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Explorative
Explorative learning strategy and learning
its impact on creativity and strategy

innovation
An empirical investigation among ICT-SMEs 957

Naser Valaei Received 14 December 2015


Revised 7 April 2016
Sunway University Business School, Sunway University, Accepted 13 October 2016
Bandar Sunway, Malaysia
Sajad Rezaei
Chair of Marketing and Innovation, Universität Hamburg,
Hamburg, Germany, and
Maryam Emami
International Business School, Universiti Teknologi Malaysia, Skudai, Malaysia

Abstract
Purpose – The purpose of this paper is to examine the structural relationships among explorative learning
strategy, improvisational creativity, compositional creativity, and innovation in information and
communication technology small- and medium-sized enterprises (ICT-SMEs).
Design/methodology/approach – In total, 213 valid questionnaires from SMEs’ top management
positions were evaluated to investigate the proposed model of the research empirically. As a
methodological approach, partial least square (PLS) path modeling approach, a variance-based structural
equation modeling was employed.
Findings – The statistical results imply that explorative learning has a positive impact on improvisational
creativity and innovation while improvisational creativity has a positive influence on compositional creativity
and innovation as well. Compositional creativity and innovation are also positively associated. Surprisingly,
improvisational creativity mediates the relationship between explorative learning and innovation. Furthermore,
PLS-multi group analysis reveals that heterogeneity exists in the collected data and number of employees is a
moderating variable. The results of the research indicate that companies with number of employees between 51
and 100 are more creative and innovative in comparison with other groups. On the other hand, the positive
relationship between explorative learning and compositional creativity was not supported in this research.
Originality/value – This study is one of the few research works in the realm of examining the structural
relationship among explorative learning strategy, improvisational creativity, compositional creativity,
and innovation in ICT-SMEs, regarding the number of employees as a moderating variable.
Keywords Innovation, Malaysia, ICT-SMEs, Compositional creativity, Improvisational creativity,
Explorative learning strategy
Paper type Research paper

Introduction
Creativity can either be improvisational or compositional (Sawyer, 1992). “Improvisation is
not just something individuals do but it is a learned capacity that organizations can
manage” (Cunha et al., 2015, p. 511). For organizations, in order to improvise, they need
“insight, rapid experimentation and evolutionary learning,” as cited by McGrath (2010,
p. 247). In organizational setting with hypercompetitive characteristics (Wiggins and Ruefli,
2005), improvisation is progressively valued because it helps strategizing and reacting to
Business Process Management
difficult situations as events unfold in unpredictable ways (Magni and Maruping, 2013) via Journal
real-time learning (Cunha et al., 2015). Vol. 23 No. 5, 2017
pp. 957-983
Scholars have extensively stated that sustained innovative performance within © Emerald Publishing Limited
1463-7154
companies is stemmed from exploring the new capabilities along with new resources DOI 10.1108/BPMJ-12-2015-0179
BPMJ (Chen et al., 2009; Wang and Hsu, 2014). An organization, which involves itself in
23,5 exploratory innovation, characterizes its behavior with integrating search, discovery, and
experimentation to its system ( Jansen et al., 2006). In a TED talk, Haanaes (2016) addresses
the importance of explorative learning strategy in companies by giving the example of
Facit, the best mechanical calculator producer in the world based in Sweden. With the
invention of electronic calculator, in a period of six months, Facit came from maximum
958 revenue to nonexistence due to the lack of explorative learning strategy and too much
exploitation which is a short-term strategy (Haanaes, 2016). Overemphasis on exploitation
strategy is much more risky than exploration strategy in companies Valaei et al. (2016)
because exploration is tied with new ideas and it has a long-term orientation that brings
success (Haanaes, 2016).
In today’s world, corporations are competing in a dynamic market environment. Therefore,
in order to succeed in such markets, they should perform various tasks to explore new
possibilities for adapting themselves to environmental changes which will be happening
in the near future. They are also required to exploit their own developed abilities for fulfilling
the current demands of the corporation (Lavie and Rosenkopf, 2006). Studies, which were
conducted on explorative strategy, were enormously evolved to the point that this realm has
dominated the existing literature on organizational learning as well as competitive advantages
(Raisch et al., 2009). According to Barney (2001), in the resource-based view, competitive
advantage achievement relies mainly on available resources and capabilities within an
organization. One instance of potential capacities in achieving competitive advantage can be
named as explorative strategy. Exploration is a strategic option that a corporation has, so that
it can be used as a response to the firm’s rivals (Li et al., 2008). As a principal in the domain of
organizational learning, the concepts of exploratory learning came into view to give the firm
an ability to adapt (Gupta et al., 2006; Tamayo-Torres et al., 2014).
As it was recently accentuated by various works, engagement in exploratory innovation is a
prerequisite for success in organizations (Atuahene-Gima and Murray, 2007; Jansen et al., 2006;
Li et al., 2010). In spite of rising interests in the realm of innovation-based exploration, this
subject of research has been largely focused on managers in large corporations in older studies.
Unfortunately, the studies in this spot among SMEs are scarce. This inadequacy of literature
has been noticeable since SMEs, like large firms, are encountered with similar kinds of
competitive pressures. Nonetheless, the weakness of SMEs can normally be outlined as the
shortage of needed resources, undeveloped processes and routines, hierarchical administrative
systems, as well as other operational experiences within the organization. Larger corporations
have the privilege of fostering, together with integrating such contradictory innovations into
their systems. Hence, there is a need for further conceptual as well as empirical studies in this
area, in order to reveal the ways that SMEs can use for the purpose of nurturing the explorative
capabilities in their companies.
Various literatures have been investigating the concept of exploration in different
fields, including knowledge management (Hernández-Espallardo et al., 2011; Santiago and
Alcorta, 2012), organizational learning (Sirén et al., 2012; Wang and Hsu, 2014; Vanhaverbeke
et al., 2006), and adaptation (Bonesso et al., 2014; Choi and Lee, 2015; Gupta et al., 2006) for
many years. As Lavie et al. (2010) explain, the concept was investigated in a variety of
contexts like technology development and product innovation, strategic alliances as well as
senior-management teams. Furthermore, the notion of exploration has been analyzed on
many levels and it has generated interest in research at various levels, like individual
(Bonesso et al., 2014), organizational (Choi and Chandler, 2015), group (Raisch et al., 2009),
industry (Lavie et al., 2010), and inter-organizational (Hernández-Espallardo et al., 2011).
The present research examines the exploration in the organizational level from the
individual’s point of view within a firm. Whereas individuals and groups within organizations
also attend to pressures to explore, we focus on the macro-level of analysis.
Improvisation can be a learned capability which is managed by corporations Explorative
(Cunha et al., 2015). It does not necessarily refer to what an individual can do, but in the learning
area of improvisational learning, there is a lack of research and analysis which can be strategy
both comprehensive and well structured (Cunha et al., 2015). Since previous studies
(Vendelø, 2009; Cunha et al., 2015) theoretically indicated a positive linkage between learning
and improvisation, this study tries to empirically show that learning not only impacts on
improvisation, but also it led to composition and innovation as well. 959
Even though the significance of improvisation to understand the unexpected responses
and circumstances has been widely discussed, it is unfortunate that there are not adequate
research in this area, while its rising magnitude is blatantly stated (Vera and Crossan, 2005).
Albeit there are a few works in various research domains like technology implementation or
new product development, which proposed a number of theoretical frameworks based on
improvisation. However, the unclosed gaps in such literature can visibly be observed
(Magni et al., 2009). First, research works on the domain of improvisation rely heavily on the
studies about jazz, theater, sports, or even public speaking as a metaphor (e.g. Hatch, 1997,
1998; Kamoche and Cunha, 2003; Sawyer, 1992). This perspective has the tendency to drive
improvisation into a shadow as just a metaphor. The present research is attempting to step
outside of just viewing improvisation as a metaphorical conceptualization. It intends to focus
on improvisation to observe the analysis within the setting of an organization. These settings
are the organizational ones, in which employees are carrying out the complex projects and
processes while they come across unexpected occurrences. In order to go beyond the
improvisation’s metaphorical dimension, we attempt to understand the extent to which
explorative learning is associated with improvisational creativity, compositional creativity,
and innovation within SMEs conditioning on the number of employees in companies as well
as examining the plausible mediating role of improvisational/compositional creativity on the
explorative learning-innovation relationship. Consequently, the current research makes
significant contributions to the body of improvisation knowledge in the SME realm in
particular and in the organizational contexts in general.
Therefore, the purpose of this study is to examine the structural relationships among
explorative learning strategy, improvisational creativity, compositional creativity, and
innovation among information and communication technology small- and medium-sized
enterprises (ICT-SMEs). The study is organized as follows. The next section focuses on the
presentation of main research constructs and hypothesis development based on the
previous-related studies (literature review). After the development of research model
(Figure 1), the statistical and methodological approaches are proposed. As a methodological
approach to the main analysis, a variance-based structural equation modeling (VB-SEM)
was employed. Afterwards, the findings, based on the measurement and structural model,
are presented. Finally, discussion, limitations, and future directions are presented.

