Unraveling the Determinants and Consequences of an Inn Ovation-Supportive Organizational Culture

Article excerpt

The current research identifies constructs that are supportive of an innovative culture in small to medium-sized enterprises. A sample of 429 employees in 23 small to medium-sized manufacturing firms was used to identify constructs associated with an innovative culture. Supervisory support and reward system support are both positively related to an innovative culture. Perceived work overload is negatively related. Companies with cultures supportive of innovation tend to be smaller, have fewer formalized human resource practices, and less munificent resources. There is no direct relationship between an innovative culture and firm performance; however, when the competitive environment is changing rapidly firm earnings are enhanced by an innovative culture.

There is an abundance of literature that expounds on the importance of creativity and innovation to keep organizations healthy, viable, and competitive. A relatively smaller body of research focuses on the organizational characteristics that lead to innovation. For example, Woodman, Sawyer, and Griffin (1993) proposed that organizational culture, rewards, and resources are determinants of creative behavior in organizations. Similarly, Amabile, Conti, Coon, Lazenby, and Herron, (1996) found that the perceived work environment influences the level of creativity in organizations. Damanpour (1991), in a study of the antecedents of organizational innovation, found that managerial attitude toward change, and internal and external communication were positively related to innovation. Given the relevance of organizational culture to innovation, the managerial and human resource practices associated with an "innovation-supportive culture" become a subject of research interest. As Woodman et al. note, "we ... know litt le about how organizations can successfully promote and manage individual and organizational creativity" (1993, p. 316).

Although not explicitly stated, much of the existing literature assumes that it is important and desirable to foster creativity and innovation in all organizations (e.g., Lumpkin & Dess, 1996; Covin & Slevin, 1991; Zahra, 1993, 1994; Lawless & Anderson, 1996) and does not address the question of under which circumstances a culture supportive of innovation is associated with positive organizational-level outcomes. However, Chandler (1993) points out that some organizations perform better when key employees believe they are rewarded for being innovative, while other organizations perform better when key employees believe they are rewarded for conforming to the rules and not being very innovative.

The objective of this paper is not to examine the link between an "innovation-supportive culture" and innovation. That work has been done previously by the authors cited in the preceding paragraphs. Our objective is to address some of the "holes" in the literature and to seek to better understand the managerial practices and other factors associated with an innovation-supportive culture and to assess the "fit" between an organization's environment and its culture.

This study addresses these issues by examining the managerial and human resource practices that are associated with an organizational culture perceived to be supportive of innovation. Specifically, we examine three aspects of organizational culture that theory suggests are important for the development of an innovation-supportive culture and investigate the specific managerial and human resource practices that promote the development of those three aspects of culture. We then investigate the external environment of the firm, its impact on culture, and the "fit" between organizational culture and the environmental context. The current study is organized around five research questions:

(1) Are employee perceptions of supervisory support, perceptions of the extent to which organizational reward systems are supportive of innovation, and perceptions of workload pressures among employees associated with perceptions of support for innovation? …