Organisational Innovation by Manufacturing SMEs in Vietnam

  • Kana HaraguchiEmail author
Part of the Kobe University Monograph Series in Social Science Research book series (KUMSSSR)


This chapter focuses on organisational innovation in Vietnam’s private domestic SMEs (small- and medium-scale enterprises) and examines determinants of organisational innovation and its effects on firm performance. We use the SME survey of 2015, which is also employed in the longitudinal data in Chap.  2. However, in this chapter, we introduce some new ideas. First, unlike in other chapters, we examine organisational innovation; second, we employ a different method (propensity score matching analysis) for empirical analysis; and, third, a combination of quantitative analysis and qualitative firm interview surveys gives the study a vivid image and enhance its significance. More specifically, ISO9001 certification is regarded as an organisational innovation and human capital (higher education of entrepreneurs and workers), social capital (business association membership) and other innovations (other certifications or investments in equipment/machinery) are found to be significant determinants. This type of innovation influences firm’s business scale in terms of profit, value added, labour as well as TFP. Yet, it has no effect on labour productivity and Return On Assets (ROA) . We also found that almost all ISO9001 certified firms introduced Kaizen/5S, a Japanese management system, which works well with the former to enhance the firms’ innovation system and gain new customers.


Vietnam Propensity score matching analysis Organisational innovation ISO9001 Kaizen/5S 


  1. Armbruster, H., Bikfalvi, A., Kinkel, S., & Lay, G. (2008). Organizational innovation: The challenge of measuring non-technical innovation in large-scale surveys. Technovation, 28(10), 644–657.CrossRefGoogle Scholar
  2. Brand, J. E., & Halaby, C. N. (2006). Regression and matching estimates of the effects of elite college attendance on educational and career achievement. Social Science Research, 35(3), 749–770.CrossRefGoogle Scholar
  3. Brunet, A. P., & New, S. (2003). Kaizen in Japan: an empirical study. International Journal of Operations & Production Management, 23(12), 1426–1446.CrossRefGoogle Scholar
  4. Calza, E., Goedhuys, M., & Trifković, N. (2018). Drivers of productivity in Vietnamese SMEs: The role of management standards and innovation. Economics of Innovation and New Technology, 0(March), 1–22.Google Scholar
  5. Du, Y., Yin, J., & Zhang, Y. (2016). How innovativeness and institution affect ISO 9000 adoption and its effectiveness: evidence from small and medium enterprises in China. Total Quality Management and Business Excellence, 27(11–12), 1315–1331.CrossRefGoogle Scholar
  6. Higuchi, Y., Nam, V. H., & Sonobe, T. (2015). Sustained impacts of Kaizen training. Journal of Economic Behavior & Organization, 120, 189–206.CrossRefGoogle Scholar
  7. Imai, M. (1997). Gemba Kaizen: A commonsense approach to a continuous improvement strategy (2nd ed.). Mc Graw Hill.Google Scholar
  8. IMF. (2017). World Economic Outlook Database April 2017—IMF. Retrieved from
  9. ISO. (n.d.). ISO 9000—Quality management. Retrieved from
  10. ISO. (2015). Quality management principles. 2015, 20.Google Scholar
  11. ISO. (2017). 9. ISO Survey of certifications to management system standards—Full results. Retrieved from
  12. Koc, T. (2007). The impact of ISO 9000 quality management systems on manufacturing. Journal of Materials Processing Technology, 186(1–3), 207–213.CrossRefGoogle Scholar
  13. Lam, A. (2006). Organizational innovation. In The Oxford handbook of innovation.Google Scholar
  14. Martínez-Costa, M., Martínez-Lorente, A. R., & Choi, T. Y. (2008). Simultaneous consideration of TQM and ISO 9000 on performance and motivation: An empirical study of Spanish companies. International Journal of Production Economics, 113(1), 23–39.CrossRefGoogle Scholar
  15. Nübler, I. (2014). A theory of capabilities for productive transformation: Learning to catch up. In TRANSFORMING ECONOMIES Making industrial policy work for growth, jobs and development (pp. 113–149).Google Scholar
  16. Pufahl, A., & Weiss, C. R. (2008). Evaluating the effects of farm programs: Results from propensity score matching. In: 12th Congress of the European Association of Agricultural Economists-EAAE 2008, 1–11.Google Scholar
  17. Rahman, S. (2001). A comparative study of TQM practice and organisational performance of SMEs with and without ISO 9000 certification. International Journal of Quality & Reliability Management, 18(1), 35–49.CrossRefGoogle Scholar
  18. Rosenbaum, P. R., & Rubin, D. B. (1983). The central role of the propensity score in observational studies for causal effects. Biometrika, 70(1), 41–55.CrossRefGoogle Scholar
  19. Shehu, A., & Sidique, S. F. (2014). A propensity score matching analysis of the impact of participation in non-farm enterprise activities on household wellbeing in rural nigeria. UMK Procedia, 1(October 2013), 26–32.CrossRefGoogle Scholar
  20. Sonobe, T., & Otsuka, K. (2014). Cluster-based industrial development: Kaizen management for MSE grouth in developing countries. Palagrave macmillan.Google Scholar
  21. Starke, F., Eunni, R. V., Manoel Martins Dias Fouto, N., & Felisoni de Angelo, C. (2012). Impact of ISO 9000 certification on firm performance: Evidence from Brazil. Management Research Review, 35(10), 974–997.CrossRefGoogle Scholar
  22. Tran, H. T. T. (2015). Challenges of Small and Medium-Sized Enterprises (SMEs) in Vietnam during the process of integration into the ASEAN Economic Community (AEC). International Journal of Accounting and Financial Reporting, 5(2), 133.CrossRefGoogle Scholar
  23. UNU-WIDER. (n.d.). Database Viet Nam SME database. Retrieved from
  24. World Bank. (n.d.). World development indicators. Retrieved from
  25. World Bank. (n.d.). ‘Vietnam: Achieving success as a middle-income country’ Retrieved from
  26. WTO. (n.d.). Vietnam and the WTO. Retrieved from

Copyright information

© Springer Nature Singapore Pte Ltd. 2019

Authors and Affiliations

  1. 1.Kobe UniversityKobeJapan

Personalised recommendations