Description
Organizational culture innovation and creativity are interrelated. Organizational culture plays a vital role for encouraging innovation and creativity in any company. Organizational culture is also an important determinant of organizational success.
Organizational Culture, Innovation and
Creativity
Organizational culture innovation and creativity are interrelated. Organizational culture plays a
vital role for encouraging innovation and creativity in any company. Organizational culture is
also an important determinant of organizational success.
Organizational Culture:
Organizational culture is culture starts with leadership, is reinforced with the accumulated
learning of organizational members and is powerful set of forces that determine human behavior.
There is no exact definition for organizational culture it is explained with mere examples. For
example in an organization, the way we do things around here i.e. consistent way of performing
tasks, solving problems , resolving conflicts, interaction with customers and treating employees
all these tasks comes together to form organizational culture.
Work culture is a totality of various levels of interaction among organizational factors and
organismic factors interact among themselves at various levels.
Functions of organizational culture are behavioral control, encouraging stability and provide
source of identity.
Nature of organizational culture:
The culture of an organization may reflect in various forms adopted by the organizations these
could be
• physical infrastructure
• routine behavior, language, ceremonies
• gender euality, euality in payment
• dominant values such as uality, efficiency
• !hilosophy that guides the organization"s policies towards it employees and
customers like customer first and customer is king and manner in which employee"s deals
with customers.
• #ndividual factors wont reflect organizational culture but combined together
reflect organizational culture. $arge organization has a dominant culture and also sub
cultures exist.
• %ominant culture is followed by every one in organization and sub culture is
followed by only particular department or group.
Levels of organizational culture:
• &t level'() organizational culture can be observed in the form of physical ob*ects,
technology and other visible forms of behavior like ceremonies and rituals.
• &t level '+) there is greater awareness and internalization of culture values. people
in the organization try solutions of a problem in ways which have been tried and tested
earlier.
• &t level',) a process of conversion, where the group repeatedly observes that the
method that was tried works most of the time, it becomes the preferred solution and get
converts into dominant value orientation.
Common Myths about organizational culture:
• Organizational culture is same as organizational climate) these are not same but
two different concepts in organization. Organization culture is a macro phenomenon
which deals with beliefs, assumptions, values and behaviors
• reflecting commonality in people working together. Where as organizational
climate is micro phenomenon and reflects how employees in an organization feel about
the characteristics and uality of culture like morale, goodwill, employee relations, *ob
satisfaction etc.
• -ulture is same as group think) culture refers to shared assumptions and beliefs. it
is likely to cause confusion, it is characterized by symbols, beliefs and artifacts. Where
as group think refers to group member hiding any differences in how they feel and think
and behave in a certain way, it is mostly happened in face to face situations.
• -ulture is same as organization) culture is a result of sustained interaction among
people in organization and exists commonly in thoughts, feelings and behavior of people.
Where as organization consists of a set of expectations and a system of rewards and
punishment substained by rules, regulation and norms of behavior.
• -ulture is a social structure) social structure in various collectives exhibit tangible
and specific ways in which people relate to one another overtly. /owever, culture
operates on a system of unseen, abstract and emotionally loaded forms which guide
organizational members to deal with their physical and social needs.
Types of organizational culture:
Types are explained easily with the help of competing value frame work.
-ompeting value frame work has proven to be a helpful framework for assessing and profiling
the dominant cultures of organization. The first dimension places the values of flexibility,
discretion and dynamism at one end of the scale with stability, order and control on the other.
That means it emphasis on adaption and effectiveness. The second dimensions is marked by
internal orientation, integration and unity at one end of the scale with external orientation,
differentiation and rivalry on the other.
Hierarchy:
/ierarchical organizations share similarities with the stereotypical large bureaucratic
corporation. They are defined by stability and control as well as internal focus and integration.
They value standardization, control and well defined structure for authority and decision making.
0xamples are 1- %onald"s and government agencies like department of motor vehicles .
Market:
These companies are similar to hierarchical companies in terms of stability and control but differ
in terms of focus. These organizations have external orientation and they value differentiation
over integration. This began largely because of the competitive challenges from overseas. These
focused on relationships with suppliers, customers, contractors, unions, legislators, consultants
and regulators. These organizational feel that through external relations they can achieve success.
Organizations are more concerned on competitiveness and productivity.
0xamples are 2eneral electric 3204, during leadership of former -0O *ack wetch.
Clan:
-lan is similar to hierarchy in terms of inward focus with concern for integration but they
emphasis on discretion rather than the stability and control of control. The organizations
operated more like families hence they valued cohesion, a humane working environment. #t
emphasis on teamwork and sociality, needs spaces that foster. -ompanies were made up of semi
5autonomous teams that had the ability to hire and fire their own members and employees were
encouraged to participate in determining how things would get done.
