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Advances in Social Sciences Research Journal – Vol. 8, No. 7
Publication Date: July 25, 2021
DOI:10.14738/assrj.87.10516. Matriano, M. T. (2021). Innovative Environment Within Organization’s Structure- Case of Oman. Advances in Social Sciences
Research Journal, 8(7). 310-316.
Services for Science and Education – United Kingdom
Innovative Environment Within Organization’s Structure- Case of
Oman
Dr. Maria Teresa Matriano
Assistant Professor, Department of Management Studies
Middle East College, Al Rusayl, Muscat, Oman
ABSTRACT
In today’s age of modernization, the concept of innovation is considered as one of
the key factors for organizational growth. At the same time, organizations are
expected to adapt culture and environment where innovation can continue to
develop. It requires a coordinated efforts by different actors in organization in
making sure that the activities and integration process meets the conditions for an
effective application. In order to put together the various moving parts of an
innovation integration, the organization also needs to evaluate its structure in
order to ensure that the activities entailed in the innovation process are not
interrupted by organizational bureaucracy. In the case of Oman, the conception of
an innovative environment is challenged by a prevailing organizational structure
that constitutes hierarchical attributes. The problem with hierarchical structure is
that innovation and development are slow. In addition, there is not enough room
for creative inputs to be recognized because the decision points rely on the center
of authority within the organization. This empirical research highlights the concept
of innovative environment within the organizational structures in Oman.
Keywords: Organizational Structure, Culture, Innovation, Innovative Environment,
Process, Improvement
INTRODUCTION
An organization can be defined as an organized body of people that functions for a specific
purpose or objective such as business. Like any other groups, every member upholds different
values and belief be it personal or professional. However, in an organizational setting, the
collective values of each individual make up a culture, which in return represent an
organization’s character. Organizational culture is an important factor that directly impact an
organization’s perspectives on innovation and how it applies to the organization’s structure
and innovation. According to Amiri et al. (2017), an organization’s view on culture influences
its behavior and how the organization approach it mission and vision. Innovation on the other
hand enable organizations to continuously increase their capabilities by exploring more cost- effective and cost-efficient strategies bet it in the form of technology or process improvements.
This in return creates a competitive advantage and adds value to the organization, it’s products,
services and brand. The key here is in the way organizations adapt to innovation and how the
organization integrate innovative environment in its organizational structure.
In the case of Oman, the concept of innovative environment within an organizational structure
is considered as one of the major points of Vision 2020. At the same time, the strategies in the
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Matriano, M. T. (2021). Innovative Environment Within Organization’s Structure- Case of Oman. Advances in Social Sciences Research Journal, 8(7).
310-316.
URL: http://dx.doi.org/10.14738/assrj.87.10516
upcoming Vision 2040 also puts emphasis on the importance of developing an innovative
environment in the organizational structure and culture in the country (UNCTAD, 2004). On the
other hand, UNCTAD also pointed out that the current hierarchical organizational structure of
domestic institutions in Oman creates a barrier in creating the highest level of policymaking.
Developing an innovation system in an organizational level requires improvement in its inter- institutional communication and institutional leadership. In addition, the current
macroeconomic conditions in Oman presents a challenge for innovation primarily because of
the long economic domination of the petrochemical industry and its revenue. Even with a
significant number of SMEs in Oman, the larger economic contributors in the country are large
firms. The UNCTAD (2014) reports shows that only 100 of 91,000 SMEs in Oman file tax returns,
which indicates insufficient development within the middle-intermediary layer of firms in the
country in terms of having innovative environment.
ORGANIZATIONAL STRUCTURE IN OMAN
Understanding innovative environment within the organization’s structure in Oman brings the
discussion towards a closer look at how organizations are structured in the country. The
common structural component of organizations in Oman includes a board of directors who are
responsible for overseeing and advising management of the firm. The directors’ focus is to
represent the corporate governance mechanism of the firm and provides management
directions that aligns with the interest of all stakeholders. According to Younas and Kassim
(2020), the ideal board structure as suggested by The Cadbury Committee is between 8 to 10
members with equal balance of executive and non-executive positions. On the other hand,
smaller firms consisting of sole proprietors follow a simplified structure in which the
proprietor has the sole control of the business from decision-making to tax filing and financial
direction. In terms of general partnership, the business structure is consisting of at least three
shareholders in which one should be an Oman citizen with a minimum share of 30%. For limited
partnership businesses, the owners represent the management with joint responsibility in
imparting their expertise and in making important business decisions. The organizational
structure of businesses in Oman determines how the business will operate based on the
prevailing policies and the structure also varies on the type of organization.
