De La Salle University Manila

Ramon V. Del Rosario

College of Business
Decision Sciences and Innovation Department

In partial fulfillment of the course

Introduction to Analytics
(LBOLYTC)

The Effect of People Management, Processes Management, Knowledge Acquisition, and

Knowledge Dissemination on Innovation Performance

Submitted by:
Aquilino, Yvonne Zarah
Astucia, Albert Lorenzo
Lim, Krischelle Anne
Mendones, Ralph Justin

Submitted to
Mr. Manuel Tanpoco

December 17, 2022

I. Introduction
Innovation is everywhere and is used by every organization and business entity
but not everyone is considered innovative (Kahn, 2018). To understand how one is or can
be classified as innovative, it is best to first understand what innovation is and what
elements are taken into consideration when making an innovation. According to Kline
and Rosenberg (2010), innovation is a new or improved method of production. This
statement shows that innovation is not just about improving or creating new products but
also about people thinking or designing better methods. It is a matter of economics. Some
elements that need to be considered when understanding innovation are its outcome,
process, and mindset, as stated by Kahn (2018). With the outcome, the main objective is
to identify what the individual wants to happen or create. Next is the process. This
focuses on how the individual is going to achieve their goal. Finally is the mindset. After
knowing what the individual wants to achieve and how to achieve it, he or she must be
mentally prepared for what is to come once the process of achieving said goal starts. In
an establishment where one wants to achieve good innovation performance, they must
also have proper management for their employees as they are ultimately responsible for
the creation of the product and overall performance of the company. Being able to take
initiative, be creative and become problem solvers will lead to better innovation
performance because their behaviors will align with the performance objectives
(Segarra-Ciprés, Escrig-Tena, & García-Juan, 2019).

Being innovative and creating innovation is what everyone wants to achieve but
how does it affect the economy and what is its significance or importance? Fagerberg,
Srholec, and Verspagen (2010) have found in their research that the diffusion of
innovation in advanced countries will serve as a powerful equalizer as it can raise the
standard of living in the whole economy, especially the poor countries. In a business
setting, Rosenbusch, Brinckmann, and Bausch (2011) have said that innovation is
intended to improve business performance. Continuous ways to be innovative will result
in positive growth development in a firm as the inability to adapt to changes is the result
of the downfall in the business. Being able to create something new, especially during a
crisis is how new markets expand and how old markets recover.
 In this paper, the researchers would want to test and examine four variables that
may or may not have a relationship or effect on innovation performance and the said
variables are people management, processes management, knowledge acquisition, and
knowledge dissemination. First is people management and this refers to the
implementation of HR practices in a company or any business entity. It focuses on how
manager trains their employees in terms of leadership behavior. The goal of people
management is to create responsible employees that take initiative for the betterment of
the whole team or business (Knies, Leisink, & van de Schoot, 2020). Secondly, there is
process management. In Palmberg’s 2009 journal about exploring process management,
there is no single widespread definition for this management but she also states that there
are two different movements for process management that can be used: (a) process
management for single process improvement and (b) process management for system
improvement. A single process improvement is a systematic approach used to understand
and used for the improvement of a certain process while system improvement is a holistic
and valuable approach to managing and determining all the aspects of the organization.
Moving forward, it is the knowledge acquisition which according to Vendrell-Herrero,
Gomes, Opazo-Basaez, and Bustinza (2022) is the usage of aggregate knowledge such as
learning-by-doing, learning-by-feedback, and learning-by-memory to determine product
specifications, expansion, improvement, and development. Finally, knowledge
dissemination is the interactive process of communicating with the target audience in
order to create positive change in the business whether this is for the distribution of
products or services (Ordoñez & Serrat, 2009).

With all this being said, the researchers would like to study the effectiveness of
the four variables (people management, processes management, knowledge acquisition,
and knowledge dissemination) on innovation performance. These four independent
variables were chosen as the researchers are interested in exploring more on these said
factors that may or may not have an impact on the innovation performance of a business.
As college students taking up business-related courses, it is important to be
knowledgeable about possible factors that may result in a loss or downfall in the business
to prevent these problems. This is the same as when these said factors will benefit the
 business, it would be an advantage and could be utilized to gain profit. The findings of
this study may also be used by business owners to be knowledgeable about the topic and
the possible outcomes of each factor when being considered for implementation.