0xample is 6apanese firms in the late 78"s and 98"s.
Adhocracy:
&dhocracy is similar to clan in that emphasizes on discretion and flexibility but instead of inward
focus it focuses externally and concern for differentiation. This approach developed to deal with
the fast paced and volatile business environment, social, economic and technological changes
made older corporate attitudes and tactics less efficient. These organizations value flexibility,
adaptability.
0xamples is 2oogle, which develops innovative web tools, taking advantage of entrepreneurial
software engineers and cutting 5 edge processes and technologies.
Case Study:
Organizational culture at :##T)
:##T was founded in (;9( by two ##T, %elhi graduates, <a*endra = !awar and >i*ay ? Thadani
with a vision of meeting basic reuirements for #T talent in a world moving into an information
based economy. They had anticipations about the unpreparedness of #ndian society to cope with
the forthcoming information age and adopted the mission @bringing people and computers
together, successfullyA. #nitially, :##T delivered #T training to a broad spectrum of people 5 from
students seeking a career in computers to #T professionals reuiring advanced skills. from
managers giving their careers an edge, to school children using computers as a learning too.
:##T"s innovative offerings demonstrated the company"s ability to constantly renew itself to
anticipate future technology trends. From a computer training institute, :##T has emerged as a
global #T solutions corporation offering knowledge solutions along with developing software
solutions along with developing software solutions. /eaduartered in :ew %elhi, #ndia, :##T
operated through (88B subsidiaries in the C=, &sia !acific, 0urope, and 6apan and has
operations in about D8 countries.
#ts mission keeps pace with the developments in the field of #T is evolved through organization
wide discussions which helps develop commitment among employees. The organization operates
with the help of task teams designed for specific customer reuirements for a specific period to
carry out the work. Team culture and openness are emphasized a great deal. :##T,s corporate
culture focuses on values such as uality, creativity, and customer satisfaction. The uality
culture of :##T has been the result of the sustained efforts of its management 5 perpetuated
through induction, socialization, reinforcement, innovation, and concern for internal and external
customers. The uality culture is ingrained at :##T in such a way that the priority is to prevent
mistakes rather than rectify them. &lso, uality efforts are backed by results, which are rewarded.
0mployees are treated as intellectual capital and are looked after well. The happy and committed
employees ensure customer satisfaction and this has got them wide acceptance across the globe.
#t has got well designed mechanisms for monitoring the uality for its products, services and or
software processes. 1ost of :##T"s businesses have #=O ;888 certification. The work culture at
:##T has gone through all the stages of culture development like symbols, behavior,
organizational values, attitudes, and shared assumptions, and probably this is the reason it has
been able to sustain it.
PRO’S OF ORA!I"A#IO!A$ C%$#%R&:
• =trong organizational culture will attract high level talent. Eest people can be
choosy and they will strongly consider whether a company has effective organizational
culture and how workers get along with each other.
• =trong organizational culture will help to keep your top level talent.
• & strong culture creates energy and momentum. Once a strong organizational
culture is built, it will gain a momentum of its own and will help to allow people to feel
valued and express themselves freely. #t will have positive influence on organization.
• =trong organizational culture will change mindset of employees positively like
loving work they are doing etc. which intern increase efficiency.
• #t will also make everyone more efficient and successful.
Con’' o( organizational culture:
!ositive change won"t occur if we don"t make it a practice to
• -ommunicate a sound rationale for every undertaking and change
• &ppoint the right people to the right position
• =eize upon every opportunity to improve the culture whether it is from your
adversaries, competitors or simply some one else"s misfortune.
Innovation:
#n today"s ever'changing economic landscape, inventiveness has become a key factor
influencing strategic planning. #nnovation generally refers to the creation of better or
more effective products, processes, technologies, or ideas that are accepted
by markets, governments, and society. #nnovation differs from invention or renovation in
that innovation generally signifies a substantial positive change compared to incremental
changes.
The goal of innovation is to create business value by developing ideas from mind to
market. 1ost of companies find tremendously difficult to achieve.
rivers of innovation:
There are basically four drivers which will gradually transform the manner in which
companies innovate and for each driver new innovative principles will arise.
• -o'creating value with customers and tapping knowledge about users
-ompanies have to open their innovation processes. -ompanies must listen and
dialogue with customers and give them access to all kinds of information. -ustomer"s
needs and behavior must be considered as a integral part of a company"s strategy and
business model. -ompanies must be transparent and evaluate risk with their customers.
