Creativity and Firm-Level Performance: The Mediating Effects of Action Orientation

By Weinzimmer, Laurence G.; Michel, Eric J. et al. | Journal of Managerial Issues, Spring 2011 | Go to article overview

Creativity and Firm-Level Performance: The Mediating Effects of Action Orientation


Weinzimmer, Laurence G., Michel, Eric J., Franczak, Jennifer L., Journal of Managerial Issues


Creativity was identified as the single most important attribute to future business success in a recent study that interviewed over 1,500 CEOs from 60 nations and 33 industries (IBM, 2010). Despite its popularity in industry, researchers have yet to find a conclusive empirical relationship showing that creativity impacts firm-level performance. A possible explanation is that while creativity may impact performance at many levels, it is the firm's ability to actually enact creativity that impacts firm-level performance.

Over the past thirty years, researchers have significantly advanced the collective understanding and knowledge of creativity as a latent construct and its impact on organizations, yet have limited attempts in linking creativity and firm-level performance. Considering that the vast majority of creativity research is grounded in the organizational behavior domain, there is significant opportunity for researchers to examine creativity across multiple levels of analysis, including organization theory and strategic management. The primary focus of this study is to offer empirical validation of the mediating effects of action orientation on the creativity-performance relationship.

Two possible rationalizations may exist regarding limited success in empirically assessing the link between creativity and performance. First, confusion exists between the concepts of creativity and innovation. Creativity has been defined as the production of original and functional ideas, while innovation has been defined as the employment of those ideas (c.f. Amabile, 1983, 1988). Innovation is the result of creativity (Amabile et al., 1996). However, researchers and managers use the concepts of creativity and innovation interchangeably. Although related, creativity and innovation are fundamentally and operationally different constructs. The creativity literature primarily operationalizes creativity as a psychological or latent construct (Amabile et al., 1996). In contrast, the innovation literature primarily operationalizes innovation using: (1) objective output measures such as new product/process introduction (Lyon and Ferrier, 2002), (2) awards and intellectual property such as patents (Griliches, 1990; Jaffe et al., 1998), and (3) objective input measures such as R&D expenditures (Singh, 1986). While the focus of the present study is to examine creativity, a discussion of implications regarding the creativity/innovation debate is offered in the implications section for future research.

Second, researchers have tested the direct relationship between creativity and performance; however, creativity may only have a modest impact on performance. Note that decades worth of research on innovation and intrapreneurship have discussed numerous benefits to firms that implement new innovations (c.f. Carrier, 1996; Goosen et al., 2002; Pinchot, 1985, 1987; Zahra, 1993, 1995). Using the same argument, this paper will investigate the possibility that the relationship between creativity and performance is mediated by the firm's ability to implement creative ideas.

CREATIVITY

Several significant studies have shaped the construct of creativity. Woodman et al. (1993) hypothesized creativity as a multilevel construct consisting of ten interrelated factors and directly linked individual creative performance to organizational creative performance. In this model, organizational creative performance was theoretically influenced by an array of characteristics including organizational culture, leadership, and organizational strategy. While previous studies only considered micro-level characteristics of creativity, examining creativity from a firm-level perspective, namely, examining creativity on firm-level performance, can holistically increase the understanding of creativity.

A comprehensive review of the extant creativity literature yields several attempts to empirically validate factors from the Woodman et al. (1993) study. Whereas creativity is a well-documented cultural phenomenon at individual (Amabile, 1997; Perry-Smith, 2006) and group levels (Amabile and Conti, 1999; Bain et al., 2001; Vera and Crossan, 2005), very few scholars have examined creativity as a cultural attribute from a strategic management perspective, let alone examine the relationship between creativity and organizational performance.

This is surprising considering that numerous researchers (Neuman and Wright, 1999; Woodman et al., 1993) have called for creativity studies to embrace multiple levels of analysis in order to understand the complexities associated with creativity. Taggar's (2002) work was the first study to empirically examine the simultaneous impact of individual and group level antecedents of team performance and to offer a model of creativity from a meso-perspective, yielding a latent variable model of team performance. Recently, Hargadon and Bechky (2006) developed a multiple-level theoretical model of individual and group level collective creativity and Hennessey and Amabile (2010) theorized a seven-level model of creativity ranging from neurological to an organizational-level systems approach. Of the few studies that have analyzed creativity at the organizational level (Bain et al., 2001; Burkhardt and Brass, 1990; Katz and Allen, 1985), these studies have considered creativity as the dependent variable.