II. Research Questions and Hypothesis

A. Research Questions
The study aims to examine the effects of people management, processes
management, knowledge acquisition, and knowledge dissemination on the organization's
innovation performance. It seeks to answer the following research questions:
1. In general, how was the innovation performance of the organization?
2. Does people management have an effect on the innovation performance of the
organization?
3. Does process management have an effect on the innovation performance of the
organization?
4. Does knowledge acquisition have an effect on the innovation performance of the
organization?
5. Does knowledge dissemination affect the innovation performance of the
organization?
6. To what magnitude do people management, processes management, knowledge
acquisition, and knowledge dissemination mutually, affect the whole innovation
performance of the organization?
B. Hypotheses
Figure 1.
Hypotheses of the Study 1.1

Table 1.
Hypotheses of the Study 1.2

𝐻1 𝐻𝑜: People Management has no effect on the innovation performance of

the organization.
𝐻𝑎: People Management has an effect on the innovation performance of the

organization.

𝐻2 𝐻𝑜: Processes Management has no effect on the innovation performance of

the organization.
𝐻𝑎: Processes Management has an effect on the innovation performance of

the organization.
 𝐻3 𝐻𝑜: Knowledge Acquisition has no effect on the innovation performance of

the organization.
𝐻𝑎: Knowledge Acquisition has an effect on the innovation performance of

the organization.

𝐻4 𝐻𝑜: Knowledge Dissemination has no effect on the innovation performance

of the organization.
𝐻𝑎: Knowledge Dissemination has an effect on the innovation performance

of the organization.

𝐻5 𝐻𝑜: People Management, Processes Management, Knowledge Acquisition,

and Knowledge Dissemination have no effect on the innovation

performance of the organization.
𝐻𝑎: People Management, Processes Management, Knowledge Acquisition,

and Knowledge Dissemination have an effect on the innovation

performance of the organization.

III. Results
A. Summary of Demographics
Figure 1.
Years in the Organization of Respondents
 Over 50% of the respondents had 5 years or fewer years within their organization.
Respondents that had 5-10 years in their respective organizations amounted to 19.6% of
the total respondents. There is an almost equal distribution of the number of respondents
in the category of 10 - 15, 15 - 20, and 20 - 25. Lastly, respondents who had 25 - 30 years
and 30 - 35 years of experience accounted for 3.9% and 1.7% of total respondents
respectively.

Figure 2.
Sex Distribution of Respondents
 Majority of the group’s respondents was male while female respondents
corresponded to 43% of the total respondent count.

Figure 3.
Highest Educational Attainment

From the collected data, 80.4% of the respondents had a bachelor's degree, and
those who answered “others” stood next to the demographic at 7.8%. Only 1.1% of
respondents in this study had a doctorate degree.

B. Descriptive Statistics
With the gathered data, the descriptive statistics for the respondents on the
selected topics: People Management, Process Management, Knowledge Acquisition, and
Knowledge Dissemination can be seen. More precisely, the means, the standard
deviation, and the verbal interpretation for each survey question for the chosen sections
and as well as the grand means are shown.

Table 2.
7-Point Likert Scale Interval

Interval Innovation Scale Application Scale

1.00 - 1.86 I Strongly Disagree to this statement Strongly Disagree

 1.87 - 2.73 I Disagree to this statement Disagree

2.74 - 3.6 I Slightly Disagree to this statement Slightly Disagree

3.61 - 4.47 I am Neutral to this statement Neutral

4.48 - 5.34 I Slightly Agree to this statement Slightly Agree

5.35 - 6.21 I Agree to this statement Agree

6.21 - 7.00 I Strongly Agree to this statement Strongly Agree

Table 2 will be used as the basis for the proceeding discussions by the group. As
the group will be utilizing equal intervals, upon calculation, a 7-point Likert scale will
have a range of 0.6 between each interval.