Tapping hidden knowledge from customers and involving users in the beginning of
innovation processes reuires different knowledge and competencies than has previously
been necessary for innovation.
• 2lobal knowledge sourcing and collaborative networks)
-ompanies will form collaborative networks and engage themselves in binding
innovation partnerships.
single companies regardless of size will posses all the
knowledge and resources needed to innovate on its own. /ence companies will have to
access and combine globally'dispersed knowledge on a larger scale than ever seen before.
• 2lobal challenges as a driver of innovation)
-ompanies will constantly search for new business opportunities, and they will
realize that global challenges such as climate change, the supply of clean water,
epidemics and social needs constitute a huge new market. Ey creating new and more
responsible and sustainable solutions, companies can cultivate new business
opportunities. F-orporate social innovation" may be an important new business area for
private companies and a core driver of innovation.
0xample) 2lobal challenges such as climate change, access to clean water and
various social needs have until now been regarded as political challenges and not as
business challenges, implying that the responsibility for finding solutions rested with the
political world. -ompanies responded to reuests and demands put forward by public
sector institutions by providing the reuired service or product.
• !ublic sector challenges as a driver of innovation)
The demand for innovation in public services would appear obvious. /owever,
the difficulties also seem uite substantial. -itizens look for more individualized welfare
services of higher uality, but the amount of resources allocated to the welfare system are
under ressure, and the system"s ability to innovate can be uestioned. These challenges
open a huge territory for private companies if they can find ways for innovating with the
owners of welfare institutions, but the path into public services is a road with many
political obstacles.
Types of Innovation
There are three main types of innovation 3process, product/service, and strategy), each of which
can vary in the degree of newness 3incremental to radical4 and impact 3sustaining versus
Discontinuous4.
Proce'' Innovation:
!rocess innovation became an important with the rise of the uality and continuous improvement
movements and, then again, with the more recent attention directed at change management,
organizational learning and knowledge management.
Product)Service Innovation:
#ncremental productGservice innovation is oriented toward improving the features and
functionality of existing products and services. <adical productGservice innovation is oriented
toward creating wholly new products andGor services. !roduct life cycles, in particular, have
become shorter and shorter, causing business survival to depend on new product development
and, increasingly, on the speed of innovation in order to develop and bring new products to
market faster than the competition. Organizations must direct
greater attention to new product development, while maintaining and improving their existing
products. %iscontinuous products and services are increasingly likely with ever'faster new
productGservice development. Organizations must be constantly on the lookout for discontinuous
new products andGor services. <hough productGservice innovation and process innovation are
not the same thing, they are often interconnected.
Strategy or *u'ine'' Conce+t Innovation)
#t is, of course, possible to incrementally improve one"s business strategy but radical business
concept innovation is now paramount. #f radical business concept innovation is successful in
accomplishing these ob*ectives,
• Radical innovation)
<adical innovation is confronted with uncertainties in both technological and market
aspects. #n radical innovation reuires new knowledge and new resources and therefore it
is considered as competence destroying. #n an radical innovation we should create market
for over product.
• Incre,ental innovation)
#t"s a step by step process. #t will build up on existing knowledge and resources within a
certain company so it is considered as competence enhancing. #t involves modest
technological changes and the existing products on the market will remain competitive.
Innovation !ones)
#n product life cycle, an innovation has to taken place at various zones at various stages of
life cycle.
• !roduct leadership zones are privileged during the growth phase
• -ustomer intimacy and operational excellence zones are privileged at mature
phase.
• -ategory renewal is for categories that have lost the ability to sustain future value
creation.
#n product leadership zone) there can be basically four types of innovation
(4 %isruptive innovation) this type of innovation creates new market categories based on
discontinuous technology change.
+4 &pplication innovation) it is also called solution innovation, trying to develop new
markets for existing products.
,4 !roduct innovation) for existing markets, innovating new products. This form of
innovation is normally highly dependent on fast time to market.
D4 !latform innovation) These types of innovation interpose a simplifying layer to mask
an underlying legacy of complexity and complication, thereby freeing a next
generation of offers to focus on new value propositions.
Cu'to,er inti,acy zone)
There are our types of innovations)
(4 $ine'extension innovation) this type of innovation makes structural modifications
to an established offer to create a distinctive subcategory. 2oal is to expand
market share with existing product.
+4 0nhancement innovation) this type of innovation continues the tra*ectory begun
by line extension, driving innovation into finer and finer elements. The goal is to
improve existing offers in existing markets by modifying a single dimension,
there by reawakening customer interest.
