PurposeThe purpose of this research is to examine the effect of kaizen culture on innovation and operational performance of electrical and electronic manufacturing companies in Malaysia. A research framework, with underpinning theories of dynamic capabilities and socio-technical systems, was conceptualized to investigate the interplay of these relationships.Design/methodology/approachData were collected from 123 manufacturing companies using an online survey and analyzed with IBM SPSS Statistics version 24.0 and the partial least squares structural equation modeling (PLS-SEM) (SmartPLS) version 3.2.8.FindingsUltimately, the findings proved that kaizen culture is crucial for organizations to optimize their operational performance and can be nurtured through the implementation of process innovation and organizational innovation.Originality/valueUnlike past studies, this research examines the concepts of innovation, kaizen culture and operational performance in a single study; thus, provides further opportunities for new discoveries through such relationships. Also, the novelty is identifying that kaizen culture can be nurtured via innovation.

Kaizen culture and Innovation are key competitive factors deeply imbued into the organizational products and processes to achieve optimal operational performance sustainably. Literature suggested that manufacturing companies needing to differentiate themselves adopt a culture of continuous improvement (Kaizen). Kaizen culture in this paper enables a change process in a seamless manner supporting innovation to optimize operational performance. This study aims to support theory and practice. Firstly, this study findings can be applied to improve operational performance which is pivotal to business sustainability among Malaysian Manufacturing Companies (MMC). Secondly, it also contributes to extend the Socio-Technical Systems (STS) theory. Thirdly, this study has the potential contribution towards the society as resources are scarce and waste elimination is imperative. Lastly, this study may provide some understanding on why these companies are more successful in securing operational performance from innovation implementation than other seemingly similar companies.

Kaizen culture is extremely crucial for manufacturing companies operating in the electrical and electronics (E&E) industry in Malaysia. The productivity gains of the E&E industry is on a gradual downward trend, made worse by the current Covid-19 pandemic crisis. However, this trend could be arrested if kaizen culture is nurtured within the organization. Having kaizen culture will foster a culture of continuous improvements which is essential for productivity, thus increasing operational performance. The main aim of this study is to examine the impact of kaizen culture on operational performance as well as establishing the key attributes of kaizen culture. The data was collected through a survey conducted on 248 E&E manufacturing companies of which 127 responded. Results indicated kaizen culture having a significant positive influence on operational performance. Among the four key attributes of kaizen culture, management support ranked the highest, while kaizen promotion office ranked the lowest. For practitioners, this study confirmed that kaizen culture is vital for the optimization of operational performance to increase global competitiveness.