The Role of Innovation in Enhancing Technological Capability and Organizational Performance (Case Study: Agricultural Bank of Iran)
Keywords:
Innovation, Technological Capability Enhancement, Performance, Organization, Bank KeshavarziAbstract
This study aimed to examine the impact of innovation on enhancing technological capabilities and improving organizational performance in the Agricultural Bank of Greater Tehran. This applied research employed a descriptive–survey design. The statistical population consisted of 500 senior and head office managers of the Agricultural Bank branches in Tehran. Based on the Morgan table, 217 participants were selected through stratified random sampling. Data were collected using a researcher-developed 64-item questionnaire. Content and construct validity were confirmed, and reliability was verified using Cronbach’s alpha (α > 0.70). Structural equation modeling (SEM) with LISREL and PLS software was used for data analysis. Findings indicated that external drivers had significant positive effects on internal drivers, open innovation, and closed innovation. Internal drivers positively influenced closed innovation but had no significant impact on open innovation. Open innovation did not affect technological capability, while closed innovation had a strong positive effect on it. Furthermore, technological capability significantly influenced technology adoption, which in turn had a positive effect on organizational performance. Path coefficients (0.71, 0.351, 0.721, 0.347, 0.86, 0.973, and 0.951) and t-values above 1.96 confirmed all hypotheses. The study concluded that innovation—particularly closed innovation—plays a vital role in enhancing technological capability and improving organizational performance. Promoting innovation culture and strengthening internal and external drivers can facilitate technological advancement and sustainable performance improvement in banking institutions.
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