Literature review
When it comes to productivity and organizational competitiveness, the role of innovation in
today’s milieu has become more crucial. Flexibility is being more accentuated while the
focus on concerns and practices of conventional managerialism is coming into the picture.
Styles of working, that are adopted from less structured systems, provide a leverage from
either tacit or explicit knowledge that is being created (Leybourne and Kennedy, 2015).
Innovation, as a broad concept, has an extensive definition that bears the outcome of
business activities, which are located in either manufacturing or in service companies
together with the entity of their businesses. In addition, the more innovative SMEs, the
higher their level of performance (Gupta and Gupta, 2014). Innovation has been considered
as a consequence or an outcome of activities in creativity by many researchers (Yusuf, 2009).
Johansson (2004, p. 15) asserts that people who “familiarize themselves with various skills
BPMJ Number of
23,5 employees

H7
Improvisational
creativity

H4
H1
960 H8a

Explorative H6
learning H3 Innovation

H2 H8b
H5

Compositional
creativity
Figure 1. Direct Effect
Research model Moderating Effect
Mediation Effect

and knowledge outside their own information, on different domains and activities,” are
more prone to creativity and innovation process. As much as the process of innovation is
concerned, obtaining the latest skills and aptitudes will highly rely on the strategies
of learning.
When it comes to the process of strategic learning, Zahra and George (2002) outline its
similarities with two views: the information processing view of organizational learning and
the dynamic capability perspective of absorptive capacity. As a matter of fact, the leading
dimensions of absorptive capacity are being captured by strategic learning, which is to
recognize the value of new information, to assimilate it, and to apply it to commercial ends.
The present work asserts that strategic learning ought to be recognized as a particular kind
of organizational learning. It also declares that strategic learning bears the ability of an
organization for processing the knowledge in a strategic level in order to recommence the
firms’ strategies. The current paper defines strategic learning as a process in a higher order
that assists the corporation in internalizing the strategic knowledge. This knowledge is
acquired from activities which are tactical in seeking opportunities. This is done via using a
method to enhance the competitive position of the firm (Sirén et al., 2012).
The terms, exploration and exploitation, have been progressively used these days and
finding a balance between these concepts is a challenge companies facing nowadays
(Haanaes, 2016). It tackles one of the most prominent challenges which organizations are
dealing with in the current century: a corporate’s need to explore as well as to execute novel
paths toward major innovation whereas simultaneously, exploiting the current capabilities
in a successful, efficient style to achieve the business purposes (Medcof and Song, 2013).
Kang et al. (2007) find a conceptual association between exploration and exploitation in the
realm of human resource management. Their proposition is that all the organizational
learning happens through social interactions which are defined with two broad archetypes
that are relational: the entrepreneurial and the cooperative. These two notions are closely
related to explorative and exploitative learning, accordingly. This research provides further
explanations about March’s (1991) perspective on explorative learning, in addition to
exploitative learning.
In an environment which is complex and dynamic, the most useful activities are the
exploratory ones. It is mainly because there is a requirement for a high level of
improvisation to stumble upon the environmental challenges that are hard to understand
while they are constantly changing. The best way that most corporations can deal with
numerous challenges is through exploratory activities. As an instance, when a major, brand Explorative
new product is coming to the market by a rival firm, the organization can benefit from learning
exploratory activities. strategy
Regarding the learning activities, while the concepts’ definitions are mainly centered in
the domain of knowledge, scholars have stepped out of their comfort zones by expanding
the term usage including organizational diversification as well as different meanings for
exploration. In more recent years, the applications of this notion were expanded by 961
researchers beyond an organizational level as they conduct works on individual and
network levels as well (Choi and Chandler, 2015). Despite the fact that definitions of
exploration went through some alterations and confusion, the distinctness of the concept
has already been agreed upon. Within corporations, the terms can be applied to various
times and places.