,4 0xperiential innovation) it"s based on ultimate refinement of customer intimacy,
the value is based not on differentiating the functionality but rather the experience
of the offering. #t is particularly suited to consumer markets.
D4 1arketing innovation) this type of innovation focuses on differentiating the
interaction with a prospective customer during the purchase process.
O+erational e-cellence zone:
(4 >alue' engineering innovation) this type of innovation extracts cost from the
materials and manufacturing of an established offer without changing its external
properties.
+4 #ntegration innovation) this type of innovation reduces the customer"s cost of
maintaining a complex operation by integrating its many disparate elements into
single centrally managed system.
,4 !rocess innovation) this type of innovation focuses on improving profit margins
by extracting waste not from the offer itself but from the enabling processes that
produce it.
D4 >alue migration innovation) this typeof innovation consist of redirecting the
business model away from a commoditizing element in the market"s value chain
towards one richer in margins.
Category rene.al zone)
(4 Organic innovation) the uses its internal resources to reposition itself into a
growth category. For example solving problem faced by most valued customers
etc.
+4 &cuisition innovation) it solves the problem of category renewal externally
through merger and acuisitions.
Creativity:
Creativity refers to the phenomenon whereby a person creates something new that has some
kind of value. What counts as HnewH may be in reference to the individual creator, or to the
society or domain within which the novelty occurs. What counts as HvaluableH is similarly
defined in a variety of ways.& creative product is one that is different from all previously
existing products intended for similar purposes, along one or more substantial dimensions. &
certain consideration of context is appropriate in the evaluation of novelty.
Organizational culture influence on creativity and innovation:
Organizational support is reuired for creativity and innovation. >arious organizational factors
that effect creativity and innovation are
/0 Organizational encourage,ent encompasses several aspects, including encouragement of risk
taking and idea generation, supportive evaluation of ideas, collaborative idea flow, and participative
management and decision making. Open flow of communication across groups in the organization is
reuired for creativity and innovation. Organizational structures and a culture that supports, or perhaps
more appropriately does not punish, this type of communication will be more likely to have more effective
creativity and innovation.
10 Su+ervi'ory encourage,ent =upervisory encouragement includes clarity of team goals, supervisory
support of the team"s work and ideas, and an environment where open interactions are supported.
#nnovation effectiveness is positively associated with group cohesiveness, provided that an open,
-onfrontive climate for conflict resolution exists within the innovation team. &bsent such a climate,
cohesiveness is negatively related to the level of innovation in the team.
20 3ork grou+ encourage,ent: work group encouragement focuses on diversity among group
members and constructive challenging among team members. -reative performance is increased when
diversity is allowed, when people with dissimilar frames of reference can exchange ideas, and when the
organization can effectively integrate creative personalities into the organizational mainstream. The
organization that possesses these attributes must have a culture that strongly values, tolerates, and even
embraces diversity, particularly diversity of personalities.
40 Freedo, and autono,y: Freedom and autonomy here are related to granting and allowing freedom
and autonomy to employees for determining the means by which to achieve a goal, not necessarily
autonomy for selecting what goals to go after.
50 Re'ource': resources refer to money and time, not providing ample time lead to distrust
and burnout. !roviding more time than reuired can take way sense of challenge and
decrease creative performance. 0nough amount of money should be provided so that
employees will focus on work rather than finding resources.
60 Control: it is one factor that acts as organizational obstacle for creativity and innovation.
-ontrol in decision making, control of information flow, or even perceived control in the form of reward
systems that put too much emphasis on increasing extrinsic motivation. & culture that supports and
encourages control will result in diminished creativity and innovation. The primary reason for this is that
control negatively affects intrinsic motivation.
According to 7urn' and 'talker
1echanistic organizations were characterized as hierarchical, highly structured organizations
with well'defined, formal roles and positions relative to others in the organization, with
communication flowing primarily vertically. Organic organizations, by contrast, were typified by
their fluid organizational design, with departments and teams forming and reforming to address
new problems and opportunities, with communication flowing primarily laterally. Organic
organizations form to deal with unpredictability and volatility in an organization"s environment.
-ompared with a mechanistic organization, an organic one facilitated greater creativity and
innovation. -entralized decision making may enhance an organization"s ability to implement
innovations, particularly in a more stable environment.
According to a,a7ile,
There are six support scales that would differentiate between high' creativity climate and low
creativity climate including 3a4 organizational encouragement, 3b4 supervisory encouragement,
3c4 Work group supports, 3d4 freedom, 3e4 sufficient resources, and 3f4 challenge.
Work has focused on three ingredients for creative output 3a4 domain expertise, 3b4 creative'
thinking skills, and 3c4 intrinsic motivation.
