Keywords

Innovation, Organizational development, food industry, correlational study.

Introduction

Globalization brought many changes for the Colombian economy was obtaining and managing information in different economic contexts with a high degree of uncertainty is the new normal. Small and medium-sized companies have the challenge of being more efficient in information management to be competitive in situations where they do not have the financial muscle compared to multinationals that offer their goods locally. Globalization brought with it the expansion of Colombia's trade relations for both tangible and intangible goods, impacting the growth of the industries under study. The small businesses´ production of beverages and food still does not have competitive advantages due to the difficulty of its scaling compared to the entry of goods from the United States (exporter of food products to Colombia). However, the correlation between the purchasing power of households versus the growth of exports of conventional goods (not including oil and coal) has been positive in the State of Atlántico and Antioquia (north and center of Colombia), in addition to 4.2% growth state versus the country's average (Andonova & García, 2018; Vargas et al., 2018; Ahcar Olmos & Rodriguez-Barco, 2017). The industries studied must have clear and defined value propositions to retain their customers. Many organizations have failed along the way due to short-term strategic visions where sales and product rotations become the focus of business management, leaving aside business needs over the evolution of their portfolios. Small and medium-sized companies in the food and beverage sector still do not apply the concept of Organizational Development, which gives them the ability to change and achieve greater efficiency through the development, improvement and strengthening of strategies, structures, and processes. Limited new ideas that transform concepts into new/improved products are affecting local competitiveness. In this context, Colombian small business seeks to implement new strategies to respond to market changes. This study identifies the innovation capacities Colombian food and beverage companies affiliated with ACOPI in the Antioquia and Atlántico states. The specific objectives are to determine the factors of innovation and its predominant organizational development model. This study aims to analyze the factors of innovation capacity that influence small and medium-sized companies" organizational development, contributing to know the industry dynamics in depth. This analysis has geographic limitations since it only applies the innovation development model to two states of Colombia.

Theoretical Background

The development of local competitiveness in small and medium-sized food companies in developing countries consists of endogenous conditions that are not like their counterparts in developed countries. The high labor and productive informality limit their competitiveness and incentive towards formal innovation due to the high monetary and non-monetary costs they incur. There are also exogenous conditions that limit their competitiveness. Empirical studies indicate that there is a positive relationship between the implementation of innovation activities, organizations development, and future performance in developing nations beginning with internal changes (Ceylan, 2013; Pozo-García et al., 2020; Cheng & Shiu 2015; de la Puente Pacheco et al., 2019). Some small and medium-sized companies in the food and beverage sector have proven efficient in applying internal practices that generate productive innovation processes, even in tax and labor inefficiency, knowing this phenomenon as innovation capacity (Awate & Mudambi, 2012; Repenning & Sterman 2002; Maiga et al., 2015, Lugo Arias et al., 2020). The capacity for innovation is defined as the materialization of ideas to combine processes that result in new management, products, practices, or services that distinguish a company from its competition (Gilbert, 2006; Dereli, 2015; Beaver & Prince 2002). The most prominent definitions of innovation capabilities are based on dynamic capabilities (Teece et al. 1997; de la Puente Pacheco, 2018). Dynamic capabilities are conceived within strategic business management. Nadler and Tushman (1997) understand the innovation capabilities of a small and medium-sized company as the aptitude to carry out its organizational functions from improving operational, logistical, and decision-making processes, detailing it as follows: Strategic direction of innovation, R&D, Internal implementation of innovation, External implementation (marketing) of innovation, and Management of innovation resources.

Although it remains a limited consensus on what type of capabilities drive innovation, various authors agree that dynamic capabilities sustain productive competitiveness of small and medium-sized enterprises (Reuter et al. 2010; Augier & Teece 2009; Ahmedova, 2015). Others have found a relationship between business innovation and firms’ capability to develop strategic management of resources (Teece, 2019; Chuang, 2004). “A firm’s ‘innovation capability’ can be understood as the potential to innovate or more specifically the “ability to continuously transform knowledge and ideas into new products, processes and systems for the benefit of the firm and its stakeholders” (Saunila, 2019; SANABRIA-LANDAZÁBAL et al., 2017; de la Puente et al., 2020; de la Puente Pacheco et al., 2020).

Innovation capabilities and organizational development drives multiple organizational business skills that stimulate endogenous innovation from fitting isolated managerial ideas resulting in new goods, services, or management practices. The capacity for innovation includes skills that contribute to keeping the creative concept of a business organization current. This concept is hard to apply in developing countries due to monopolistic, anti-competitive or informal practices that disrupt creative production (Lester, 2018; Lee, 2014; de la Puente Pacheco, 2015). Small and medium-sized food companies in Colombia are characterized by constant internal miss-processes that generate high financial pressure to maintain their operations, forcing them to offer their products at higher prices than large national and foreign companies. Added to this is the application of not-very innovative production methods due to limited new-learned skills (especially in managerial practices), limiting them to applying efficient organizational management in terms of direct and indirect cost management (Acosta- Prado et al., 2020; Aramburu et al., 2015). Several authors have suggested that innovation capacities depend on the context. Innovation capabilities change and thus, not are highly effective when exogenous conditions affect formal competitiveness.