Explorative learning strategy


Based on March’s (1991) definition of exploration, it refers to “search, variation, risk taking,
experimentation, play, flexibility, and discovery.” The definition of explorative learning,
which is derived from such terms, can be further expanded to utilizing the knowledge and
technologies which are provided from an external environment. Explorative learning can be
a valid choice for businesses. It also might create some risks at a stage in which a company
considers bringing about a balance between knowledge and technology. The knowledge can
be either internal or it could be the highly novel information they receive from external
sources. It can possibly drive the business farther away from its original goals
(Vanhaverbeke et al., 2006).
Furthermore, explorative learning strategies should be viewed as a long-term objective
which might result in a negative way if too much consideration is being put into it. In case of
having excessive emphasis on the explorative learning strategy, expensive experimentation,
incompetency accompanied by ideas that are not well developed could be the outcomes.
Unfortunately, these results might impose unnecessary high costs to a corporation.
As far as the knowledge-based perspective (Spender, 1996) within a corporation is
concerned, it is possible to study the organizational learning as a means to knowledge
renewal which is explorative learning. Jaw and Liu (2003) and Bröring and Herzog (2008)
define knowledge assets renewal as the capability that can lead to learning and exploring
the knowledge that is novel. Various researchers made substantial efforts to shed further
lights on better comprehension of explorative learning’s nature in recent years. Therefore,
many studies in this area reveal that explorative learning will result in a better performance
when it comes to developing new products along with organizations (Atuahene-Gima and
Murray, 2007; Hahn et al., 2015). On the contrary, Li et al. (2010) outline that some
researchers look into market orientation or team’s social capital of top management as
antecedents of explorative learning while others investigate on innovation or new product
performance as its consequences. While it can be observed that the literature in explorative
learning is growing, there are still some shortcomings when it comes to the field of empirical
research. As a result, the aim of conducting the current research is to make an attempt for
addressing the mentioned oversights. In recent years, some studies have discovered
that explorative learning influences both new product development and new product
introduction (Atuahene-Gima and Murray, 2007). Discussing the new product development
team, exploratory learning activities are defined as the learning which derives from the
technological and market information. This information is very different from the firm’s
ongoing experiences, which normally provide a solution space to solve problems
with implementing solutions that are ill-defined. To date, more importantly, few studies
have discussed the role of this learning strategy on improvisational and compositional
creativity empirically.
BPMJ Looking into an organizational theory, it can be seen that there is a fast growth of
23,5 interest regarding impromptu actions in organizations and its potential value for the firms.
According to Miner et al. (2001), studies are looking into improvisation within corporations,
keeping the fast-moving competitive settings in mind. New product development, as an
instance, is a recurring theme in the area of research, which articulates that the knowledge
and skills that are stored can shape improvisation with significant approaches.
962 As the main focus of the previous literature in this domain, it is highlighted that
organizational memory, as an outcome of prior learning, will form the improvisation of novel
performances that is both useful and skillful. However, there is less clarity of research on
whether or not, explorative learning can influence improvisation. We are investigating if
various sets of behaviors or even insights (the ones that organizations might have experienced
if they have their usual planning and execution systems) will lead to improvisation.
Improvised activities are normally happening outside the routines or formal plans which
were previously made. As a result, the current research raises the question that whether or
not, improvised activities are accepted as well as incorporated into the organizational
activities of the future like innovation. Improvisation becomes more visible as “part of
competitive action and learning repertoires” (Cunha et al., 2015, p. 512). Considering another
level of organizational learning which is higher, it is still not apparent if a company can
actually learn to come up with an improvisation which is an unplanned event. Composition
can be viewed as the creation of novelty in a deliberate manner, mainly because
improvisation is regarded as a creation of novelty that is accidental.
Studying employees in Thai companies, Sukserm and Takahashi (2012) find that
learning positively impacts on self-efficacy and ethical behavior. Surveying US firms, the
results of the study conducted by Liao and Barnes (2015) show that knowledge acquisition
and product innovation flexibility are directly associated in SMEs. While conducting a
research on 200 firms from Taiwan, Li et al. (2014) find a positive relationship between
explorative innovation and new product program performance. Furthermore, drawn on a
sample of 238 manufacturing plants, Sanders Jones and Linderman (2014) indicate that
process improvement and innovation are not related. For drawing a clearer picture of
learning for SMEs and its value, the current study investigates on the positive role of
explorative learning strategy on improvisational creativity, compositional creativity,
and innovation. Thus, the following three hypotheses are proposed:
H1. There is a positive relationship between explorative learning and improvisational
creativity in Malaysian SMEs.
H2. There is a positive relationship between explorative learning and compositional
creativity in Malaysian SMEs.
H3. There is a positive relationship between explorative learning and innovation
capability in Malaysian SMEs.

Creativity
Observing the concept of creativity has shown that it exists in various aspects of today’s
daily life, ranging from its practices in art and music, to the business world. It normally
brings about novel ideas, brand new products and services in today’s business era.
If corporations are wishing to maintain their competitive advantages, creativity will be an
essential requirement for them. A company cannot presume that its core competency or its
competitive advantage will last for a long-time period; therefore, they need to count on
creativity as a means to attain innovation.
When it comes to entrepreneurial capability, creativity is playing a prominent role since
creativity is closely tied to identifying opportunities, which will lead to implementing a
brand new corporation or even an industry (Ko and Butler, 2007). The escalating growth Explorative
rate, which is originating from an entrepreneur’s capability in creativity, can also have a learning
positive effect on job growth. strategy
From Ward’s (2004) point of view, creativity can be regarded as an entrepreneurship
aspect while developing innovative products relies on this capability. Moreover, Sternberg
(2004) considers the knowledge asset that individuals possess, as an enabler of creativity
practices. Ko and Butler (2006) claim that even those unrelated information is important and 963
beneficial in the process of creativity, as these disconnected pieces of information can be
combined with previous knowledge and experience (both tacit and explicit) and they can
result in a creative work.
When it comes to the creativity process, it has been stated as the capability, with which a
person can relate as well as incorporate the unassociated pieces of information into
processes and activities of a business. In reality, it is considered as one major activity.
This process, which is called an entrepreneurial behavior, ought to be put into practice by
both managers and employees.
Amabile’s (1997) definition of creativity observes it as the generation of novel and
appropriate solutions to open-ended problems in any domain of human activity. Creativity
process within a business occurs in various stages, ranging from new business
developments and innovative products to processes, markets, and means to obtain
resources which are all new (Ko and Butler, 2007).
Creativity was examined mostly as a two-dimensional concept by many researchers.
This type of segregation can be seen in various disciplines including creativity, innovation
and learning. As an instance, Cardinal (2001) draws a line between incremental and radical
innovation. Furthermore, Benner and Tushman (2003) conceptualize the notions of
explorative and exploitative innovation, which are believed to be rooted in various learning
strategies. They include the exploitative learning strategy that is refining the existing
knowledge along with the explorative learning strategy, which is looking for new
knowledge. Thus, the concept of creativity, based on novelty degree and time-related, is
categorized into improvisation and composition (Sawyer, 1992, 2015).

Improvisational creativity
As a capability for employees and teams within an organization, improvisation gained a
prominent position that can assist in dealing with environments, which are unexpected in
addition to being unpredictable. Improvisation comes to value when organizations are in
search for new opportunities which exist out of their traditional realms. It also boosts the
radical probability of novel ideas, when unexpected events are taking place (Nisula et al., 2015).
As it is stated by Gilson and Madjar (2011), creativity can be divided into two categories
of radical and incremental. It has been said the business world has borrowed the creativity
practices from theories that exist in art and music territories. More to the point, concepts of
incremental and radical are not supposed to be used as creativity types. Regarding the
theories that derive from musical domain, the concept of creativity can be split into two
aspects of improvisation and composition (Sawyer, 1992, 2015). As a result, the concepts,
which have been applied in theories of music, can also be used in creativity theories in the
business world too.
Looking at improvisation from the vantage point of creativity, it can be said that as a
type of creativity with a high degree of novelty, improvisation takes place either instantly or
within a short-time period. The type of creativity can be differentiated via the novelty
degree in an act, while this degree can range from a low level to a higher one (Zhou and
Shalley, 2003). In such a case scenario, improvisation is categorized in a high level of
creativity. Moreover, Woodman et al. (1993) believe that the level of creativity in an
individual is connected to organizational changes.
BPMJ Improvisation occurs when a person articulates a novel idea, which can lead to
23,5 developing new products or services. Vera and Crossan (2005) view improvisation as an
activity, that might be labeled as creative, but there is a probability of either success or
failure in it. According to response generation as well as response execution of a business,
there is a possibility that business actions are categorized into four groups.
This classification will be merely rooted in two concepts: the first is the degree of novelty
964 which is the extent of divergence from the preceding plans or actions while the second
notion is temporal separation that lies within response generation and response execution.
When it comes to improvisation, it is linked to some learning processes (Miner et al., 2001).
Additionally, some firms have exhibited improvisational competencies. Generally,
improvisation in practice involves executing the parts, which previously composed the
material. Through moments of improvisation, various compositions will partially take place
(Fisher and Amabile, 2009). If improvisation is situated within the stages that were proposed
by the componential theory of creativity (Amabile, 1996), it can be observed that improvisation
is characterized by how some aspects of compositional process are merged with one another.
As it was discussed, innovation can make improvements in performance, in a way that
was not on the improviser’s immediate agenda to carry out a project. Improvisation
illustrates actions that are highly deviated from former actions or even plans, while they are
combined with identifying problems, generating along with executing ideas within a small
window of time. Nevertheless, considering both improvisation and composition, as
somewhat diverse processes, they can have fascinating implications on creativity research
works (Fisher and Amabile, 2009). As a result, we hypothesize that:
H4. There is a positive relationship between improvisational creativity and innovation
capability in Malaysian SMEs.