Acc to ro'a7eth M8kanter,
#nnovation is most likely to occur in organizations that 3a4 have integrative structures, 3b4
emphasize diversity, 3c4 have multiple structural linkages inside and outside the organization, 3d4
have intersecting territories, 3e4 have collective pride and faith in people"s talents, and 3f4
emphasize collaboration and teamwork.
Case study)
Organizational culture that (acilitate' radical innovation in a
,ature ',all to ,ediu, 'ized co,+any
& case study of a small to medium sized firm based in the C? was used as a basis for examining
the innovation culture that facilitates radical innovation. & case study provides the opportunity to
investigates a contemporary phenomenon within its real'life context, especially when the
boundaries between phenomenon and context are not clearly evident. The firm in the case study
is -erulean, an international company that designs, manufactures, markets and supports a range
of uality measurement euipment for the tobacco industry and specialized tube packing
machines world'wide. Over the last ten years the company has grown to be a dominant player in
its international market sectors but now finds itself unable to provide the @stream of innovative
new productsA that it believes is necessary to survive and grow. The company had a history of
incremental innovation but had been unsuccessful in generating radical innovations from within.
The perception from within the company was that the organizational culture 5@the way we do
things round hereA was inhibiting radical innovation. 0mphasis was placed on successful
outcomes, risk was avoided and speculative or exploratory developments were avoided, in order
to focus on product enhancements. <ecent product introductions have been @me tooA products
that responded to a competitor offering or an evolution of an existing product. The last example
of a product that included a radical innovation was conceived about five years ago. This radical
innovation came from the use of an external consultancy to create the concept that was later
developed and productionized within -erulean. #n order for the company to prosper, it was
believed that it had to develop the capability to develop new lines of products as well as
improving existing ones. <egaining the entrepreneurial spirit of the company from ten years
previously was desired, but in a manner that could co'exist along with the existing business.
<ecent years had seen many improvements in using modern methods and procedures and these
were also essential for efficient operation of the business. -erulean is an operating division of
1olins plc. #t has a head office in 1ilton ?eynes in the C?. %esign, development and
manufacturing are all carried out exclusively at the 1ilton ?eynes head office. This facility also
contains the administration functions, =ales and -ustomer =ervice for the 0urope, 1iddle 0ast
and &frica regions. There are service, or sales and service centers in the C=&, Erazil, >enezuela,
=outh &frica, 2ermany, #ndia, 1alaysia, and -hina. There are (8I people employed by the
company with around 78 of these being based at the 1ilton ?eynes head office. The
development team within -erulean was the sub*ect of the research. This is a team of around (I
development engineers with length of service ranging from less than one year to over thirty
years. The team comprises skills in mechanical, electrical, electronic and software engineering.
The nine attributes of -erulean"s existing organization culture that enable and inhibit the
development of a radical innovation culture such as Freedom, attitude to risk, development,
external confidence, internal confidence, external perspective, clear ob*ective, team constitution
and company infrastructure.
Eut for radical innovation in cerulean"s, The change is necessary in %evelopment team to change
their underlying beliefs about risk taking to a position where risky decisions are believed to be
opportunities for exploration and exploitation. Ey changing the basic assumptions and values,
behavior changes can be embedded in the organization as @the way we do things around hereA,
thus leading to the desired radical innovation culture. #n this way a social heritage for @radical'
nessA could be created.
"eferences:
(4 #ntroduction to Organizational culture
+4 Organizational culture) is it a plus or minus in your organization by -harlie -onnolly
,4 What %o We ?now about %eveloping and =ustaining a -ulture of #nnovation by
$.&iman'=mith +88D
D4 Four organizational culture types by bruce 1.tharp
I4 #nnovation by ?athryn &.baker
J4 :ew nature of innovation by *ose santos, dirk pillat
74 Organizational -ulture"s #nfluence on -reativity and #nnovation) & <eview of the
$iterature and #mplications for /uman <esource %evelopment by $aird %. 1c$ean
94 -ase study) %eveloping an organizational culture that facilitates radical innovation in a
mature small to medium sized company) 0mergent findings
Eook)
Organizational behavior by =tephen p.robbins
doc_730148794.doc
Organizational culture innovation and creativity are interrelated. Organizational culture plays a vital role for encouraging innovation and creativity in any company. Organizational culture is also an important determinant of organizational success.
Organizational Culture, Innovation and
Creativity
Organizational culture innovation and creativity are interrelated. Organizational culture plays a
vital role for encouraging innovation and creativity in any company. Organizational culture is
also an important determinant of organizational success.