Various studies expose the difficulty of applying innovation capabilities in adverse macroeconomic and commercial contexts in developing countries. Zoo et al. (2017) discussed whether and how the relationship between innovation and standardization has implications for socio-economic development in developing countries, finding that a gap between economic growth objectives and social development objectives negatively impacts innovation processes in businesses due to monetary and non-economic factors. Gosain, (2018) added that limited well- prepared human capital in management skills delays the monetary benefits of small and medium- sized companies´ investments in innovation. Therefore, nations should rebalance strategies away from R&D-focused actions, which are likely to fail in the lack of sophisticated private sector partners, towards strengthening human-talent training programs. Cinar et al. (2019) conducted a review of the literature on barriers within public sector innovation processes, based on data from 63 articles, identifying that the nature of the struggles in creating innovative goods, services and processes differs among developing countries. It was found that small and medium-sized companies have challenges in improving administrative processes due to the scarce field education of entrepreneurs, which leads them to overvalue or devalue their companies when looking for strategic partners, venturing into sectors without previously knowing the market segment, and limited public sector support.

The existing research requires further analysis of how entrepreneurial elements impacts innovation capabilities in the Colombian foods and beverages sector. The case studies by Salas et al. (2007) on the contribution of artisanal fishing to food security and family income in Chile, Colombia and Peru found that there is an inverse association between the application of traditional resource management techniques logistics and innovation capacity of the companies observed. It appears that in the food and beverage sector, product innovation would be limited to combining existing products, but not improving internal business logistics. Reina-Usuga et al. (2020) analyzed food governance in short territorial food Supply chains, finding that the existing mechanisms of the food supply of small companies would be limited to populations with low purchasing power in the case of Colombia, which limits their growth capacity compared to large companies that operate and offer their goods in urban centers. Implying a difficulty in acquiring physical, monetary capital and human talent contributing to the application of administratively innovative processes that, for example, position their offer in populations with greater purchasing power. The adverse external structural conditions and the limited prior preparation of various operators in the food and beverage industry contribute to market distortions making them less competitive against large national and foreign companies more advanced in organizational development and innovation capabilities.

Material and Methods

A descriptive-analytical study was carried out through a quasi-experimental design seeking to know the degree of association between innovation capacities and organizational development variables in Atlántico and Antioquia States affiliated with ACOPI. The statistical analysis was carried out with the R software version 3.6.3 (2020-02-29). A random type with a proportional fixation criterion was performed with a sampling error of 5%, applying the formula n=N/ (1+e2*N), where “n” is the sample, "N" is the population and "e" is the margin of error. Data collection was based on a Likert-type scale questionnaire consisting of 33 statements, with a single response option:

1. Strongly agree

2. Agree

3. Neither agrees nor disagrees

4. Disagree

5. Strongly disagree.

This instrument was divided into two main variables (Innovation capacities and Organizational development). The questionnaire was adapted to existing models for the measurement of innovation capabilities. The Cronbach's Alpha test is taken as a reliability reference, recommended when the instruments come with unique responses on a Likert-type scale. An Alpha of 0.910 was obtained with 33 valid items. When analyzing the consistency by variable, innovation capacities resulted in a 0.845 value under 19 items, and for organizational development, 0.822 for 14 items (Table 1), resulting in an overall value of 0.8. Therefore, the instrument is consistent throughout its structure. The sub-variables selected were taken from the literature review set out above on external factors that influence the application of innovation and development capacities for small and medium-sized enterprises in developing countries. These were considered to represent the business dynamics of developing countries (Table 1).

Table 1 Instrument Reliability Test
Variable	Sub variable	Number of  items	Cronbach´s Alpha
Innovation capacities	Product	3	0,845
	Processes	3
	Organizational	4
	marketing	4
	Clients	5
Organizational development	Internal affairs	4	0,822
	Human resources	4
	Learning processes	3
	Management per objectives	3
Global		33	0,905

The statistical processing of the collected data begins with a univariate descriptive analysis, which shows the behavior of the indicators of the two variables studied (Innovation capacities and Organizational development).

The existing relationships between the sub-variables of Innovation capacities (product, processes, marketing, organizational, and customers) with those of Organizational development (Internal processes, Human resources, Learning and growth, and management by objectives) are determined, through bivariate correlational analysis. The innovation capacity in the organizational development of small and medium-sized companies is established through a multivariate analysis. 36.96% of the 30 analyzed companies in the city of Barranquilla and 16 in the city of Medellín were small, 32.61% medium, 26.09% micro, and the remaining 4.35%, large. The working hypothesis is that sub-variables internal processes and learning and growth have the most significant relationship and highest values with the innovation capacity factors.