Table 3.
Descriptive Statistics for People Management

People Management Mean Standard Interpretation

Deviation

Our company has wide training and 5.676 1.436 I Agree to this
development process, including career statement
path planning, for all our employees

Our company has an effective team 5.441 1.446 I Agree to this

rewards to motivate the employees statement

In our company employees satisfaction 5.682 1.287 I Agree to this

is regularly measured statement

Our company has maintained both 5.514 1.508 I Agree to this

“top-down” and “bottom-up” statement
communication processes

In our company, everyone participates in 5.693 1.272 I Agree to this

improving our product(s)/process(es) statement

We believe that all employees take 5.950 1.233 I Agree to this

quality as their responsibility statement

Total Mean 5.659 1.364 I Agree to this

statement
 The total mean of the questions on people management is shown to be 5.659, in
reference to table 2, this shows that the majority of the respondents agree with the
statements asked in this question.

Table 4.
Descriptive Statistics for Process Management

Process Management Mean Standard Interpretation

Deviation

Preventing defective products from 5.989 1.276 I Agree to this

occurring is our strong attitude in our statement
company

The processes for designing new 6.000 1.259 I Strongly Agree to this
products in our company ensure quality statement

Our company evaluates and improves 6.128 1.127 I Strongly Agree to this
business process continuously statement

Our company has a program to find 5.497 1.363 I Agree to this

wasted time in all internal processes statement

Our company evaluates and improves 5.849 1.292 I Agree to this

the individual employee’s performance statement
continuously

Total Mean 5.893 1.263 I Agree to this

statement

Majority of the respondents on this question had shown, a mean score of 5.893 is
observed and with reference to table 2, depicts that the respondents agree with the
statements.

Table 5.
Descriptive Statistics for Knowledge Acquisition

Knowledge Acquisition Mean Standard Interpretation

Deviation
My organization has processes for 5.799 1.229 I Agree to this
applying knowledge learned from statement
mistakes

My organization has processes for 5.927 1.185 I Agree to this

applying knowledge learned from statement
experience

My organization has processes for using 5.860 1.198 I Agree to this

knowledge of new services statement

Total Mean 5.862 1.204 I Agree to this

statement

A mean score of 5.862 can be observed for this section. In relation to table 2, the
interpretation from this section shows that the respondents agree with the questions
asked.

Table 6.
Descriptive Statistics for Knowledge Dissemination

Knowledge Dissemination Mean Standard Interpretation

Deviation

My organization has processes for using 6.050 1.182 I Strongly Agree to this
knowledge to solve problems statement

My organization matches sources of 6.045 1.151 I Strongly Agree to this

knowledge to problems and challenges statement

My organization uses knowledge to 6.067 1.174 I Strongly Agree to this

problems to improve efficiency statement

My organization uses knowledge to 5.983 1.270 I Agree to this

adjust strategic direction statement

My organization is able to locate and 6.000 1.185 I Strongly Agree to this

apply knowledge to changing statement
competitive conditions

Total Mean 6.029 1.192 I Strongly Agree to this

statement
 With reference to table 2, a total mean score for this section of 6.029 depicts that
the respondents had strongly agreed to the statements present within this section.

Table 7.
Descriptive Statistics [JASP]

Effects of Management PEM PRM KAC KD

on Innovation

VALID 179 179 179 179

MISSING 17 17 17 17

MEAN 5.651 5.893 5.862 6.029

STD. DEVIATION 1.139 1.047 1.126 1.078

MINIMUM 1.500 1.600 1.000 1.000

MAXIMUM 7.000 7.000 7.000 7.000

C. Regression Analysis
To measure how the chosen dependent variables namely, People Management,
Process Management, Knowledge Acquisition, and Knowledge Dissemination affects
the innovation performance of the organization, in this study, the group will be utilizing a
linear regression model. An important thing to note is that the level of significance used
for hypothesis testing in this study is 0.05 which constitutes a 95% level of significance.
Below is the table for the categorization of variables as well as the regression analysis of
the group.

Table 8.
Renaming Variables

Questions Sub-Category Renamed Variable

Our company has wide training and PEM1

development process, including career path
planning, for all our employees

Our company has an effective team rewards to PEM2

motivate the employees

In our company employees satisfaction is PEM3

regularly measured PEM
Our company has maintained both “top-down” PEM4
and “bottom-up” communication processes

In our company, everyone participates in PEM5

improving our product (s) /process(es)

