205
r count > r
table
Valid
11
0.238
0.205
r count > r
table
Valid
12
0.631
0.205
r count > r
table
Valid
13
0.388
0.205
r count > r
table
Valid
14
0.462
0.205
r count > r
table
Valid
15
0.268
0.205
r count > r
table
Valid
16
0.47
0.205
r count > r
table
Valid
17
0.245
0.205
r count > r
table
Valid
18
0.3
0.205
r count > r
table
Valid
19
0.547
0.205
r count > r
table
Valid
20
0.512
0.205
r count > r
table
Valid
21
0.424
0.205
r count > r
table
Valid
22
0.289
0.205
r count > r
table
Valid
Organizational
culture
1
0.44
0.205
r count ≤ r
table
Valid
2
0.613
0.205
r count > r
table
Valid
3
0.23
0.205
r count > r
table
Valid
4
0.284
0.205
r count > r
table
Valid
5
0.731
0.205
r count > r
table
Valid
6
0.506
0.205
r count > r
table
Valid
7
0.54
0.205
r count > r
table
Valid
8
0.503
0.205
r count > r
table
Valid
9
0.744
0.205
r count > r
table
Valid
10
0.361
0.205
r count > r
table
Valid
Employee
Performance
1
0.388
0.205
r count > r
table
Valid
2
0.462
0.205
r count > r
table
Valid
3
0.268
0.205
r count > r
table
Valid
4
0.47
0.205
r count > r
table
Valid
5
0.341
0.205
r count > r
table
Valid
Based on this data, it can be seen that the
reliability value of all variables is greater
than 0.6, so It can be concluded that the data
in this study meets reliability standards.
Coefficient of Determination
The data is processed using SPSS, so the
coefficient of determination is a measure of
how much the independent variable is
influenced by the dependent variable, or
how much the dependent variable is
influenced by 100% of the independent
variable, and how much influence the
independent variable has on the dependent
variable.
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Volume 3, 2024
Model Summary b
Model
R
R Square
Adjusted R
Square
Std. Error
of the
Estimate
1
,396 a
,157
.137
2.64005
a. Predictors: (Constant), Organizational Culture,
Innovation Strategy
b. Dependent Variable: Employee Performance
Sumber : Hasil Olahan Penulis (2023)
According to the table based on this data, it can
be seen that the R square value is 0.157. This
shows that the influence of innovation strategy
and organizational culture variables is 15.7% on
employee performance. Meanwhile, the rest is
influenced by other variables not mentioned in
this research.
T Test Results (Partial)
T is a test to determine the partial or individual
influence of the independent variable on the
dependent variable. If the significance level (sig.)
is smaller than the error level ( = 0.05), then the
independent variable is considered to have a
partial influence on the dependent variable. This
is indicated by a partial image or t.
Based on the research conducted, it can be
concluded
1).The sig value of Innovation Strategy (X1) is
0.037 <0.05 so it can be concluded that
Innovation Strategy partially has a significant
effect on Employee Performance.
2) The sig value of Organizational Culture (X2) is
0.037 <0.05 so it can be concluded that
Management Participation partially has a
significant effect on Employee Performance.
F Test Results (Simultaneous)
Use the F test to test the hypothesis that the
compound coefficient of determination R2 of the
population is equal to zero. The significance test
consists of global and partial specific regression.
Using the F statistic, you can rate everyone. This
statistic connects F, k, and (nk-1) (Malhotra,
2006). If Fcount (Sig.) is smaller than =0.05,
then the regression model can be used to analyze
the influence of the independent variable on the
dependent variable.
ANOVA a
Model
Sum of
Squares
df
Mean
Square
F
Sig.
1
Regression
112,743
2
56,372
8,088
.001
b
Residual
606,38
87
6,97
Total
719.122
89
a. Dependent Variable: Employee Performance
b. Predictors: (Constant), Organizational Culture, Innovation
Strategy
Based on these data, the F test value has a
significance value of 0.001 which is smaller than
0.05, so the innovation strategy and
organizational culture variables in this study
simultaneously influence employee performance.
5. Conclusions and
Recommendations
5.1. Conclusion
In this research, by analyzing information-rich
data at A family corporate, it is possible to obtain
important information about the factors that
influence the quality of workers' work. The
results of the analysis show that the innovation
strategy has a significant attenuation of 0.37 and
an influence of 3.5%. Apart from that, Cultural
Organizations have strong returns, ranging from a
T Test value of 0.00 to a return of 31.5%. The
company's innovation strategy and daily
organizational performance are consistently high,
with an F Test value of less than 0.01 and an
influence of less than 15.7%. This summary
Coefficients a
Model
Unstandardized
Coefficients
Standardized
Coefficients
t
Sig.
B
Std.
Error
Beta
1
(Constant)
12,608
3,252
3,877
,000
Innovation
Strategy
,035
,036
,096
2,963
,037
Organizational
culture
,315
,085
,369
3,705
,000
a. Dependent Variable: Employee Performance
International Journal of Applied Sciences & Development
DOI: 10.37394/232029.2024.3.8
E-ISSN: 2945-0454
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Volume 3, 2024
provides comprehensive information regarding
the complex relationship between Innovation
Strategy, Organization Day, and Employee Work
at A family corporate. This can be the basis for
developing more effective and long-term
management strategies.
5. 2. Suggestions
Based on the research results, there are
suggestions put forward, namely that A family
corporate needs to strengthen an organizational
culture that supports innovation in order to
improve employee performance. Strengthening
internal communications, employee engagement
programs, and investing in innovation training are
key steps to maintain a positive culture and
implement innovation strategies throughout the
organization. Employees are also asked to
actively participate in organizational culture and
understand innovation strategies. By fully
engaging in an innovative culture, employees can
make a more meaningful contribution to
organizational performance.
Increasing innovative skills through training and
development is also important so that employees
can respond more effectively to changes and
business challenges. For future researchers, it is
recommended to explore mediating factors and
control variables that might influence the
relationship between organizational culture,
innovation strategy, and employee performance.
Further research could also explore the long-term
impact of implementing an organizational culture
that supports innovation on employee
performance, such as motivation and job
satisfaction, to support the development of more
effective human resource management theory and
practice.
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Contribution of individual authors
to the creation of a scientific article
(ghostwriting policy)
Anisa Moza Sabilla carried out the field survey,
data analysis, and optimization.
Mahir Pradana was responsible for the field
survey.
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scientific article itself
The authors report no source of funding.
Conflict of Interest
The authors have no conflict of interest to declare.
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International Journal of Applied Sciences & Development
DOI: 10.37394/232029.2024.3.8
E-ISSN: 2945-0454
96
Volume 3, 2024