Compositional creativity
Both concepts of improvisation and composition are labeled as creativity (Vera and
Crossan, 2005) while both can create products and outcomes that are novel. The only
distinction that draws the line between the two creativity types is the time frame which
exists in the interval between the time that the action is received and the moment that it is
being executed. Regarding improvisational activity, the level of separation between
response generation and execution is rather low.
When creativity occurs at a low level and a high time temporal, it is referred to as
incremental creativity. Gilson and Madjar (2011) view incremental creativity as the type of
creativity in which a number of modifications and refinements will be applied to processes,
procedures, products, and services. They believe that both incremental and radical
creativity are the kinds which are bearing the feature of distinctness.
Compositional creativity can lead to innovation too. Researchers normally think of it as a
level of creativity that is low, but valuable. Considering compositional creativity with a
connection between improvisation and composition, a good illustration would be thinking of
an orchestra symphony. It is usually performed in an auditorium by musicians in an
orchestra. The improvisation in this example is the improvisational capability of the
composer that is being revealed, like Beethoven or Mozart, who came up with the symphony
in view of their notes, rhythms, and music loudness. Without a doubt, the musician, at the
time of performance, plays the whole symphony while he might even have left some parts of
his improvisation out. They might be deleted since they were not in line with the whole
symphony, even if the omitted sections were creative, highly valuable pieces of music or
novel. In such an instance, when musicians are playing the symphony, the composition
comes into the picture. As the orchestra members practice the symphony repeatedly, it turns
into a habit for them. There will obviously be a low level of creativity in performing a
symphony, which was already improvised by a composer who previously exhibited a high Explorative
level of value and novelty within the same musical piece. What is more is that, such an learning
example, points out the connection which exists between improvisation and composition. strategy
Organizational creativity, as a term, is widely utilized in reference to creativity of an
organization. It can target novel products, processes, services, or even strategies that
are within an organization (Amabile, 1996). Fisher and Amabile (2009) look at the creativity of
the organization’s members and the involving processes which are undertaken by the same 965
members within a corporation. In the present research, a definition of organizational creativity
which is extensively accepted will be reviewed. It refers to novel and appropriate ideas which
are being produced to enable coming up products, services, processes, or strategies that are
useful or valuable within a firm (Amabile, 1996). On the other hand, the focus of this study is
not merely on such ideas, but it is rather on the process from which, such ideas are being
produced. Domain of psychology has been hosting the creativity research works in recent
decades. Regarding a more conventional perspective toward a creative process, studies mainly
stemmed from Wallas’s (1926) seminal work in the realm of psychology. Four distinct stages
are proposed by Wallas (1926). The first stage is preparation, in which there is a need to detect
a problem that is in need of solving as well as to identify the data which are relevant.
The second stage is called incubation, which is where the existing problem will be left alone
for a period of time because the unconscious mind will do some work on it. The third stage or
illumination is when the thought or a solution will abruptly come to the surface. In the fourth
stage, that is verification, it is time to test the idea or the solution to see whether or not, it is
acceptable against the criteria on hand. The current study evaluates such standard definition
as the compositional creativity. This perspective sounds to cover various aspects of creativity
within the organizational setting sufficiently. An example in this case will be a new product
creation which happens through processes that are thoroughly planned and are followed by
the processes which are stage-gate. Nevertheless, there are a number of studies which are
based on explicit links that are related to more established literature in the realm of
organizational creativity. The current study is aiming at examining such links.
Discussing creativity as a widespread notion, researchers view it as the ability which
result in coming up with ideas, strategies and processes that are new (Woodman et al., 1993;
Amabile, 1996). When it comes to the psychological perspective of creativity, it can be said
that this concept is observed as various steps to understand the problem, to expand
solutions that are creative and to select choices from feasible solutions. Such a vantage point
can also be used in managerial contexts. In such contexts, it is referred to as compositional
creativity that is also pointed out as a traditional approach (Ford, 1996). What differentiates
between improvisational creativity and compositional creativity reside within the role that
these two factors bear: time and novelty.
Innovation has never been generated by a single individual, yet along it has always
derived from groups, networks, and organizations. Innovation normally arises from diffused
and distributed social networks (Sawyer, 2015). Weick Karl (2001) asserts that “the
newfound urgency in organizational studies to understand improvisation and learning
is symptomatic of growing societal concerns about how to cope with discontinuity, multiple
commitments, interruptions, and transient purposes that dissolve without warning.”
Albeit Sawyer (2015) claims that organizational innovation is improvisational, we argue that
organizational innovation could be compositional as well. Not all improvisations will lead to
innovation. Consequently, we propose the hypothesis as follows:
H5. There is a positive relationship between compositional creativity and innovation
capability in Malaysian SMEs.
As a practice which concurrently occurs with the task in hand, improvisational creativity
normally bears a high degree of novelty. The fact that improvised activity happens at a high
BPMJ level of novelty does not essentially assure that innovation would be the result. There might
23,5 be some circumstances in which improvisational creativity will not lead to innovation.
Such situation generally takes place when the process or activity, which is being
improvised, is not in parallel with or suitable for the purposes and strategies of the business
on hand or because improvisation has a high point of novelty. The focus of a firm might
alter when improvisation is at a high level while eroding the business goals. There is also a
966 chance that improvisation is being overlooked and it will not be even applied to the firm.
It has been speculated that composition is the result of improvisation. The improvisational
activities, which are in parallel with the goals and objectives of the company, have the
privilege of being frequently used and applied. Hence, such activities will somehow change
into being compositional activities which will be repeatedly practiced with a habitual
foundation. Besides, improvisation generates knowledge, which can later on be used as a
source of benefit to the future initiatives of the organization, while it can also fulfill the need to
advance the procedures and processes continually (Leybourne and Kennedy, 2015).
This evidence can act as a justification to have additional investigations of the relationship
between improvisation and composition. Therefore, hypothesis is being formulated as follows:
H6. There is a positive relationship between improvisational creativity and
compositional creativity in Malaysian SMEs.

Number of employees as a moderating factor


Previous studies have shown the important role of demographic factors in individual and
collective creativity. For instance, Martins and Shalley (2011) study the association between
demographic factors and collective creativity while they find a positive relationship between
age and collective creativity. The results of their study also indicate that race and sex are
not relevant to collective creativity. Foss et al. (2013) also find that the relationship between
creativity and innovation implementation is moderated by gender in such a way that
women’s ideas are not implemented to the same degree as men’s. Curşeu (2010) also reports
that gender heterogeneity has a positive influence on group creativity. Even though
previous research argues that demographic diversity should enhance creativity, very little is
known of this relationship (Nishii and Goncalo, 2008). In addition, to the best of this study’s
knowledge, few researchers have examined the role of demographic variables on the
relationships among explorative learning, creativity, and innovation.
In this research, since the unit of study is organizational, each respondent represents an SME.
Amongst the demographic information, which is collected from respondents (see Table I),
the investigators are only interested in examining the moderating role of employees’ number
since gender, age, and position address the personal information of the respondents, which will
not reflect the respective SME. Whereas scant literature is available for studying the
demographic diversity in the context of creativity (Pluut and Curşeu, 2013), and this research is
amongst the first studies that examine the moderating effect of number of employees on the
relationships among explorative learning and SMEs’ improvisational creativity, compositional
creativity, and innovation. However, the current work considers the number of employees as a
categorical moderating variable. Additionally, it can be hypothesized that:
H7. The extent of the relationship between explorative learning, improvisational
creativity, compositional creativity, and innovation is moderated by different
number of employees in SMEs.