Creativity-Performance Relationship

With regard to the relationship between creativity and performance, previous studies have indicated inconsistent means in which to measure performance. This is due, in part, to the three levels of analysis researchers are employing to define the construct. From an individual level of analysis, performance is quantified as demonstrated creativity (Perry-Smith, 2006) and quality (Elsbach and Hargadon, 2006) in individual employee work outcomes. Performance from the group level of analysis has been quantified through several non-financial means. Elsbach and Hargadon (2006) denoted low absenteeism among group members contributing to increased group performance. Gilson et al. (2005) determined performance by measuring machine reliability, customer response time, and replacement parts expense among service technician teams. Vera and Crossan (2005) identified group performance as teamwork quality.

To date, only one study has attempted to empirically examine the relationship between creativity and organizational level performance. Von Nordenflycht (2007) observed a relationship between creativity and performance in 122 U.S. advertising agencies determining a positive, linear relationship between creativity and performance. It is argued that creativity results in competitive differentiation, resulting in firm-level success. In this study, performance was measured by three-year growth rates. However, results regarding the relationship between creativity and performance only explained minimal variance. Other previous research has yielded limited success when examining the relationship between performance factors such as revenue or profitability (c.f. Harper and Becker, 2004; Von Nordenflycht, 2007).

ACTION ORIENTATION AS A MEDIATOR

This paper argues that simply being creative is not sufficient in understanding the creativity-performance link. Similar to the psychology literature, the strategy literature also needs to consider the firm's ability to act on creative attributes. For example, if a firm has a strong focus on creativity, this does not mean that managers will enact the strategy. Rather, it is the firm's ability to take action that may determine the extent to which creativity impacts firm performance. Stated differently, a firm's propensity to take action--as a behavioral attribute--will mediate the relationship between creativity and firm performance.

Action orientation has been defined as individuals being able to make decisions and implement their cognitions, emotions, and behaviors in order to complete specific business related goals (Jaramillo and Spector, 2004). Subsequently, workers possessing initiative also led to higher levels of firm performance (Rashid et al, 2004; Stanley et al, 2005). Action-oriented group processes are also examined and thought to produce higher group performance (Johnston et al., 2007).

While research on action orientation is somewhat operationally limited in the organizational behavior literature, in the creativity literature it is virtually non-existent. Dobni and Luffman (2000) noted in their research that achieving sustainable competitive advantage is achieved by implementing strategy, not by formulating it. While there is limited discussion in the strategy implementation literature concerning action orientation, there is discussion of ability to change as a cultural dimension that may impact firm-level performance. Therefore, it is important to delineate any misunderstandings concerning similarity or confusion between the definition of action orientation and change.

Acceptance of change is the propensity to tolerate the changing environments and coming to terms with the need to change. In comparison, action orientation encompasses ability to take risk and action and implement change. Therefore, one would expect a relationship between change and action orientation. However, conceptually, there are differences. For example, a firm may have a strategy that focuses on maintaining the status quo, where action orientation could meditate the relationship between the status quo strategy and firm performance. At the same time, this firm may score relatively low on its propensity to change. So, even though the culture literature recognizes the acceptance of change as a cultural attribute, linking it to implementing technological, organizational, social, and personal change (Rashid et al., 2004; Stanley et al., 2005) conceptually is not the same as action orientation.

Thus, the present study attempts to develop an organizational-level measure of action orientation and to assess the degree to which this measure mediates the relationship between creativity and firm-level performance. Specifically, the purpose of this study is to address issues relating to the relationship between creativity, action orientation, and performance. First, this paper provides rationale for the mediating effects of action orientation on the creativity-performance relationship. In order to empirically demonstrate the mediating effects of action orientation on the creativity-firm performance relationship, it will be necessary to establish content validity and criterion-related validity of the action orientation measure by drawing on the organizational behavior literature to create specific dimensions of action orientation. Finally, this study concludes by delineating practical implications for researchers and professionals interested in examining the future creativity-performance relationships.

DEVELOPMENT OF HYPOTHESES

Firm-Level Performance

Research examining latent constructs such as culture and creativity and their impact on performance has considered performance as a multidimensional phenomenon. When examining firm-level performance specifically, organizational culture research has focused on measures of financial performance. Three measures of financial performance have been used in the creativity and/or innovation literature, including revenue growth (Deshpande et al., 1993; Von Nordenflycht, 2007), profit growth, and return on assets (ROA) (Chandler et al, 2000; Deshpande et al, 1993; Geroski, 2000). Specifically, Chandler and Hanks (1993) provided a validation study that empirically demonstrated the use of revenue and profit data as reliable measures when testing the impact of various strategies on firm-level performance. Therefore, to be consistent with previous research, this study also considers firm-level performance as a multidimensional phenomenon by including revenue growth, profit growth, and growth in ROA.