Organizational Culture:
Organizational culture is culture starts with leadership, is reinforced with the accumulated
learning of organizational members and is powerful set of forces that determine human behavior.
There is no exact definition for organizational culture it is explained with mere examples. For
example in an organization, the way we do things around here i.e. consistent way of performing
tasks, solving problems , resolving conflicts, interaction with customers and treating employees
all these tasks comes together to form organizational culture.
Work culture is a totality of various levels of interaction among organizational factors and
organismic factors interact among themselves at various levels.
Functions of organizational culture are behavioral control, encouraging stability and provide
source of identity.
Nature of organizational culture:
The culture of an organization may reflect in various forms adopted by the organizations these
could be
• physical infrastructure
• routine behavior, language, ceremonies
• gender euality, euality in payment
• dominant values such as uality, efficiency
• !hilosophy that guides the organization"s policies towards it employees and
customers like customer first and customer is king and manner in which employee"s deals
with customers.
• #ndividual factors wont reflect organizational culture but combined together
reflect organizational culture. $arge organization has a dominant culture and also sub
cultures exist.
• %ominant culture is followed by every one in organization and sub culture is
followed by only particular department or group.
Levels of organizational culture:
• &t level'() organizational culture can be observed in the form of physical ob*ects,
technology and other visible forms of behavior like ceremonies and rituals.
• &t level '+) there is greater awareness and internalization of culture values. people
in the organization try solutions of a problem in ways which have been tried and tested
earlier.
• &t level',) a process of conversion, where the group repeatedly observes that the
method that was tried works most of the time, it becomes the preferred solution and get
converts into dominant value orientation.
Common Myths about organizational culture:
• Organizational culture is same as organizational climate) these are not same but
two different concepts in organization. Organization culture is a macro phenomenon
which deals with beliefs, assumptions, values and behaviors
• reflecting commonality in people working together. Where as organizational
climate is micro phenomenon and reflects how employees in an organization feel about
the characteristics and uality of culture like morale, goodwill, employee relations, *ob
satisfaction etc.
• -ulture is same as group think) culture refers to shared assumptions and beliefs. it
is likely to cause confusion, it is characterized by symbols, beliefs and artifacts. Where
as group think refers to group member hiding any differences in how they feel and think
and behave in a certain way, it is mostly happened in face to face situations.
• -ulture is same as organization) culture is a result of sustained interaction among
people in organization and exists commonly in thoughts, feelings and behavior of people.
Where as organization consists of a set of expectations and a system of rewards and
punishment substained by rules, regulation and norms of behavior.
• -ulture is a social structure) social structure in various collectives exhibit tangible
and specific ways in which people relate to one another overtly. /owever, culture
operates on a system of unseen, abstract and emotionally loaded forms which guide
organizational members to deal with their physical and social needs.
Types of organizational culture:
Types are explained easily with the help of competing value frame work.
-ompeting value frame work has proven to be a helpful framework for assessing and profiling
the dominant cultures of organization. The first dimension places the values of flexibility,
discretion and dynamism at one end of the scale with stability, order and control on the other.
That means it emphasis on adaption and effectiveness. The second dimensions is marked by
internal orientation, integration and unity at one end of the scale with external orientation,
differentiation and rivalry on the other.
Hierarchy:
/ierarchical organizations share similarities with the stereotypical large bureaucratic
corporation. They are defined by stability and control as well as internal focus and integration.
They value standardization, control and well defined structure for authority and decision making.
0xamples are 1- %onald"s and government agencies like department of motor vehicles .
Market:
These companies are similar to hierarchical companies in terms of stability and control but differ
in terms of focus. These organizations have external orientation and they value differentiation
over integration. This began largely because of the competitive challenges from overseas. These
focused on relationships with suppliers, customers, contractors, unions, legislators, consultants
and regulators. These organizational feel that through external relations they can achieve success.
Organizations are more concerned on competitiveness and productivity.
0xamples are 2eneral electric 3204, during leadership of former -0O *ack wetch.
Clan:
-lan is similar to hierarchy in terms of inward focus with concern for integration but they
emphasis on discretion rather than the stability and control of control. The organizations
operated more like families hence they valued cohesion, a humane working environment. #t
emphasis on teamwork and sociality, needs spaces that foster. -ompanies were made up of semi
5autonomous teams that had the ability to hire and fire their own members and employees were
encouraged to participate in determining how things would get done.
0xample is 6apanese firms in the late 78"s and 98"s.
Adhocracy:
&dhocracy is similar to clan in that emphasizes on discretion and flexibility but instead of inward
focus it focuses externally and concern for differentiation. This approach developed to deal with
the fast paced and volatile business environment, social, economic and technological changes
made older corporate attitudes and tactics less efficient. These organizations value flexibility,
adaptability.
