Organizational climate for innovation and organizational performance: The mediating effect of innovative work behavior
Introduction
Employee knowledge is crucial if organizations are to innovate and develop a competitive advantage. It is therefore essential to know how to create an organizational climate that cultivates innovation among employees (Deshpande and Farley, 2004, Nybakk and Jenssen, 2012, Patterson et al., 2004). Isaksen and Ekvall (2010) noted that the deliberate management of organizational climates supportive of innovation is a key challenge, for those who lead and manage organizations. More specifically, France, Mott, and Wagner (2007) assert that failing to innovate can place organizations at risk and thus potentially diminish their ability to sustain or gain a competitive advantage. They argue that the challenge of being competitive can be met if organizations recognize that their ability to innovate is inextricably linked to the manner in which their leaders, people, climate, culture as well as structures support innovation and creativity.
The internal environment supportive of innovation is referred to as ‘organizational climate for innovation’ (OCI) and is crucial for organizations leveraging on innovativeness in order to create a competitive advantage and to enhance performance (Kissi, Dainty, & Liu, 2012). Isaksen and Ekvall (2010) supported this position arguing that an OCI is one where creativity and change are encouraged; asserting that a key aspect of managing for innovation is creating the appropriate climate so that employees can share and build upon each other's ideas and suggestions.
On the other hand, according to Janssen (2000) ‘innovative work behavior’ (IWB) consists of three interrelated behavioral tasks: (i) idea generation; (ii) idea promotion; and (iii) idea realization. Janssen's (2000) theoretical framework supports the ideas surrounding the concept of ‘ideation leadership’ that Johnson (2005, p. 613) relates to the creative process associated with generating, developing and communicating new ideas. Graham and Buchanan (2004, p. 54) concur with this view, describing ‘ideation’ as all stages of the thought cycle associated with innovation, development and actualization.
Janssen (2000) noted that IWBs are ‘discretionary behaviors’ and as a rule are not included in employees' prescribed job description or explicitly defined roles (see also Organ, 1988). Therefore, their application cannot be assured. In the same vein, Ramamoorthy, Flood, Slattery, and Sardessai (2005) supported this view and reported that these discretionary behaviors are not recognized by an organization's formal reward and recognition systems. Importantly though, Ramamoorthy et al. (2005) concluded that tendencies to engage in these extra-role behaviors can lead to enhanced team and organizational effectiveness and superior performance.
Driven by the assumption that employees' innovative work behavior contributes positively to work outcomes, researchers such as Janssen (2000), Janssen, van de Vliert, and West (2004), and Mumford, Scott, Gaddis, and Strange (2002) have devoted increasing attention to organizational and individual factors that potentially promote innovative work behavior. However, the relationship between OCI and IWB is still largely unexplored.
The impact of OCI that are strategically linked to organizational performance (OP) have been identified by researchers such as Crespell and Hansen (2009), and Nybakk and Jenssen (2012). Other scholars have pointed to how innovative work behavior can assist organizations to gain competitive advantage and to enhance organizational performance (e.g., Janssen et al., 2004, Kanter, 1988, Oldham and Cummings, 1996, Scott and Bruce, 1994, Yuan and Woodman, 2010, Shih and Susanto, 2011). However, their approaches lack an underlying conceptual framework; and focus heavily on research examining the relationship between OCI and OP.
Our study makes a number of worthwhile contributions to theory and practice in organization climate research. First, only a handful of studies have looked into the relationship between OCI and IWB in general, our study will provide a new perspective of the relationship between the constructs. De Jong and Den Hartog (2010) assert that although a positive correlation between innovative climate and innovative work behavior has strong face validity, most empirical work explored climate's effects on organizational and team level innovations. Many studies (West and Anderson, 1996, Amabile et al., 1996, Nijhof et al., 2002) at the organizational and team level have shown a positive effect of climate on innovation. However, empirical study of climate's effects on individual innovative behavior has been limited. It is also important to note that the current theoretical understanding of the consequences of organizational climate is based largely on studies conducted in western settings, with little evidence from an Asian perspective (Sellgren, Ekvall & Thomas, 2008). Managers who understand how to positively impact the climate of innovation and work behavior supportive of innovativeness will create the most opportunities for innovation in their organizations which, in turn, may enhance the performance of organizations.
As employee innovative behavior is seen as a strategic foundation, this research fills the void by testing a model that delineates the relationship between OCI and OP in the context of IWB. Therefore, the objective of this study is to examine the mediating effects of IWB, on the relationship between OCI and OP. We aim to investigate the indirect relationship IWB has on OCI and OP. The paper is set out as follows: first, we provide the review of literature on OCI, IWB and OP to develop our hypotheses. Secondly, we present the research methods followed by the results. Finally, we conclude the paper with a discussion of the findings, implications, limitations and directions for future research.