This study also assesses performance measures longitudinally, as the benefits of creativity may not be realized immediately. There is a substantial amount of research in the strategic management literature that considers the relationship between specific strategies and lagged measures of financial performance (Baliga et al, 1996; Hill et al, 1992). Three and five-year periods were chosen, as they are the most common time frames found in the strategic management literature.

Creativity, Action Orientation, and Performance

As seen in Figure 1, in order to test whether action orientation mediates the creativity-performance link, relationships must be demonstrated between: (1) creativity and performance; (2) creativity and action orientation; and (3) action orientation and performance (c.f., Baron and Kenny, 1986; MacKinnon et al., 2007).

Creativity leads to competitive advantage, which helps a company succeed in terms of multiple measures of firm-level financial performance (Deshpande et al, 1993). Note that previous research has already established the use of growth in revenues, profits, and ROA (c.f., Chandler and Hanks, 1993) as valid and reliable measures of firm-level performance.

In terms of revenue growth, organizations that exhibit creative behaviors generate competitive advantages (Woodman et al., 1993). Numerous studies have argued that competitive advantage leads to improvements in financial performance such as revenue growth (c.f., Barney, 1986; Porter, 1985). Specifically, Von Nordenflycht (2007) found modest empirical support for the impact of creativity on revenue growth rates.

In terms of profit growth and return on assets, creativity may often increase the short-term cost in an organization. Implementing new ideas to existing products and services may be expensive and not yield positive returns for an organization. However, over time, new ideas have the potential to increase profit growth in organizations (Calori and Sarnin, 1991). Moreover, Geroski (2000) suggested that firms will notice an increase of profit growth when encouraging creative behaviors. Thus, organizations that encourage creativity should experience increase in profit growth, and subsequently ROA, if sufficient time is observed.

While previous research has only found modest effects between creativity and financial performance, this study argues that introducing action orientation as a mediator will strengthen this relationship. Stated differently, a firm's ability to enact creativity, measured as a latent construct, will have a significant impact on financial performance.

Creativity is the proactive pursuit of new and innovative ideas that improve or change the status quo (Woodman et al, 1993). Action orientation is defined as the pursuit of proactive initiatives to enact change (Utsch et al., 1999). Therefore, given that creativity is a catalyst for change, combined with the definition that action orientation is the proactive pursuit of implementing change (Koole and Jostman, 2004; Utsch et al., 1999), there should be a positive relationship between creativity and action orientation, as creativity becomes an antecedent to action orientation. This does not imply, however, that creativity is a requisite for action orientation, as firms can have a high degree of action orientation to implement strategies that do not result from creative solutions. Note that specific hypotheses are not developed for this relationship, as the primary intent of this study is to assess the extent to which action orientation mediates the creativity performance relationship.

Finally, the only studies attempting to link action orientation to performance have defined performance at the individual level. Specifically, Diefendorff (2004) was able to empirically demonstrate that action orientation at the individual level was related to individual performance. Similarly, Bagozzi et al. (1992) attempted to link or describe roles of action orientation (ability to act) with state orientation (remaining inert). While this link may not initially appear to be pertinent to the creativity research, it shows action-orientation leads to improved performance.

[FIGURE 1 OMITTED]

Given that the present study investigates performance at the firm level, it is necessary to draw on the strategic-management implementation and innovation-management literatures to demonstrate the link between action orientation and financial performance. From a strategic-management perspective, Govindarajan (1988) argued that the ability to implement strategy--take action--leads to improved firm-level financial performance. Similarly, from the innovation-management literature, Klein and Sorra (1996) suggested that the ability of an organization to implement innovation or creativity should lead to improvements in performance. This is evidenced in numerous studies that demonstrate benefits to firms that implement new innovations (c.f. Carrier, 1996: Goosen et al., 2002; Pinchot, 1985, 1987; Zahra, 1993, 1995).

The strategic-management and innovation-management literatures parallel each other with regard to taking action and its impact on organizational performance. Subsequently, it is important for managers to understand and intentionally exert behaviors and take actions to implement innovation and learning in order to influence performance (Levitt and March, 1988; Miner, 1990).

Therefore, based on the theoretical links between creativity and performance, creativity and action orientation, and action orientation and performance, this study states the following hypotheses:

H1: Action orientation mediates the relationship between financial performance and creativity.

H1a: Action orientation mediates the relationship between revenue growth and creativity.

H1b: Action orientation mediates the relationship between profit growth and creativity.

