Māori Firms Achieving Superior Innovation via their Cultural Capital

Professor Jarrod Haar - IIRC20
Friday, November 20, 2020

How do Māori firms achieve superior innovation? Via their cultural capital Despite the growth in attention towards the Māori economy and Māori business generally, there is scarce empirical evidence describing its attributes and activities. New Zealand has a vibrant and growing indigenous population (Māori) who have historical business acumen, but little is known about their contemporary activity in private business and associated links between Māori firms and performance.

While there are numerous strategic management theories to explain firm performance, the current study focuses on the firm resources, which are often characterised as key factors reflecting organisational/managerial assets including competencies, knowledge and skills etc. Specifically, we focus on intellectual capital (Singh & Rao, 2016), which broadly reflect the knowledge resources within a firm, which aligns with the Resource Based View of the firm. Singh and Rao (2016) state “it is maintained that a unique configuration of knowledge resources in the form of intellectual capital enhances firms’ capability to renew its resource base and empowers them to develop their dynamic capabilities to win the market” (p. 130). Here we focus on three forms of capital: Human Capital, reflecting a firm’s workforces ability to continuously acquire new job-related knowledge, Relational Capital, reflecting a firm’s workforces ability toward mutual collaboration and problem solving, and Cultural Capital, which we define as reflecting a firm’s workforce knowledge and skills towards working with and respecting Māori cultural values.

The constructs had Confirmatory factor Analysis done in AMOS (structural equation modelling), and analysis completed in SPSS using the PROCESS (V. 3.4) macron, controlling for firm size. Overall, a number of direct effects, mediation effects and moderation effects were found including moderated mediation. In summary, human capital and cultural capital both shape relational capital, with the highest relational capital being achieved by Māori firms when they have high human and cultural capital. The final moderated mediation
effects show that while human capital is significant as is relational capital, for Māori firms with stronger cultural capital, this indirect effect strengthens as cultural capital gets stronger. Hence, the key for product innovation success for Māori firms is to hire the right people, develop their collaboration, and the firms cultural focus, as this is crucial to leveraging these components to overall success.