We believe that all employees take quality as PEM6

their responsibility

Preventing defective products from occurring PRM1

is our strong attitude in our company

The processes for designing new products in PRM2

our company ensure quality

Our company evaluates and improves business PRM3 PRM

process continuously

Our company has a program to find wasted PRM4

time in all internal processes

Our company evaluates and improves the PRM5

individual employee’s performance
continuously

My organization has processes for applying KAC1

knowledge learned from mistakes

My organization has processes for applying KAC2 KAC

knowledge learned from experience

My organization has processes for using KAC3

knowledge of new services

My organization has processes for using KD1

knowledge to solve problems

My organization matches sources of KD2

knowledge to problems and challenges
KD
My organization uses knowledge to problems KD3
to improve efficiency

My organization uses knowledge to adjust KD4

 strategic direction

My organization is able to locate and apply KD5

knowledge to changing competitive conditions

Figure 4.
Regression Model

For a possibility to be accepted in research, it needs to be above 70% as it is the

standard value in research. With a coefficient of determination (R2) of 0.822, which is
above the 70% threshold for research, the researchers found that 82.2% of Innovation
Performance (IP) can be attributed to the changes in the independent variables chosen for
this paper (PEM, PRM, KAC, KD).

The p-value of PEM, PRM, KAC, and KD are as follows: 0.004, 0.625, < 0.001,
and < 0.001. Of all the chosen covariates, only PRM had a p-value of above 0.05 (a)
which would allow us to reject the alternative hypothesis 2 (H2) as it showed to not be a
significant predictor of Innovation Performance. However PEM, KAC, and KD, all had a
 p-value that is less than a which depicts that the three variables are significant predictors
of Innovation Performance. To add, KAC and KD both had a p-value of < 0.001 therefore
both are more significant predictors of Innovation Performance compared to PEM.

The regression equation for this model will be as follows:

IP = 0.384 + 0.172PEM + 0.032PRM + 0.316KAC + 0.394KD

With a confidence level of 95%, for every increase of PEM, IP will increase by
0.384 on average and with all variables held constant, IP will increase by a minimum of
0.055 and a maximum of 0.290. For PRM, IP will increase by 0.032 on average for every
increase of PEM, and with all other variables held constant, IP will increase by a
minimum of -0.097 and a maximum of 0.161. This is to be followed by KAC which for
every increase of KAC, IP will increase by 0.316 on average, and with all other variables
held constant, IP will increase by a minimum of 0.194 and a maximum of 0.438. Lastly,
for every increase of KD, IP will increase by an average of 0.394 with a minimum of
0.252 and a maximum of 0.537 with all other variables held constant.

IV. Conclusion (400-1000 words)

It is no surprise that organizations are focused more on their quality end products
rather than the experience and personal growth of their employees. The organization's
innovation performance is what they are focused on, and so, they want to investigate how
managing its employees and providing them with knowledge helps them in the creation
of new products and services. Furthermore, based on the analysis and given data, the
innovation performance of an organization has PRM (process management) as its
significant influence, meaning that organizations are constantly moving towards
modernization by focusing their innovation on process development to improve work
efficiency and reduce cost. Compared to the other three; people management, knowledge
acquisition, and knowledge dissemination, have the least influence on innovation
performance because they can all be managed at a personal level, and further innovation
towards these factors can be costly and would have the least effect on the organization as
a whole. Despite having a low influence on innovation performance, people management
is still relevant in the sense that if people are unmotivated in a workplace there can be no
work done. The same goes for knowledge dissemination and acquisition, if people are not
instructed properly and have no knowledge of operating machinery and processes there
are guaranteed damages and with damages comes inefficiency and of course, the cost of
these damages which would not be good for the organization.

From the data gathered from 179 respondents, the group carefully analyzed their
responses to the questionnaire. The group wanted to find insights on whether people
management (PEM), process management (PRM), knowledge acquisition (KAC), and
knowledge dissemination (KD) had an effect on innovation performance within an
organization. With a linear regression model, the group was able to determine that PRM
was insignificant in determining Innovation Performance; however, PEM, KAC, and KD
were all significant determinants of Innovation Performance, with KAC and KD being
the most significant determinants. Now, the researchers can say that the component of
knowledge is what makes the enhanced performance of the organization impact the most.
Generally, the innovation performance of the organization is firmly dependent on only the
three (3) independent variables (People Management, Knowledge Acquisition, and
Knowledge Dissemination). With every increase in people management and knowledge
being distributed and overlooked, the innovation performance is also affected. Therefore,
based on the results the innovation performance in the organization is growing in
conjunction with the flow of three independent variables which affect IP.
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