H1c: Action orientation mediates the relationship between ROA growth and creativity.

MEASUREMENT DEVELOPMENT

Content Validity

Action Orientation. In order to develop a measure of action orientation, it will be necessary to establish initial content validity. To establish this, an exhaustive review of the current literature was completed. While O'Reilly et al. (1991) created a variable described as "outcome orientations" as a cultural attribute in the Organizational Culture Profile, the majority of researchers in the organizational behavior (OB) literature (c.f., Bagozzi et al, 1992; Jaramillo and Spector, 2004) examined action-orientation in terms of action orientation (readiness to take action) versus state orientation (propensity to stagnate).

Developing a list of common action orientation attributes is important for developing a consistent measure that can be operationalized along distinct, repeatable dimensions. Table 1 provides a summary of studies attempting to operationalize action orientation in different contexts.

A list of potential survey items was developed to measure action orientation by drawing on the concepts of previous research and changing the unit of analysis from the individual to the organization. After completing a two-study assessment of this construct, a five-item scale was validated. Participants were asked to assess their organizations on the following five dimensions: "Our company takes action rather than overanalyzing a situation," "Plans are implemented in a timely manner," "Our company is ready to take action," "Operational improvements is consistently emphasized," and "Formalized rules and policies do not stand in the way of progress." Table 2 lists the items used to develop an organizational-level action orientation measure.

Creativity. Numerous studies have measured creativity. Based on previous research, this study used a four-item scale similar to the Amabile et al. (1996) study. The first item, "Excessive attention to detail does not interfere with my ability to generate new ideas," was based on scales created by Amabile et al. (1996), George and Zhou (2007), and Perry-Smith (2006). The second item, "Employees are allowed to be creative in solving problems as they occur," was based on scales developed by Amabile et al. (1996), George and Zhou (2007), Gilson et al. (2005), Taggar (2002) and Perry-Smith (2006). The third item, "Our company emphasizes creativity," was based on scales developed by Amabile et al. (1996), Scott and Bruce (1994), and Zhou and George (2001). The final item, "Our company rewards creative thinking," was based on scales developed by Amabile et al. (1996), Perry-Smith (2006), Scott and Bruce (1994), and Zhou and George (2001). Table 3 lists specific items used to develop a measure for creativity at the organizational level.

Scale Development

To validate scales for both action orientation and creativity, first inter-rater reliability assessments were performed to address the consistency of the potential items (c.f. Carmines and Zeller, 1991). Specifically, a panel of seven experts (defined as academic researchers actively involved in studying organizational culture) was used to match potential individual survey items with the two dimensions. Values greater than 0.70 are typically acceptable for consistency estimates of inter-rater reliability (Crocker and Algina, 1986). Therefore, when an individual item received an inter-rater reliability score of less than 0.70, that item was dropped as a potential survey item. Once the content and agreement of items were established, an initial survey was developed. Respondents were asked to rate the degree to which each statement accurately described their organization (using a five-point Likert scale where 1 = strongly disagree and 5 = strongly agree).

Construct Validity

Two separate studies were completed to develop reliable scales of action orientation and creativity. In the first study, respondents of a large Midwestern service organization completed the survey instrument to measure action orientation and creativity. Specifically, respondents were asked to agree/disagree using the five-point Likert scale in terms of how a particular statement related to their organization. A total of 474 respondents completed the survey.

Encouraging results were found on internal reliability and dimensionality from this initial survey. Internal reliability was measured using the Cronbach's Alpha score. The measures exceeded Nunnally's (1967) stringent threshold of 0.70. Specifically, action orientation had a score of 0.82 and creativity had a score of 0.80. Moreover, to establish discriminant validity between the sub-dimensional scales of this survey, Gaski and Nevin's (1985) procedure for establishing the independence of scales was utilized. They advocated examining the internal reliability estimates of measures and inter-correlations between measures to establish preliminary evidence of independence. If measures have higher internal reliability estimates than their correlations with other scales, evidence of independence is established.

Criterion-Related Validity

In order to replicate the content validity of the measures from Study 1 and to assess the criterion-related validity of the measures, a second study was conducted. Data were collected from employees in a large, technology-based company using the same measures from Study 1. Mail surveys were used to collect survey data for culture and performance. Response rate was 45 percent, yielding 412 responses from 44 profit centers.

An aggregate profit growth and revenue growth measure was used over a three-year period to assess firm-level performance. Note that performance measures were collected for each of the 44 profit centers.