The structure of the business organizations in Oman also determines the flow of
communication both above and below. This means that executive communication is kept within
the executive level and any matters concerning the members of the organization at the lower
tier of the structure are coursed through the leadership in each level. The same can be said
about communications within the lower tier of the organizational structure, where matters that
do not have a direct impact towards the business’ overall. This can be defined as
interdepartmental communications where the departmental leadership can mitigate without
needing guidance from an executive decision (Saadoulia and Al-Khanbashi, 2020). In an
everyday business operation of small and medium sized organizations, communications
particularly involving innovation and implementation follows a linear downward path
considering that there is not much structure to observe a chain of command. On contrast to
larger firms with a broad organizational structure, communications pertaining to innovation
follows a systematic path where the leadership provide their own perspective on the subject
and deliberated thereto by the higher executives.
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Advances in Social Sciences Research Journal (ASSRJ) Vol. 8, Issue 7, July-2021
Services for Science and Education – United Kingdom
ORGANIZATIONAL PERSPECTIVE ON INNOVATION
Innovation is a form of change that every organization should be able to adopt in order to
increase competitiveness and improve operational efficiency. The current course of business
growth globally relies heavily on the organization’s capability to integrate innovation into the
business. On the other hand, not all businesses are able to engage into any form of innovation
not because of limitations in knowledge, resources, or finance, but reasons attributed to the
lack of initiative to undertake organizational innovative environment development. One of the
reasons attributed to low development initiative is because of the existing entry barriers in the
entrepreneurial system in the country (Al-Abri et al., 2018). Several studies were published
recently that focuses on the relationship between entrepreneurship orientation and growth
performance, and how it influences the culture of innovation among SMEs in Oman. According
to Alalawi (2020), organizational learning directly impacts innovation performance. At the
same time, entrepreneurial orientation also enhances the same attributes by means of
encouraging positive behavior of the organization that supports organizational learning
practices. In this process, managers and employees to adopt a continuous learning approach,
thereby promote an innovation-focused organization structure.
Given that continuous learning is part of the process of developing an innovative environment
within an organization’s structure and culture, therefore, the learning process can begin in
higher education institutions. In a study by Halibas et al. (2017), the Penta Helix model of
innovation was introduced with the objective of sustaining and entrepreneurial activity along
with innovation. The model encompasses a creation of network channels that allow key players
to collaborate and share innovation experience, thus enabling a continuous process of
development through information sharing. In addition, the Penta Helix model gathers data on
historical attempts at promoting innovation, which provides an evidence-based data for
innovators to assess and enhance recent attempts (Halibas et al., 2017). Through the described
model, the learning process begins at the higher education institutions enabling future
entrepreneurs to be exposed to the learning mechanism that promotes innovation in an
organizational setting. In addition, the strategic approach provided by the Penta Helix model is
to drive the promotion of innovation in any given organization. This is because the model
creates a platform for entrepreneurs to establish their own innovative environment in a
collaborative approach where other organizations can share relevant insights to what
innovation works best.
The concept of innovative environment within the organizational structure in Oman can be
described as a two-faceted coin where one side is where the prevailing wisdom suggesting that
business organizations example SMEs are the backbone of the economy; hence, the prevailing
attempts to develop the non-petroleum business sector through various innovative strategies.
On the other side is the traditional business environment where the concept of innovation was
overshadowed by a rationale that fails to account the impediment brought by the heavy reliance
to foreign labor and hydrocarbon revenue (Ennis, 2014). This holds true in several countries in
the Gulf region including Oman. There is a prevailing obstacle for many organizations to create
an innovative environment within the organization because of the perceived structural
problems of the economy including socio-political and financial cost that accompanies an
organizational innovation initiative. The study by Ennis (2014) presents two prominent issues
that holds back organizations in Oman from fully embracing the concept of innovation and the
creation of an environment where innovation can be nurtured. First is the heavy import of