Mediation effect of creativity activities


Creativity is the antecedent of innovation (Yusuf, 2009). If an improvisation is successful, it
can lead to innovation. “An explanation of innovation requires an analysis of the processual
Characteristics Frequency %
Explorative
learning
Gender strategy
Male 151 70.9
Female 62 29.1
Age
Between 20-29 102 47.9 967
Between 30-39 58 27.2
Between 40-49 46 21.6
50 and above 7 3.3
Position in company
CEO 95 44.6
CIO 71 33.3
COO 42 19.8
CFO 5 2.3
Number of employees
Between 5 and 20 115 54
Between 21 and 50 77 36.1
Between 51 and 100 18 8.5
Between 101 and 150 3 1.4 Table I.
Note: n ¼ 213 Sample characteristics

and interactional mechanisms whereby innovation emerges, and explores the


exact interactional nature of improvisational encounters, and what specific mechanisms
allow improvisational encounters to generate surprising and original innovations”
(Sawyer, 2015, p. 180). According to Vera et al. (2014), improvisation is a learning
process that is based on learning by doing and improvisation is involved in trial-and-error
learning that is long term. Câmara and Petrenko (2016) propose a theoretical model within
which they consider improvisation as a mediating factor to the relationship between
emotional responses and job performance. This study proposes that creativity activities
can mediate the effect of explorative learning on innovation in a positive way. Figure 1
depicts the study’s research model. Finally, it is hypothesized that:
H8a. Improvisational creativity mediates the relationship between explorative learning
and innovation.
H8b. Compositional creativity mediates the relationship between explorative learning
and innovation.

Methodology
This study employed a quantitative research methodology in order to conduct the empirical
analysis as well as to test the proposed model (Figure 1). A questionnaire was developed in
two main sections for two main reasons: to capture the information related to respondents’
background and to collect information about the proposed theoretical research model.
The measurement scales were adopted from some previous studies. Six items were selected to
measure the explorative learning (Atuahene-Gima and Murray, 2007; Gebauer et al., 2012),
four items were chosen to measure the improvisational creativity (Vera and Crossan, 2005),
four items were picked to quantify compositional creativity (Valaei, 2017), and five
items measured innovation (Valaei, 2017; Valaei and Rezaei, 2017; Valaei et al., 2017).
The questionnaires were distributed among ICT-SME sector in Malaysia. The CEO, CFO,
COO, and CIO were the target respondents of this research. In total, 422 questionnaires were
BPMJ distributed among respondents from which, 213 valid questionnaires were collected
23,5 (50.47 percent response rate). Table I depicts respondents’ characteristics.
Before the main study was conducted, a pre-test with 25 samples (n ¼ 25) was
performed to ensure that the questionnaire is readable and free of any error and typos.
The questionnaire items were adopted from previous-related studies (see Table AI).
Construct validity, which is “to assess whether the measures chosen are true constructs
968 describing the event or merely artefacts of the methodology itself” (Straub, 1989, p. 150)
was employed. Table II implies that all the items that are measuring a specific construct,
were loaded highly on that particular construct. The items were loaded lower on the other
constructs which confirms the notion of construct validity for this study. Furthermore,
once the data were collected, a common method variance (CMV ) as a single survey method
was performed. According to Podsakoff et al. (2003), CMV is the variance which can
attribute to the measurement method. The present work addressed the CMV, following the
guidelines which were proposed by Podsakoff et al. (2003). Both statistical techniques
including the Harman’s one-factor test in the partial correlation procedures, and the
structural model marker-variable technique were employed. The results which were
obtained from the modified process of Harman’s one-factor test indicate that CMV is not a
problem since the single factor solution was not obtained. As a result, the statistical
findings confirm that CMV is not a concern in the current study.

Partial least square (PLS) SEM method


SEM technique has a great advantage since it integrates various statistical processes for
parameter assessment and hypothesis testing simultaneously (Fornell and Larcker, 1981;
Esposito Vinzi et al., 2010; Henseler et al., 2014) and it enables the researchers to test or to modify
the theories and models (Anderson and Gerbing, 1982). PLS-SEM enables the researchers
to assess both casual relationships among indicators/items (Valaei and Baroto, 2017)

Latent construct Item Loading CRa CA AVEb VIFc SEd p-Valuee

Compositional creativity Com.crt1 0.773 0.855 0.745 0.664 1.402 0.039 0.000
Com.crt2 0.880 2.190 0.029 0.000
Com.crt4 0.787 1.725 0.047 0.000
Explorative learning Explorative.lrn1 0.794 0.885 0.837 0.605 1.897 0.030 0.000
Explorative.lrn2 0.742 1.559 0.039 0.000
Explorative.lrn3 0.785 1.804 0.034 0.000
Explorative.lrn5 0.803 2.269 0.032 0.000
Explorative.lrn6 0.764 2.008 0.037 0.000
Improvisational creativity Impro.crt1 0.760 0.826 0.720 0.544 1.428 0.038 0.000
Impro.crt2 0.762 1.420 0.040 0.000
Impro.crt3 0.755 1.472 0.041 0.000
Impro.crt4 0.668 1.333 0.043 0.000
Innovation Innovation1 0.771 0.884 0.835 0.604 1.776 0.046 0.000
Innovation2 0.798 1.821 0.029 0.000
Innovation3 0.695 1.407 0.053 0.000
Innovation4 0.802 1.979 0.033 0.000
Innovation5 0.814 2.111 0.031 0.000
Notes: CA, Cronbach’s α. aComposite reliability (CR) ¼ (square of the summation of the factor loadings)/
((square of the summation of the factor loadings) + (square of the summation of the error variances)).
b
Average variance extracted (AVE) ¼ (summation of the square of the factor loadings)/((summation of the
square of the factor loadings) + (summation of the error variances)). cItem Collinearity, variance inflation
Table II. factor (VIF); acceptable if ⩽ 5, ideally ⩽ 3.3. dStandard error (SE) for indicators. ep-Values o0.05 are desirable
Construct validity for reflective indicators
as well as the further casual relationships of latent constructs (Gudergan et al., 2008). Explorative
The variance of the endogenous latent constructs is being maximized by PLS-SEM learning
(Hair et al., 2012). As a VB-SEM, PLS statistical approaches are based on the component strategy
construct concept that is suitable to explain the existing complex relationships (Sarstedt, 2008).
In order to test a complex model, CB-SEM would obtain a biased result while it fails to produce
an adequate robust path among constructs (Hair et al., 2012). “The PLS algorithm allows each
indicator to vary in how much it contributes to the composite score of the latent variable” 969
(Chin et al., 2003, p. 25). PLS-SEM analysis includes a measurement model that evaluates
the relationships among unobserved or latent constructs and structural model that assess the
relationships among the latent constructs and their observed indicators (Henseler, 2010).
According to Hair et al. (2013), for SEM analysis, the first step is to measure the
model assessment. The second stage will be to assess the structural model results which are the
two-stage approach. Consequently, SmartPLS software (Ringle et al., 2014) is utilized for
the current research in order to measure the PLS-SEM analysis.