Consistent with Study 1, internal reliability of the action-orientation measure was assessed using Cronbach's Alpha, where action orientation had a score of 0.80 and creativity had a score of 0.82, indicating high reliability of the latent constructs. Moreover, the independence of the sub-dimensions of the measures was examined using Gaski and Nevin's (1985) recommended procedure. In order to assess criterion related validity, relationships between the developed constructs and performance were examined. Additionally, demographics of respondents were controlled for, as previous research has argued that employees' perceptions are impacted by their level in an organization (Kristof-Brown et al, 2005).

Growth rates for profitability and revenue were calculated using 2004-2006 data. Using hierarchical linear regression modeling, it was found that creativity and action orientation were significantly related to performance. Specifically, creativity and action orientation were both significant at the p < 0.01 level.

METHODS

Sampling Issues

The strategy literature suffers from inconsistencies relating to levels of analysis in sampling to assess latent constructs. Many studies have attempted to measure dimensions such as creativity by surveying many individuals in very few companies (Calori and Sarnin, 1991). Conversely, other strategic management researchers have attempted to collect data from large cross-sectional samples, but only collect data from one person per company (Denison and Mishra, 1995). To overcome inconsistencies with previous research, a third study surveyed all employees (as opposed to one employee) in multiple organizations (as opposed to a single organization) in order to assess the mediating relationship of action orientation in the creativity-firm performance link. In the third study, 659 respondents were surveyed from 20 companies.

Control Variables

Three contextual control variables were identified based on previous research. Specifically, the control variables used were company size, company age, and industry performance. Organizational size can have an impact on whether or not creativity is encouraged (Woodman et al., 1993). It may be concluded that company size may obstruct perceptions in the organization about creativity-related behaviors (Chandler et al, 2000).

Organization age may also impact the relationship creativity creates on organization outcomes. As organization age, they establish specific ways of completing tasks that form routines, thereby decreasing the likelihood that creativity will appear as frequently (Ranger-Moore, 1997).

Industry classification may also impact creativity within an organization. Some industries are more likely to support creativity. This may require constant adaptation to realize competitive advantage (Cheney et al., 1991; Lengnick-Hall, 1992; Lyon and Ferrier, 2002). Additionally, industry-level performance is commonly used as a control variable when assessing firm-level performance across industries (Hart, 1995; Reinartz et al., 2004). For example, firms in high-growth industries should be expected to achieve higher growth rates than firms in low-growth industries. Therefore, industry growth rate is used as a control variable.

Hierarchical Regression Analysis

To test for the mediating effects of action orientation of the creativity-performance relationship, hierarchical linear OLS regression modeling was used to test the control model, the direct effects of creativity on performance, and the introduction of action orientation as a mediator. Note that before any regression results were interpreted, a complete set of diagnostic procedures was completed to ensure that this modeling technique was appropriate for these data. Specifically, data were checked for normality, patterns in residuals such as heteroscedasticity, and outliers (cf. Weinzimmerrfoi., 1994). Note that diagnostic procedures were also used when employing regression modeling in Study 2.

RESULTS

In order to test the hypotheses, a cross-sectional sample across 20 eastern and midwestern service, manufacturing, and technology companies was used. The sample included 13 service firms, four manufacturing firms, and four professional firms. Average company age was 59 years and the average size was 244 employees. A minimum of 30 responses per company was required in order to overcome issues regarding normality from previous research. Additionally, only companies with single locations were considered, as latent constructs such as creativity and action orientation may be influenced by subcultures endogenous to multiple locations. This yielded a sample of 659 responses. The methods framework provided by Baron and Kenny (1986) was utilized to test for mediated relationships. Means, standard deviations, correlations, and internal reliabilities are seen in Table 4. Again, measures for creativity and action orientation were highly reliable, with alpha scores of 0.83 and 0.82, respectively.

As seen in Table 5, action orientation was tested to determine if it mediated between creativity and revenue growth. According to the Barron and Kenny (1986) approach, a test to determine a significant relationship between action orientation and creativity was first performed. A significant relationship was found at the p < 0.01 level. Next, creativity and firm performance was tested to determine if there was a significant relationship between them. Creativity was significant at the p < 0.01 level. Finally, the extent to which action orientation mediated the link between creativity and revenue growth was tested by adding action orientation to the previous model. It was found that action orientation provided complete mediation, meaning that when action orientation was added to the final model, creativity was no longer significant and action orientation was significant at the p < 0.01 level, therefore providing support for Hla.