0xamples is 2oogle, which develops innovative web tools, taking advantage of entrepreneurial
software engineers and cutting 5 edge processes and technologies.
Case Study:
Organizational culture at :##T)
:##T was founded in (;9( by two ##T, %elhi graduates, <a*endra = !awar and >i*ay ? Thadani
with a vision of meeting basic reuirements for #T talent in a world moving into an information
based economy. They had anticipations about the unpreparedness of #ndian society to cope with
the forthcoming information age and adopted the mission @bringing people and computers
together, successfullyA. #nitially, :##T delivered #T training to a broad spectrum of people 5 from
students seeking a career in computers to #T professionals reuiring advanced skills. from
managers giving their careers an edge, to school children using computers as a learning too.
:##T"s innovative offerings demonstrated the company"s ability to constantly renew itself to
anticipate future technology trends. From a computer training institute, :##T has emerged as a
global #T solutions corporation offering knowledge solutions along with developing software
solutions along with developing software solutions. /eaduartered in :ew %elhi, #ndia, :##T
operated through (88B subsidiaries in the C=, &sia !acific, 0urope, and 6apan and has
operations in about D8 countries.
#ts mission keeps pace with the developments in the field of #T is evolved through organization
wide discussions which helps develop commitment among employees. The organization operates
with the help of task teams designed for specific customer reuirements for a specific period to
carry out the work. Team culture and openness are emphasized a great deal. :##T,s corporate
culture focuses on values such as uality, creativity, and customer satisfaction. The uality
culture of :##T has been the result of the sustained efforts of its management 5 perpetuated
through induction, socialization, reinforcement, innovation, and concern for internal and external
customers. The uality culture is ingrained at :##T in such a way that the priority is to prevent
mistakes rather than rectify them. &lso, uality efforts are backed by results, which are rewarded.
0mployees are treated as intellectual capital and are looked after well. The happy and committed
employees ensure customer satisfaction and this has got them wide acceptance across the globe.
#t has got well designed mechanisms for monitoring the uality for its products, services and or
software processes. 1ost of :##T"s businesses have #=O ;888 certification. The work culture at
:##T has gone through all the stages of culture development like symbols, behavior,
organizational values, attitudes, and shared assumptions, and probably this is the reason it has
been able to sustain it.
PRO’S OF ORA!I"A#IO!A$ C%$#%R&:
• =trong organizational culture will attract high level talent. Eest people can be
choosy and they will strongly consider whether a company has effective organizational
culture and how workers get along with each other.
• =trong organizational culture will help to keep your top level talent.
• & strong culture creates energy and momentum. Once a strong organizational
culture is built, it will gain a momentum of its own and will help to allow people to feel
valued and express themselves freely. #t will have positive influence on organization.
• =trong organizational culture will change mindset of employees positively like
loving work they are doing etc. which intern increase efficiency.
• #t will also make everyone more efficient and successful.
Con’' o( organizational culture:
!ositive change won"t occur if we don"t make it a practice to
• -ommunicate a sound rationale for every undertaking and change
• &ppoint the right people to the right position
• =eize upon every opportunity to improve the culture whether it is from your
adversaries, competitors or simply some one else"s misfortune.
Innovation:
#n today"s ever'changing economic landscape, inventiveness has become a key factor
influencing strategic planning. #nnovation generally refers to the creation of better or
more effective products, processes, technologies, or ideas that are accepted
by markets, governments, and society. #nnovation differs from invention or renovation in
that innovation generally signifies a substantial positive change compared to incremental
changes.
The goal of innovation is to create business value by developing ideas from mind to
market. 1ost of companies find tremendously difficult to achieve.
rivers of innovation:
There are basically four drivers which will gradually transform the manner in which
companies innovate and for each driver new innovative principles will arise.
• -o'creating value with customers and tapping knowledge about users
-ompanies have to open their innovation processes. -ompanies must listen and
dialogue with customers and give them access to all kinds of information. -ustomer"s
needs and behavior must be considered as a integral part of a company"s strategy and
business model. -ompanies must be transparent and evaluate risk with their customers.
Tapping hidden knowledge from customers and involving users in the beginning of
innovation processes reuires different knowledge and competencies than has previously
been necessary for innovation.
• 2lobal knowledge sourcing and collaborative networks)
-ompanies will form collaborative networks and engage themselves in binding
innovation partnerships.
single companies regardless of size will posses all theknowledge and resources needed to innovate on its own. /ence companies will have to
access and combine globally'dispersed knowledge on a larger scale than ever seen before.