Results

Companies made significant improvements and changes in products design above in 78% of the cases according to the surveys. In the acquisition of machinery and implementation of innovation processes, 68% responded favorably. However, in the equipment and systems´ innovation component, there was only 50% favorable, 22% show indifference and 28% unfavorable. In the marketing strategies and marketing techniques components, 61% consider that these sub-variables favor productive innovation and strategic management, while only 54% thought that the implementation of innovative strategies benefits competitiveness in small and medium-sized companies. 63% considered that innovation processes in logistic systems favor competitiveness at a local level. The relative frequencies of the organizational development factors were observed, showing a positive response above 85% in improvement in product quality, process coordination, and production processes components. In the increased motivation, reduction of voluntary abandonment and absenteeism of workers components, 63% considered that it is associated with the innovation capacity of their business organizations.

Bivariate Correlational Analysis

The analysis was performed by calculating Pearson's correlation coefficients and their significance tests. Table 2 shows the correlation matrix between the factors innovation capacity and organizational development for Barranquilla and Medellín, showing moderate correlations in almost all bivariate crosses. Internal affairs and learning and growth (organizational development) have the most significant correlations. Table 3 shows the correlation matrix between innovation capacity and organizational development factors for companies in the city of Barranquilla. The correlations are stronger between the internal affairs, learning and growth, and management per objectives with the innovation capacity factors. Correlations ranging from moderate to strong values are observed. In both cases, there are not significant associations between the innovation capacity and human resources factors.

Table 2 Matrix of Correlations Between Capacity for Innovation and Organizational Development (Aggregated)
	Organizational development
		Internal affairs	Human resources	Learning and growth	Management per objectives
	Products	0,1093	0,2476	0,1906	0,4173*
	Processes	0,5472*	0,2945	0,5070*	0,314
Innovation capacity	Markets	0,4133*	0,1652	0,4898*	0,1784
	Organizations	0,3938	0,4216*	0,4897*	0,4773*
	Clients	0,4049*	0,2362	0,5243*	0,3581
* 0.05 significance

Table 3 Confirmatory Factor Model
		Estimate	Standard error	Statistic	p-Value
Innovation capacity	Products	0,5387	0,1431	37,636	0,0002
	Processes	0,7426	0,131	56,693	0
	Markets	0,6646	0,1361	48,826	0
	Organizations	0,7772	0,1285	60,463	0
	Clients	0,7847	0,128	61,299	0
Organizational development	Internal affairs	0,3683	0,12	30,698	0,0021
	Human resources	0,2378	0,101	23,543	0,0186
	Learning and growth	0,4149	0,1332	31,149	0,0018

Discussion

The results show a significant correlation between innovation capacities and organizational development Figure 1. The sub-variables internal processes and learning and growth have the most significant relationship and highest values with the innovation capacity factors. It is necessary for small and medium-sized enterprises to implement the innovation capacity factors correctly to achieve higher performance. A good implementation of innovation capacities in SMEs strengthens their organizational management. The strategies that promote innovation in the supply and distribution of food products is necessary due to their close relationship with the possible absorption of human talent in the studied area. The concept of competitiveness and systemic innovation exposed in the theoretical background is seen in government programs of state administrations that seek to position the local food supply based on tax deductions for profits and the preparation of human talent. However, this study exposes the need for small and medium-sized companies to implement sector innovation strategies within their operations.

Companies measure different factors of innovation capabilities in their processes, thus motivating workers and achieving customer satisfaction agreeing with what was stated by Lisboa et al., (2011) that innovation capabilities and organizational development oriented to customer- focused indicators contributes to the operational profitability of small and medium-sized companies. Other studies, such as those by Kmieciak et al. (2012); Camisón & Villar-López (2014), have proposed organizational development as a mixture of objective indicators, among which is the number of clients, income, and profitability.

Regarding the organizational development of human resources, it is observed that in small and medium-sized companies, the planning of training and development of human resources is unattended. The positive aspect is that there is a concern to improve technological capabilities in the States under study. The results obtained in this research can serve as a guide for new tools in innovation management according to the characteristics of the food and beverage sector since it allows focusing investment on innovation activities in the development of concrete proposals.

Conclusions

The activities of measurement and interpretation of variables attached to the food and beverage sector indicate a starting point to improve productivity and organizational development of small and medium-sized companies. It is recommended that strategies be implemented to improve business innovation management. It is possible to strengthen the strategic direction of companies in the food and beverage sector to generate business value.

Supplementary Materials

The supplementary material is available under a formal request to the corresponding author.

Author Contributions

Conceptualization, Heydi Rico; methodology, Heydi Rico; software, Heydi Rico; validation, Mario de la Puente; formal analysis, Heydi Rico; investigation, Florentino Antonio Rico Calvano; resources, Heydi Rico; data curation, Florentino Antonio Rico Calvano, Briyis Fontecha; writing original draft preparation, Mario de la Puente.; writing review and editing, Briyis Fontecha.

Funding

This research was funded by Corporacion Universitaria Minuto de Dios, UNIMINUTO, and grant number 2020-01.

Data Availability Statement

Archived datasets analyzed can be found in the supplementary materials after a formal request to the corresponding author.

Acknowledgement

The authors thanks to Corporacion Universitaria Minuto de Dios, UNIMINUTO for its financial support during the experiment.

Conflicts of Interest

The authors declare no conflict of interest.

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