As seen in Table 6, action orientation was tested to determine if it mediated between creativity and profit growth. First, a test was performed to determine if there was a significant relationship between action orientation and creativity. A significant relationship was found at the p < 0.01 level. Next tested was the relationship between creativity and firm performance. Creativity was significant at the p < 0.01 level. Finally tested was the extent to which action orientation mediated the link between creativity and profit growth by adding action orientation to the previous model. Results showed complete mediation of action orientation, meaning that when action orientation was added to the final model, creativity was no longer significant and action orientation was significant at the p < 0.01 level, thereby providing support for Hlb.

As seen in Table 7, action orientation was tested to determine if it mediated between creativity and ROA growth. First, it had to be determined if there was a significant relationship between action orientation and creativity. A significant relationship at the p < 0.01 level was found. Next, it had to be determined if there was a significant relationship between creativity and firm performance. Creativity was significant at the p < 0.05 level. Finally tested was the extent to which action orientation mediated the link between creativity and revenue growth by adding action orientation to the previous model. Results demonstrated that action orientation provided complete mediation, meaning that when action orientation was added to the final model, creativity was no longer significant and action orientation was significant at the p < 0.01 level, thereby providing support for H1 c.

DISCUSSION

The present study sought to establish construct validity of an organizational level measure of action orientation and to show the mediated impact of action orientation between creativity and firm performance. In order to develop this construct validity, content validity was first established through an exhaustive review of the relevant literatures examining creativity and performance. Content validity was further strengthened through inter-rater agreement about the items included in the measure and in Study 1 by establishing the psychometric properties of the measures in terms of internal reliability and factor dimensionality. Study 2 replicated the internal reliability estimates and established tentative criterion-related validity. The developed organizational-level measure of action orientation predicted significant variability of performance at the firm level.

The present research contributes to the strategy literature that studies the link between creativity and performance, as it represents the first attempt at showing the mediating effects of action orientation on the link between creativity and performance. Additionally, the research represents the first full scale attempt to systematically validate a measure of action orientation through the establishment of content and criterion validity. Future research should also establish discriminant validity between the measure and other measures of creativity. It will be difficult to establish any discriminant validity between the measure and other firm-level measures of creativity because there are questions as to whether any previous measures of creativity are statistically valid. The fact that clear and significant statistical relationships were found between the measure established in this paper and financial performance is also notable in and of itself. The aforementioned construct validity issues with existing measures of creativity have resulted in equivocal criterion-related results of other studies. Future research, however, needs to expand the sample size, in terms of the number of organizations sampled and the number of employees sampled within each organization, in order to bolster the findings present in this research.

Future research may also want to investigate other contextual variables that may influence the relationship between creativity and performance by drawing on the innovation and intrapreneurship literatures. As mentioned previously, there is confusion between the creativity literature and the innovation literature. This is surprising, considering numerous researchers denote the eminence of creativity with respect to innovation (Amabile et al., 1996; Gilson et at., 2005; Scott and Bruce, 1994) and new product development (Bain et al., 2001). Several of the most heavily cited conceptual (Amabile, 1983; Woodman et al., 1993) and empirical (Scott and Bruce, i994) creativity studies receive little or no attention in the seminal intrapreneurship works by Carrier (1996) and Pinchot (1985, 1987). Similarly, these same innovation studies receive little or no attention in the creativity literature. Considering the formulation of creative ideas is a widely validated antecedent to the innovation process (Amabile et al., 1996; Elsbach and Hargadon, 2006; Perry-Smith, 2006), it is notable that the literatures appear to remain segregated. Future research may want to look at similarities between these two streams of research. Recognition of action orientation as a mediator moves the creativity literature closer to the innovation literature. A possible frame to integrate creativity and innovation may be the resource-process-value theory introduced by Christensen (2000). Finally, future research on creativity may benefit from investigation of different types of creativity. For example, de Bono's (i990) typology may provide structure. Specifically, he argued that lateral (radical) creativity may evolve over a longer period of time, compared to vertical (incremental) creativity, making short-term profitability difficult. Additionally, Sternberg (2006) suggested a typology of creativity, providing a review of creativity types ranging from the seminal work of Guilford (i950) and Torrance (1962) to the present.

Finally, managers may want to carefully assess the commitment an organization has to implementing creativity ideas when trying to forecast the impact of creativity on firmlevel performance. Additionally, given the valid scales provided in this study, managers have tools to assess their organizations not only in terms of creativity but also in terms of action orientation.

Limitations

The present research has some limitations. First, cross-sectional research was conducted using a single method of data collection (e.g., surveys). Although the firm performance measures in the studies were objective measures of performance gleaned from company financial information, all other data were collected via self-report surveys. Thus, the possibility that some of the results occurred in part from common method bias cannot be excluded. Finally, there is a possibility of non-response bias. However, given that the response rate was 14%, the possibility of non-response bias is minimized (c.f. Fowler, 2002).