Results
As it is depicted in Table II, all the reflective constructs loadings are more than the minimum
threshold value of 0.60 except for Com.crt3 and Explorative.lrn4, which were deleted due to
their low loadings. As it is demonstrated by the composite reliability (CR) values, Table II
shows that for all the latent constructs that possess high levels of internal consistency
reliability, the CR ought to be higher than 0.70 (Hair et al., 2011). Dijkstra-Henseler’s ρA as an
estimate of the reliability of construct scores received high values (more than 0.7) (Henseler
et al., 2016). Figure 2 depicts the measurement model specifications, including item loading,
path coefficient, and R2 values. The AVE values, that are convergent validity, are well above
the minimum required level of 0.50, showing convergent validity for all latent constructs.
Table III demonstrates Fornell-Larcker criterion. As it is illustrated in Table III, the
correlations that exist among the study’s latent constructs are outlined as off-diagonal values.

Impro.crt1 Impro.crt2 Impro.crt3 Impro.crt4

0.760 0.762 0.755 0.668

0.329

Improvisational
creativity
Explorative... 0.574 0.312
Innovation1
Explorative...
0.794
0.742 0.771 Innovation2
Explorative...
0.785 0.798
0.358 0.608 0.695 Innovation3
0.803 0.413 0.802
0.764 0.814 Innovation4
Explorative... Explorative
Innovation
Learning
Innovation5
Explorative...
0.114
0.300

0.237

Compositional
Creativity
0.773 0.880 0.787
Figure 2.
Measurement model
Com.crt1 Com.crt2 Com.crt4
BPMJ Additionally, the diagonal values are depicted as square values of AVEs. Hence, as it
23,5 established by Fornell and Larcker, there is discriminant validity among the research
constructs. A comparison of the loadings across the columns in Table IV exhibits that an
indicator’s loadings, on its own construct is higher in all cases compared to all of its
cross-loadings with other constructs. Finally, Table V depicts the discriminant validity
according to heterotrait-monotrait ratio. The criterion for heterotrait-monotrait ratio is below
970 0.85 (Kline, 2001) or 0.90 (Teo et al., 2008; Gold and Arvind Malhotra, 2001).

Supplementary analysis for measurement model assessment


The goodness of fit assessment should be done at the beginning of model assessment prior to
examining the measurement and structural model (Henseler et al., 2016). Therefore, researchers

Compositional Explorative Improvisational


Construct creativity learning creativity Innovation
a
Compositional creativity 0.815
Explorative learning 0.351 0.778
Improvisational creativity 0.478 0.574 0.737
Table III. Innovation 0.574 0.542 0.561 0.777
Fornell-Larcker Note: aThe off-diagonals are the correlations between the latent constructs and diagonals are square
criterion values of AVEs

Items Compositional creativity Explorative learning Improvisational creativity Innovation

Com.crt1 0.773 0.299 0.444 0.490


Com.crt2 0.880 0.245 0.359 0.425
Com.crt4 0.787 0.305 0.351 0.476
Explorative.lrn1 0.234 0.794 0.423 0.517
Explorative.lrn2 0.369 0.742 0.502 0.508
Explorative.lrn3 0.206 0.785 0.425 0.478
Explorative.lrn5 0.261 0.803 0.442 0.483
Explorative.lrn6 0.275 0.764 0.427 0.506
Impro.crt1 0.435 0.397 0.760 0.472
Impro.crt2 0.409 0.462 0.762 0.555
Impro.crt3 0.289 0.446 0.755 0.463
Impro.crt4 0.257 0.383 0.668 0.450
Innovation1 0.418 0.432 0.556 0.771
Innovation2 0.440 0.559 0.537 0.798
Innovation3 0.507 0.435 0.472 0.695
Table IV. Innovation4 0.473 0.527 0.500 0.802
Cross loadings Innovation5 0.394 0.533 0.500 0.814

Construct Compositional creativity Explorative learning Improvisational creativity

Explorative learning 0.434


Table V. Improvisational creativity 0.635 0.733
Discriminant validity Innovation 0.723 0.764 0.848
– Heterotrait- Note: The criterion for HTMT is below 0.85 (Kline, 2001) or 0.90 (Gold and Arvind Malhotra, 2001;
monotrait ratio Teo et al., 2008)
need to report the model fit by means of inference statistics (tests of model fit) or use of fit Explorative
indices (assessment of approximate model fit) (Dijkstra and Henseler, 2015; Henseler et al., 2016). learning
To assess the goodness of model fit, ADANCO software (Henseler and Dijkstra, 2015) provides strategy
standardized root mean square residual (SRMR) as the only appropriate measure of model fit
(Hu and Bentler, 1998), as well as other model fit criteria relying on the bootstrap to identify the
likelihood of obtaining a discrepancy between the empirical and model-implied correlation
matrix (Dijkstra and Henseler, 2015; Henseler et al., 2016) such as geodesic discrepancy (dG), and 971
unweighted least squares discrepancy (dULS) (Dijkstra and Henseler, 2015). According to
Hair et al. (2014), a value of less than 0.1 (Hair et al., 2014) or 0.08, a more conservative view
(Hu and Bentler, 1998), is a good fit for SRMR. Table AII shows the tests of model fit as well as
SRMR fit index. According to Henseler et al. (2016), the criteria of overall model are: SRMRo95
percent of bootstrap quantile (HI95 of SRMR), dULS o95 percent of bootstrap quantile (HI95 of
dULS), and dG o95 percent of bootstrap quantile (HI95 of dG). Shown in Table AII, these criteria
are met; therefore, the model has a good fit.

Structural model assessment


To test the hypotheses, SEM algorithm was performed to estimate a series of relationships
that are simultaneously dependent and interrelational, while the bootstrapping procedure
was performed to test the statistics for hypotheses. A coefficient that equals 0 is opposed to
the alternative hypothesis in which the coefficient does not even out to 0 (Hair et al., 2011).
Tables VI-XI present the structural testing. As the primary criteria for inner model
evolution, R2 represents the amount of explained variance of each endogenous latent
variable (Hair et al., 2012). Table VI shows that R2 for the entire model (innovation) is 0.608
which presents a substantial explanation of the model. In order to evaluate R2 value’s
magnitude, which is a criterion of predictive accuracy, Q2 value that is an indicator of the
model’s predictive relevancy and it was additionally compared to R2 (Hair et al., 2013).
Table VI illustrates that all Q2 values are definitely more than 0, thus, it is providing support
for predictive relevance for the endogenous constructs (Hair et al., 2013; Rezaei, 2015).
Table VII depicts the results of f 2 and q2 effect sizes within which the explorative
learning has the highest f2 effect size on improvisational creativity and the highest q2 effect
size on innovation.
Finally, Table VIII represents the hypothesis testing of direct relationships. The results
imply that all the direct-relationship hypotheses were accepted except H2. H1 (explorative

Endogenous latent variable R2 value Q2 value

Compositional creativity 0.237 0.114


Improvisational creativity 0.329 0.177 Table VI.
Innovation 0.608 0.350 Results of R2 and
Notes: Q2 values 0.02, 0.15, and 0.35 have effect size small, medium, and large, respectively Q2 values

Improvisational creativity Compositional creativity Innovation


f2 q2 f2 q2 f2 q2

Compositional creativity 0.175 0.060


Explorative learning 0.491 0.011 0.000 0.217 0.072 Table VII.
Improvisational creativity 0.150 0.045 0.145 0.054 Results – f2 and q2
Notes: aAssessing q2 and f2. Values 0.02, 0.15, and 0.35 have effect size small, medium, and large, respectively effect sizea
BPMJ Path
23,5 Hypothesis Path coefficient SE T-value Decision

H1 Explorative learning → improvisational creativity 0.574 0.065 8.805*** Supported