Section snippets
Organizational climate for innovation and organizational performance
Innovation has been shown to be crucial to the success of an organization and individual creativity and innovativeness to be key to organizational level innovation (DiLiello & Houghton, 2006). Importantly, organizational climate can have a positive effect on creativity and innovation in organizations (Amabile et al., 1996, Cooper et al., 2004, Nybakk et al., 2011). Management needs to ensure that the organizational climate encourages, nurtures, and enhances individual creativity (DiLiello and
Sample and procedures
Data for this study were collected from managers working in public listed Malaysian Companies. The population of this research consisted of those graded as managers in their respective organizations (leaders with subordinates). Prior to the distribution of the questionnaires, the Head of Human Resources (HR) of each company was approached and notified of the aim of the study Instructions were given to the respective HR Heads on the targeted population. English is the lingua franca in
Descriptive statistics
Table 1 summarizes the means, standard deviations as well as the correlation matrices for all of the variables. After establishing the factor structure for all variables, Confirmatory Factor Analysis (CFA) was employed to establish a valid measurement model prior to testing the structural model and to confirm its validity. Hair, Black, Babin, Anderson, and Tatham (2006) suggested that to be considered as having an adequate fit, all the indices must be measured against the following criteria: χ2
Discussion
The study examined the influence of ‘organizational climate for innovation’ on organizational performance mediated by ‘innovative work behavior’. We tested a model delineating the relationship between OCI and OP mediated by IWB which yielded a number of worthwhile results. The findings confirm that the relationship between OCI and OP was significant. The results have revealed that OCI had a significant and positive impact on IWB. This shows that the existence of an innovative culture plays a
References (98)
- et al.
Learning orientation, firm innovation capability, and firm performance
Industrial Marketing Management
(2002) - et al.
Organizational culture, market orientation, innovativeness, and firm performance: An international research odyssey
International Journal of Research in Marketing
(2004) - et al.
Understanding innovation in small and medium sized enterprises: A process manifest
Technovation
(2005) Confidence intervals and statistical power of the “Validation” ratio for surrogate or intermediate endpoints
Journal of Statistical Planning and Inference
(2001)- et al.
The role of transformational leadership in enhancing organisational innovation: Hypotheses and some preliminary findings
The Leadership Quarterly
(2003) - et al.
Leading creative people: Orchestrating expertise and relationships
Leadership Quarterly
(2002) - et al.
Innovation through exemptions: Building upon the existing creativity of employees
Technovation
(2002) - et al.
Facilitating talk about new ideas: The role of personal relationships in organizational innovation
Communication Monographs
(1991) A model of creativity and innovation in organizations
- et al.
The creative environment work scales: Work environment inventory
Creativity Research Journal
(1989)
Assessing the work environment for creativity
Academy of Management Journal
Structural equation modeling in practice: A review and recommended two-step approach
Psychological Bulletin
The moderator–mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations
Journal of Personality and Social Psychology
Creative strategy: Reconnecting business and innovation
The role of transformational leadership and organizational change on perceived organizational success
The Psychologist-Manager Journal
Innovation sources of large and small technology-based firms
IEEE Transactions on Engineering Management
Confirmatory factor analysis
A new look at psychological climate and its relationship to job involvement, effort, and performance
Journal of Applied Psychology
Trust, connectivity, and thriving: Implications for innovative behaviors at work
The Journal of Creative Behavior
From the editors: Common method variance ininternational business research
Journal of International Business Studies
Benchmarking best NPD - 1
Research-Technology Management
Antecedents to innovativeness in the forest product industry
Journal of Forest Products Business Research
Making innovation work: How to manage it, measure it, and profit from it
Individual innovation: The connection between leadership and employees' innovative work behavior
How leaders influence employees’ innovative behavior
European Journal of Innovation Management
Measuring innovative work behaviour
Creativity and Innovation Management
The impact of human resource management practices on perceptions of organizational performance
Academy of Management Journal
Corporate culture, customer orientation, and innovativeness in Japanese firms: A quadrad analysis
Journal of Marketing
Measuring organizational performance in the absence of objective measures: The case of the privately-held firm and conglomerate business unit
Strategic Management Journal
Maximizing organizational leadership for the future: Toward a model of self-leadership, innovation and creativity
Journal of Managerial Psychology
On-the-job innovation: The impact of job design and human resource management through production ownership
Creativity and Innovation Management
Common methods bias: Does common methods variance really bias results?
Organizational Research Methods
Climate, structure and innovativeness of organizations
Evaluating structural equation models with unobservable variables and measurement error
Journal of Marketing Research
The innovation imperative: How leaders can build an innovation engine
Oliver Wyman Journal
The impact of human resource management and work climate on organizational performance
Personnel Psychology
Multivariate data analysis
Business-unit-level relationship between employee satisfaction, employee engagement, and business outcomes: A meta-analysis
Journal of Applied Psychology
Information sources and their relationship to organizational innovation in small business
Journal of Small Business Management
Introduction to mediation, moderation, and conditional process analysis: A regression based approach
Promotion of employee wellbeing and innovativeness: An opportunity for a mutual benefit
Creativity and Innovation Management
Climate for creativity: A quantitative review
Creativity Research Journal
Managing for innovation: The two faces of tension within creative climates
Creativity and Innovation Management
The climate for creativity and change in teams
Creativity and Innovation Management
Meeting the innovation challenge: Leadership for transformation and growth
Situational outlook questionnaire: A measure of the climate for creativity and change
Psychological Reports
Job demands, perceptions of effort-reward fairness and innovative work behaviour
Journal of Occupational and Organizational Psychology
The bright and dark sides of individual and group innovation: A special issue introduction
Journal of Organizational Behavior
Organizational innovation: A comparison of non-profit human service organizations in Lithuania and the United States
International Social Work
Cited by (329)
Understanding IT professional innovative work behavior in the workplace: A sequential mixed-methods design
2024, Journal of Open Innovation: Technology, Market, and ComplexityDeterminants of readiness for strategic value co-creation in hospitality and tourism organisations
2024, International Journal of Hospitality ManagementInternal control system, innovation and performance of Moroccan public organizations: structural equation modeling based on the PLS approach
2024, Multidisciplinary Science JournalTeacher innovativeness: The effect of self-efficacy, transformational leadership, and school climate
2024, Journal of Pedagogical Research