CONCLUSION

In conclusion, the present study sought to develop construct validity for action orientation and its effects as a mediator for the creativity-performance link. In doing so, an attempt was made to establish critical facets of validity that allow researchers to answer a basic question: Does the developed measure assess what it says it measures? A measure of action orientation was developed from three empirical studies. Preliminary content validity was established in Study 1. Study 2 established criterion-related validity. Finally, in Study 3, the ability of action orientation to mediate the creativity-performance link was empirically demonstrated. Results encourage future refinement of the developed measure. Also, the findings suggest that further development of action orientation as a mediating variable can be useful in other performance research.

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Laurence G. Weinzimmer (1)

Professor of Strategic Management

Bradley University

Eric J. Michel

Assistant Professor of Management

Bradley University

Jennifer L. Franczak

Doctoral Student

Southern Illinois University

Table 1
umpincal studies Attempting to Measure Action Orientation

Author                      Conceptualization

Bagozzi et al. (1992)       High capacity for enactment of
                            action-related mental structures

Diefendorff et al. (2000)   Persons who are more action
                            oriented are characterized
                            by-enhanced performance efficiency
                            (Kuhl, 1994b) and the ability to
                            complete tasks after minor failures
                            or setbacks

Koole and Jostman (2004)    Action orientation is defined as a
                            metastatic mode of control, in
                            which the enactment of
                            change-oriented intentions is
                            facilitated (Kuhl, 1984)

Kuhl (2000)                 Differentiated between
                            demand-related action orientation
                            (AOD) and threat-related action
                            orientation (ACT) (Kuhl, 2000).

Kuhl (1994a, b)             Content validity of development of
                            action-control scale (ACS)

Morgan and Strong (2003)    Proactiveness was (1) founded by
                            action orientation literature and
                            (2) describes the initiative
                            adopted by firms to continuously
                            search for burgeoning opportunities
                            (Slater and Narver, 1994)

Utsch etal. (1999)          Proactiveness refers to a high
                            degree of initiative as seen in
                            many entrepreneurs. Action
                            orientation used to express ideas
                            of proactiveness in entrepreneurs

Author                      Measurement

Bagozzi et al. (1992)       Used Kuhl's (1985) Decision-
                            related State-versus Action-
                            Orientation Scale

Diefendorff et al. (2000)   Kuhl's (1994a) measure of action-
                            state orientation, the Action
                            Control Scale (ACS). Modified
                            subscales to include: (a) self-
                            regulatory and focus variables; (b)
                            job attitudes and performance

Koole and Jostman (2004)    Measured action orientation using
                            the Action Control Scale (ACS-90).
                            Administered two 12-item subscales
                            of the ACS-90, which measured AOD
                            (Demand related action orientation)
                            and AOT (Threat related action
                            orientation)

Kuhl (2000)                 Created scale using Kuhl's (1985)
                            Decision-related State-versus
                            Action-Orientation Scale

Kuhl (1994a, b)             Original subscale creation of ACS
                            scale included 12 dichotomous items

Morgan and Strong (2003)    Used Proactiveness measure to
                            measure activities of action
                            orientation. Action orientation
                            facilitated when persons plan to
                            implement actions that follow from
                            a decision as seen in the case of
                            many entrepreneurs

Utsch etal. (1999)          To measure action orientation after
                            failure-the extent to which one
                            acts immediately without hesitation
                            developed from Kuhl (1992).

Table 2
Items for Action Orientation Construct

Item from Action
Orientation Scale          Source Material

Our company takes          O'Reilly et al. (1991)
action rather than over-
analyzing a situation

Plans are implemented in   Kuhl (1994a), Diefendorff
a timely manner            et al. (2000), Jaramillo and
                           Spector (2004).

Our company is action-     O'Reilly et al. (1991)
oriented

Operational                Kuhl (1994a), Diefendorff
improvement is             et al. (2000), Jaramillo and
consistently emphasized    Spector (2004).

Formalized rules and       O'Reilly el al. (1991)
policies do not stand in
the way of progress

Item from Action
Orientation Scale          Original Item

Our company takes          "I have a high degree of
action rather than over-   decisiveness."
analyzing a situation

Plans are implemented in   "When f have a lot of
a timely manner            important things to do and
                           they must all be done
                           soon ... I find it easy to stick
                           to the plan."

Our company is action-     "I am action oriented."
oriented

Operational                "Our company continually
improvement is             looks for new ways to
consistently emphasized    improve operations."