H2 Explorative learning → compositional creativity 0.114 0.099 1.148 Not supported
H3 Explorative learning → innovation 0.358 0.054 6.583*** Supported
H4 Improvisational creativity → innovation 0.312 0.057 5.470*** Supported
972 H5 Compositional creativity → innovation 0.300 0.074 4.051*** Supported
Table VIII. H6 Improvisational creativity → compositional 0.413 0.094 4.396*** Supported
Hypothesis testing of creativity
direct relationships Note: ***p o0.01

p-Value p-Value p-Value p-Value


Path (G1 vs G2) (G1 vs G3) (G2 vs G3) (G3 vs G2)

Compositional creativity → innovation 0.088 0.478 0.881 0.116


Explorative learning → compositional creativity 0.708 0.263 0.143 0.849
Explorative learning → improvisational creativity 0.069 0.438 0.853 0.148
Explorative learning → innovation 0.320 0.091 0.244 0.768
Table IX.
Results of PLS-MGA Improvisational creativity → compositional creativity 0.500 0.983 0.984 0.019
for number of Improvisational creativity → innovation 0.983 0.961 0.469 0.535
employees Notes: G1 (SMEs with number of employees between 5 and 20), G2 (SMEs with number of employees
(examining H7) between 21 and 50), and G3 (SMEs with number of employees between 51 and 100)

Relationship Path coefficient T-value P-value


Explorative learning → innovation 0.644 13.593 0.000
Explorative learning → improvisational creativity 0.573 8.640 0.000
Improvisational creativity → innovation 0.436 7.221 0.000
Table X.
Mediation analysis of SE T-value VAF Decision
improvisational H8a: explorative learning → improvisational 0.039 6.411* 28% Supported
creativity creativity → innovation
(examining H8a) Notes: Variance accounted for (VAF). *p o0.01

Relationship Path coefficient T-value P-value


Explorative learning → innovation 0.644 13.593 0.000
Explorative learning → compositional creativity 0.351 3.829 0.000
Compositional creativity → innovation 0.399 5.330 0.000
Table XI.
Mediation analysis SE T-value VAF Decision
of compositional H8b: explorative learning → compositional 0.032 4.376 17.9% Not supported
creativity creativity → innovation
(examining H8b) Note: Variance accounted for (VAF)

learning → improvisational creativity) with a path coefficient of 0.574, standard


error ¼ 0.065 and t-statistic of 8.805 was supported while H2 (explorative learning →
compositional creativity) with a path coefficient of 0.114, standard error of 0.099 and
t-statistic of 1.148 was rejected. H3 (explorative learning → innovation) with a path
coefficient of 0.358, standard error ¼ 0.054 and t-statistic of 6.583 and H4 (improvisational Explorative
creativity → innovation) having a path coefficient of 0.312, standard error ¼ 0.057, and t- learning
statistic of 5.470 were also supported. H5 (compositional creativity → innovation) with strategy
having a path coefficient of 0.300, standard error ¼ 0.074, and t-statistic of 4.051 and H6
(improvisational creativity → compositional creativity) with path coefficient of 0.413,
standard error ¼ 0.094, and t-statistic of 4.396 were also supported. As a final point, the
indirect, positive effect (see Table AIII) of explorative learning is significant on 973
compositional creativity and innovation.

PLS-multi group analysis (PLS-MGA)


To address the last hypothesis of this study (H7), the number of employees in SMEs is
considered as a categorical moderator variable. PLS-MGA is applied via using the percentile
bootstrapping method to find out the differences among SMEs with number of employees
below 5-20, between 21 and 59, between 51 and 100, and between 101 and 150. It should be
noted that this four-group classification of employees’ numbers is based on the Malaysian
definition of the SMEs. Only three cases indicated a number of employees between 101 and
150 (see Table I). This subgroup is discarded from PLS-MGA due to its singular matrix
error. This error happens when there is a huge gap between the number of cases under each
group (Sarstedt et al., 2011). For that reason, three groups are considered for PLS-MGA and
the significant group differences are illustrated in Table IX.
In PLS-MGA, based on the guidelines that are outlined by Henseler et al. (2009),
the percentages smaller than 0.05 and higher than 0.95 indicate a significant difference of
a specific PLS path coefficient among groups. Therefore, the result is significant at
5 percent error level if the p-value is smaller than 0.05 or is higher than 0.95. According to
Henseler et al. (2009), the percentile below 0.05 points out that the bootstrapping results
of group 1 is higher than group 2. In addition, percentiles higher than 0.95 indicate that
the bootstrapping results of group 2 are higher than group 1. According to Table IX,
the results indicate that the path coefficients of relationships (improvisational
creativity → compositional creativity, improvisational creativity → innovation) are
significantly different for SMEs with various numbers of employees. Consequently,
H7 is supported.
According to Table IX, the path coefficients of “improvisational creativity →
compositional creativity” are stronger for companies with the number of employees
between 51 and 100. Comparing companies with number of employees between 5 and 20 and
between 21 and 50, the path coefficient of “improvisational creativity → innovation” is
stronger for companies with a number of employees between 21 and 50. Looking at
companies with the number of employees between 5 and 20 and between 21 and 50, this
path coefficient is stronger for the ones with the number of employees between 21 and 50.
Further results of group differences, which are tabulated in Table IX, also indicate that
those companies with the number of employees between 51 and 100 are more creative and
innovative, in comparison with those SMEs with the number of employees between 5 and 20
as well as 21 and 50.
To examine the mediation role of improvisational and compositional creativity, this
study follows Preacher and Hayes’s (2008) approach in testing mediating effects as well as
the guidelines of Hair et al. (2013). Shown in Table X, examining the mediating effect of
improvisational creativity on the relationship between explorative learning and innovation,
the results indicate that the variance accounted for (the size of indirect effect in relation to
the total effect) is 28 percent. According to Hair et al. (2013), the variance accounted for
below 20 percent is no mediation, between 20 and 80 percent is partial mediation, and higher
than 80 percent is full mediation. However, improvisational creativity partially mediates the
relationship between explorative learning and innovation, supporting H8a. Additionally,
BPMJ the results of Table XI show that the variance accounted for is 17.9 percent. This implies
23,5 that compositional creativity does not mediate the relationship between explorative learning
and innovation, rejecting H8b. Therefore, improvisational creativity both directly and
indirectly is associated with innovation.

