Investigating the Impact of Lean Management on Innovation in Vietnamese SMEs

Abstract

Internationalization in society and economy has fostered promptly the production volumes and product diversification due to the complexity in customers’ design. Lean management has been known as effective and efficient tools in the management of customer value by reducing cost of the resources necessary to achieve the needs of customers. Today innovation has been considered as driving force of business success in every industry in the context of high competition. The link between lean management and innovation capability has been recently proposed in some literatures, which show that some aspects of lean management may negatively affect and some may positively affect a company’s capability to be successful with certain types of innovations. This paper develops a framework to analyze the impact of lean management on innovation capability in Vietnamese small and medium enterprises. Five propositions has been presented and tested in the sample of 122 SMEs engaged in lean management. The findings suggest that due to implementation of lean management the changes of organizational structure and inter-departmental coordination have positive effect and the changes of human resources management and organizational culture have negative effect on the innovation capability.