Formalized rules and       "I am not constrained by
policies do not stand in   many formalized rules."
the way of progress

Table 3
Items for Creativity Construct

Item from Creativity        Source Material          Original Item
Scale

Excessive attention      Amabile et al. (1996),  "There is an over-
to detail does not       George and Zhou         emphasis on details
interfere with my        (2007), Perry-Smith     in this
ability to generate      (2006).                 organization."
new ideas

Employees are allowed    Amabile et al (1996),   "People are allowed
to be creative in        George and Zhou         to solve problems
solving problems as      (2007); Gilson et al.   creatively in this
they occur               (2005), Tagger          organization."
                         (2002), Perry-Smith
                         (2006).

Our company              Amabile et al.          "Creativity is
emphasizes creativity    (1996), Scott and       encouraged at our
                         Bruce (1994), Zhou      company."
                         and George (2001).

Our company rewards      Amabile et al.          "The reward system at
creative thinking        (1996), Perry-Smith     our company
                         (2006); Scott and       encourages
                         Bruce (1994); Zhou      innovation."
                         and George (2001)

Table 4
Means, Standard Deviations, Correlations, and Internal Reliabilities
for Study 3

Variable                 Mean       SD             1           2

1. Company Age            59.12     31.01        --
2. Company Size          254.78     77.47       0.17 **      --
3. Industry' Growth        4.61      1.33       0.11 *     -0.15 **
4. Creativity             13.98      3.10      -0.07 *     -0.03
5. Action Orientation     16.65      3.81      -0.05        0.02
6. Revenue Growth          0.36      0.46      -0.11 **    -0.19 **
7. Profit Growth           2.01      2.01       0.30 **    -0.41 **
8. ROA Growth              0.12      0.08       0.41 **     0.43 **

Variable                     3           4           5           6

1. Company Age
2. Company Size
3. Industry' Growth        --
4. Creativity             0.03       0.83
5. Action Orientation     0.08       0.48 **     0.82
6. Revenue Growth        -0.11 **    0.30 **     0.11 *        --
7. Profit Growth         -0.16 **    0.29 **     0.19 **     0.61 **
8. ROA Growth             0.06       0.11 *      0.19 **     0.25 **

Variable                     7

1. Company Age
2. Company Size
3. Industry' Growth
4. Creativity
5. Action Orientation
6. Revenue Growth
7. Profit Growth           --
8. ROA Growth            0.53 **

Notes: N = 659

* p < 0.05; ** p < 0.01.

Table 5
Mediated Regressions of Action Orientation with
Creativity and Profit Growth

                        Model 1      Model 2      Model 3

Control Variables

Company Age              0.14         0.33         0.32
Company Size            -0.17 **     -0.19 **     -0.19 *
Industry Growth          0.17 **      0.18 **      0.17 **

Independent Variable

Creativity                            0.17 **     -0.07

Mediator

Action Orientation                                 0.27 **

F                       37.48 **     50.78 **     47.78 **
[R.sup.2]                0.14 **      0.23 **      0.27 **
Change [R.sup.2]                      0.09 **      0.04 **

Notes: N = 659

* p < 0.05; ** p < 0.01.

Table 6
Mediated Regressions of Action Orientation
with Creativity and Revenue Growth

                       Model 1      Model 2      Model 3

Control Variables

Company Age            -0.15 **     -0.10 *      -0.11 *
Company Size           -0.17 **     -0.19 **     -0.19 **
Industry Growth         0.13 **      0.14 **      0.15 **

Independent Variable

Creativity                           0.15 **      0.00

Mediator

Action Orientation                                0.22 **

F                      12.53 **     13.94 **     14.12 **
[R.sup.2]               0.05 **      0.08 **      0.11 **
Change [R.sup.2]                     0.03 **      0.03 **

Notes: N = 659

* p < 0.05; ** p < 0.01.

Table 7
Mediated Regressions of Action Orientation with Creativity and ROA

                            Model 1        Model 2        Model 3

Control Variables

Company Age                  0.44 **        0.45 **        0.46 **
Company Size                 0.16 **        0.12 *         0.12 *
Industry Growth             -0.08          -0.08          -0.08

Independent Variable

Creativity                                  0.11 *        -0.03

Mediator                                                   0.21 **

Action Orientation

F                           58.96 **       40.12 **       36.42 **

[R.sup.2]                    0.19 *         0.22 **        0.25 **

Change [R.sup.2]                            0.03 **        0.03 **

Notes: N = 669

* p < 0.05; ** p < 0.01.

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