A Framework for Enhancing Innovation in Iran’s Automotive Industry: Transitioning from Traditional Corporate Governance to Smart Governance

Subject Areas :

Seyed Mehdi Alvani ¹ , HAMID FOROOZANFAR ^{2 *} , hooman foroozanfar ³

1 - Department, Faculty member of management and accounting department, Allameh Tabataba'i University, Tehran, Iran
2 - Department of Entrepreneurship Management, Faculty of Management, Islamic Azad University of Science and Research, Tehran, Iran
3 - Department of Entrepreneurship Management, Faculty of Management andAccounting, Islamic Azad University, Qazvin Branch, Qazvin, Iran

Received: 2024-10-09 Accepted : 2025-05-10 Published : 2025-05-05

Keywords: Corporate Governance, Smart Governance, Innovation, Automotive Industry,

Abstract :

In the era of digital transformation and global competition, innovation is recognized as a critical factor for enhancing the competitiveness of industries, especially in the automotive sector. In this regard, corporate governance and smart governance are key tools for developing the necessary infrastructures to promote innovation. This study aims to identify a framework for improving innovation in Iran’s automotive industry by examining global experiences and adapting them to local conditions, offering an effective model for transitioning from traditional corporate governance to smart governance. A review of the literature indicates that factors such as transformational leadership, supportive policies, change management, the adoption of smart technologies, and a focus on organizational culture play a pivotal role in fostering innovation.

The research methodology is based on a systematic review and analysis of findings from relevant studies in the fields of the automotive industry and smart governance. The findings reveal that modern governance approaches, through strengthening digital infrastructures, enhancing transparency in organizational processes, and improving data-driven decision-making, can pave the way for increasing innovation capacity in Iran’s automotive industry. Successful implementation of this framework requires a shift in managerial perspectives, strengthening collaboration among key industry stakeholders, and leveraging advanced knowledge management models.

The study concludes that smart governance has a positive and significant impact on empowering Iran’s automotive industry. The implementation of this framework not only establishes innovation as a lever to enhance organizational performance and competitiveness but also, in the long term, can elevate Iran’s position in the global automotive value chain.

References:

Arora, A. S., Saboia, L., Arora, A., & McIntyre, J. R. (2025). Human-Centric Versus State-Driven: A Comparative Analysis of the European Union's and China's Artificial Intelligence Governance Using Risk Management. International Journal of Intelligent Information Technologies (IJIIT), 21(1), 1-13.‏

de Almeida, P. G. R., & dos Santos Júnior, C. D. (2025). Artificial intelligence governance: Understanding how public organizations implement it. Government Information Quarterly, 42(1), 102003.‏

Elsayed, A. M., Zhao, B., Goda, A. E. M., & Elsetouhi, A. M. (2023). The role of error risk taking and perceived organizational innovation climate in the relationship between perceived psychological safety and innovative work behavior: A moderated mediation model. Frontiers in Psychology, 14, 1042911.

Hung, H. T. (2025). Exploring China’s cyber sovereignty concept and artificial intelligence governance model: a machine learning approach. Journal of Computational Social Science, 8(1), 24.‏

Fan, Y. J., Liu, S. F., Luh, D. B., & Teng, P. S. (2021). Corporate sustainability: Impact factors on organizational innovation in the industrial area. Sustainability, 13(4), 1979.

Farrukh, M., Raza, A., & Waheed, A. (2023). Your network is your net worth: Political ties and innovation performance. European Journal of Innovation Management, 26(1), 256–264.

Fındıklı, M. A., Yozgat, U., & Rofcanin, Y. (2015). Examining organizational innovation and knowledge management capacity: The central role of strategic human resources practices (SHRPs). Social and Behavioral Sciences, 181, 377–387.

Kijkasiwat, P., Hussain, A., Nisar, U., & Liew, C. Y. (2023). The mediating effect of innovation on the relationship between corporate governance and firm performance: Evidence from developed and developing countries. Asian Academy of Management Journal.

Narang, N., Gupta, S., & Tripathy, N. (2025). Dynamics of corporate governance and dividend policy alliance: a meta-analytical approach. Corporate Governance: The International Journal of Business in Society, 25(2), 180-210.‏

Papagiannidis, E., Mikalef, P., & Conboy, K. (2025). Responsible artificial intelligence governance: A review and research framework. The Journal of Strategic Information Systems, 34(2), 101885.‏

Zhang, M., Cheng, R., Fei, J., & Khanal, R. (2024). Enhancing digital innovation ecosystem resilience through the interplay of organizational, technological, and environmental factors: A study of 31 provinces in China. Sustainability, 16(5), 1946.

Zhang, Y., Sun, J., Yang, Z., & Wang, Y. (2020). Critical success factors of green innovation: Technology, organization and environment readiness. Journal of Cleaner Production, 121701. https://doi.org/10.1016/j.jclepro.2020.121701

YahiaMarzouk, Y., & Jin, J. (2022). Linking environmental scanning and organizational innovation with competitive advantage: Evidence from Egyptian SMEs. Management & Sustainability: An Arab Review, 1(2), 170-195.