Discussion
974 “Articles investigating learning and improvisation are absent, even if reviews of the literature
on organizational improvisation suggest close links between the two concepts” (Vendelø, 2009,
p. 449). The current research offers various theoretical implications. To begin with, the current
work is making prominent contributions to the research realm on topics of organizational
improvisation, composition and innovation via examining the explorative learning.
Undeniably, various studies that exist on improvisation are fragmented while they are
mainly focused on the analysis on individual levels (e.g. Nisula et al., 2015; Magni et al., 2009),
rather than organizational levels. Besides, there were a few research works which were
targeted to examine the organizational improvisation and composition in a quantitative frame.
Extant research has confirmed the positive role of learning strategies on firm performance and
strategic entrepreneurship (e.g. Azadegan and Dooley, 2010; Hernández-Espallardo et al., 2011;
Kyrgidou and Petridou, 2011) and the present research represented the first effort to bridge
the gaps which existed among explorative learning, organizational improvisation, and
organizational composition. Therefore, by extending the theory of this domain, this study
empirically revealed that explorative learning strategies ought to give more comprehensive
explanations about the improvisation which exists in a firm.
Crossan and Sorrenti (1997, p. 155) state that “improvisation is a critical, yet neglected area
of organizational learning.” There is no unanimity on the casual relationship between learning
and improvisation. In one hand, Cunha et al. (1999) indicate that organizations can learn how
to improvise about themselves and their surroundings through the action component of
improvisation. On the other hand, Vendelø (2009) states that improvisation may also be
considered as input to learning. Negative outcome of improvisational learning can also be
expected (Moorman and Miner, 1998). Previous research studied exploration on an abstract
construct of individual creativity (Hahn et al., 2015) but this research tap into the
organizational perspective of creativity. Despite the discrepancies between the positive
(Hahn et al., 2015; Lambe et al., 2009) and negative outcomes (Atuahene-Gima and
Murray, 2007; Sirén et al., 2012) of learning strategies, our findings shed light on how
explorative learning strategy is both directly and indirectly related to improvisational
creativity, compositional creativity and innovation. Surprisingly, this study shows that
explorative learning is conducive to improvisational learning and innovation, supporting the
proposition made by Cunha et al. (1999). The relationship between improvisational and
compositional creativity is also supported. It is found that explorative learning strategy is not
directly related to compositional creativity, but its indirect effect is significant. Interestingly,
being in line with Câmara and Petrenko (2016), the findings showed that improvisational
creativity mediates the relationship between explorative learning and innovation, but
compositional creativity did not show any mediating effect to the explorative learning-
innovation relationship. The indirect effect of explorative learning and innovation is also
significant. Even though Sawyer (2015) claims that organizational innovation is
improvisational, this study found that organizational innovation can be compositional too.
The results of the present research have paved the way toward a better understanding of
improvisation in the setting of SME. Without a doubt, this research has not covered the
aspects of metaphor in improvisation, which has a dominate role in the literature of
improvisation like (Sawyer, 1992; Sawyer, 2015; Cunha et al., 2015; Cunha et al., 1999), since a
quantitative data analysis approach was used for the purpose of the current study.
In particular, this work strengthens the present theoretical research on improvisation,
mainly because the study’s framework was designed and was examined within a natural Explorative
environment that companies are functioning at. Likewise, the current study transcends the learning
conventional literature which relies a great deal on jazz and theater by making a ground on strategy
a management theory via developing the theoretical arguments. As a consequence, this
work provides valid responses to the current needs of incorporating the context while
examining the organizational phenomena (Magni et al., 2009). The present study provides
more information on empirical work, which was in need of further investigations on 975
improvisation within a setting with a team (Vera and Crossan, 2005).
Observing from a managerial vantage point, the results accentuate the fact that
organizations and teams have to prepare their mindsets in order to facilitate the exploration,
while they open a space for extemporaneous behaviors to happen in order to encounter the
surfacing issues. Consequently, managers ought to develop an understanding of their
employees and their interaction processes, so that they can improve the organizational
improvisation. If managers go through with such processes, they will provide the potential
support tools for the sake of their own corporation to be prepared in facing spontaneous and
abrupt circumstances. Furthermore, by virtue of this study, managers can examine how
business settings can result in more creative and innovative outcomes. The findings of this
research reveal that those companies with a number of employees between 51 and 100 are
more creative and innovative.
If improvisation receives more attention from SMEs, it will assist the companies in case
of running into unexpected events. It will facilitate an immediate decision-making process
which will ditch the routines while it is searching for an alternative solution. It is so
significant to remember that, although the improvised solutions might lead to innovative
ideas/processes/products, or services, they might be routinized later for the purpose of
amendments and revisions. They may be viewed as a routine which resulted in the
innovative ideas/processes/products, or services. As a result, managers are supposed to pick
up on practices in human resource management to smoothen such a progress to achieve
integration and cohesion for their employees (Magni et al., 2009). This goal can be reached
via formal methods, such as composing teams. It can also be fulfilled in a more informal way
by nurturing an environment that supports the spontaneous interactions which happen
among individuals in an organization.

Limitation and future research


In this study, some limitations are acknowledged, regarding the study’s sample and setting.
Data were collected in Selangor state, Malaysia; therefore, the generalization of the study’s
results to Western or European cultures might be rather limited. Moreover, conclusions that
are drawn from the current research are solely based on ICT-SMEs, which may confine the
findings’ generalizability across a wide range of settings in various domains.
Finally, further studies in other domains and industries to test this model are highly
recommended. There are other factors that might be relevant to improvisation, composition
and innovation in companies such as organizational structure, culture, transformational
leadership, and knowledge network. In addition, functional diversity can also be considered
as another significant moderator variable that is related to the proposed model of this study.
Diversity may be inflected in terms of backgrounds, experience, and point of view. Further
investigation is needed to address these factors.

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(The Appendix follows overleaf.)


BPMJ Appendix 1
23,5
Construct Itemsa Source

1. Explorative Explorative.lrn1: in information search, employees focus on Atuahene-Gima and


Learning acquiring knowledge of project strategies that involve Murray (2007),
982 experimentation and high market risks Gebauer et al. (2012)
Explorative.lrn2: employees prefer to collect information with no
identifiable strategic market needs to ensure experimentation in
the project
Explorative.lrn3: employees aim to acquire knowledge to develop
a project that led us into new areas of learning such as new
markets and technological areas
Explorative.lrn4: employees collect novel information and ideas
that are beyond our current market and technological experiences
Explorative.lrn5: employees aim to collect new information that forces
us to learn new things in the product/service development project
Explorative.lrn6: employees classify and internalize the acquired
knowledge
2. Improvisational Impro.crt 1: employees demonstrate originality in their work Valaei (2017), Valaei
creativity Impro.crt 2: employees respond in the moment to unexpected and Rezaei (2017),
problems Valaei et al. (2017)
Impro.crt 3: employees figure out processes as they go along
Impro.crt 4: employees carry out processes with little preparation
3. Compositional Com.crt1: employees make suggestions on incremental changes to Valaei (2017)
creativity existing processes/products that are useful to the organization
Com.crt 2: employees extend and build on what was currently
done or what is currently done by the organization
Com.crt 3: employees refine how things are currently done/what is
currently done at the company
Com.crt 4: employees suggest ideas that improve upon existing
processes, or products and services
4. Innovation Innovation1: novel and useful processes and products are adopted Valaei (2017), Valaei
from an outside organization by my company and Rezaei (2017),
Innovation 2: novel and useful processes and products are Valaei et al. (2017)
successfully implemented by my company
Innovation 3: novel and useful processes and products have
become a stable and regular part of the organization
Innovation 4: novel and useful processes and products are
developed by my company
Innovation 5: novel and useful processes and products are
produced by my company
Table AI. Notes: aSeven-point Likert Scale: “strongly disagree, disagree, somehow disagree, neutral, somehow agree,
Measurement items agree, and strongly agree”
Appendix 2 Explorative
learning
strategy
Fit criteria Value HI95

SRMR 0.066 0.082


dULS 0.632 0.977
dG 0.332 0.406 983
Notes: HI95 ¼ 95 percent of bootstrap quantile. Model assessment criteria: SRMRo95 percent of bootstrap
quantile (HI95 of SRMR), dULS o95 percent of bootstrap quantile (HI95 of dULS), and dG o95 percent of Table AII.
bootstrap quantile (HI95 of dG) Goodness of model fit

Appendix 3

Path Original sample SE T-statistics p-Value

Explorative learning → compositional creativity 0.237 0.060 3.953 0.000***


Explorative learning → innovation 0.284 0.056 5.040 0.000***
Improvisational creativity → innovation 0.124 0.045 2.763 0.006*** Table AIII.
Note: ***p o0.01 Indirect effects

Corresponding author
Naser Valaei can be contacted at: naservalaei@gmail.com

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