• 2lobal challenges as a driver of innovation)
-ompanies will constantly search for new business opportunities, and they will
realize that global challenges such as climate change, the supply of clean water,
epidemics and social needs constitute a huge new market. Ey creating new and more
responsible and sustainable solutions, companies can cultivate new business
opportunities. F-orporate social innovation" may be an important new business area for
private companies and a core driver of innovation.
0xample) 2lobal challenges such as climate change, access to clean water and
various social needs have until now been regarded as political challenges and not as
business challenges, implying that the responsibility for finding solutions rested with the
political world. -ompanies responded to reuests and demands put forward by public
sector institutions by providing the reuired service or product.
• !ublic sector challenges as a driver of innovation)
The demand for innovation in public services would appear obvious. /owever,
the difficulties also seem uite substantial. -itizens look for more individualized welfare
services of higher uality, but the amount of resources allocated to the welfare system are
under ressure, and the system"s ability to innovate can be uestioned. These challenges
open a huge territory for private companies if they can find ways for innovating with the
owners of welfare institutions, but the path into public services is a road with many
political obstacles.
Types of Innovation
There are three main types of innovation 3process, product/service, and strategy), each of which
can vary in the degree of newness 3incremental to radical4 and impact 3sustaining versus
Discontinuous4.
Proce'' Innovation:
!rocess innovation became an important with the rise of the uality and continuous improvement
movements and, then again, with the more recent attention directed at change management,
organizational learning and knowledge management.
Product)Service Innovation:
#ncremental productGservice innovation is oriented toward improving the features and
functionality of existing products and services. <adical productGservice innovation is oriented
toward creating wholly new products andGor services. !roduct life cycles, in particular, have
become shorter and shorter, causing business survival to depend on new product development
and, increasingly, on the speed of innovation in order to develop and bring new products to
market faster than the competition. Organizations must direct
greater attention to new product development, while maintaining and improving their existing
products. %iscontinuous products and services are increasingly likely with ever'faster new
productGservice development. Organizations must be constantly on the lookout for discontinuous
new products andGor services. <hough productGservice innovation and process innovation are
not the same thing, they are often interconnected.
Strategy or *u'ine'' Conce+t Innovation)
#t is, of course, possible to incrementally improve one"s business strategy but radical business
concept innovation is now paramount. #f radical business concept innovation is successful in
accomplishing these ob*ectives,
• Radical innovation)
<adical innovation is confronted with uncertainties in both technological and market
aspects. #n radical innovation reuires new knowledge and new resources and therefore it
is considered as competence destroying. #n an radical innovation we should create market
for over product.
• Incre,ental innovation)
#t"s a step by step process. #t will build up on existing knowledge and resources within a
certain company so it is considered as competence enhancing. #t involves modest
technological changes and the existing products on the market will remain competitive.
Innovation !ones)
#n product life cycle, an innovation has to taken place at various zones at various stages of
life cycle.
• !roduct leadership zones are privileged during the growth phase
• -ustomer intimacy and operational excellence zones are privileged at mature
phase.
• -ategory renewal is for categories that have lost the ability to sustain future value
creation.
#n product leadership zone) there can be basically four types of innovation
(4 %isruptive innovation) this type of innovation creates new market categories based on
discontinuous technology change.
+4 &pplication innovation) it is also called solution innovation, trying to develop new
markets for existing products.
,4 !roduct innovation) for existing markets, innovating new products. This form of
innovation is normally highly dependent on fast time to market.
D4 !latform innovation) These types of innovation interpose a simplifying layer to mask
an underlying legacy of complexity and complication, thereby freeing a next
generation of offers to focus on new value propositions.
Cu'to,er inti,acy zone)
There are our types of innovations)
(4 $ine'extension innovation) this type of innovation makes structural modifications
to an established offer to create a distinctive subcategory. 2oal is to expand
market share with existing product.
+4 0nhancement innovation) this type of innovation continues the tra*ectory begun
by line extension, driving innovation into finer and finer elements. The goal is to
improve existing offers in existing markets by modifying a single dimension,
there by reawakening customer interest.
,4 0xperiential innovation) it"s based on ultimate refinement of customer intimacy,
the value is based not on differentiating the functionality but rather the experience
of the offering. #t is particularly suited to consumer markets.
D4 1arketing innovation) this type of innovation focuses on differentiating the
interaction with a prospective customer during the purchase process.
O+erational e-cellence zone:
(4 >alue' engineering innovation) this type of innovation extracts cost from the
materials and manufacturing of an established offer without changing its external
properties.
+4 #ntegration innovation) this type of innovation reduces the customer"s cost of
maintaining a complex operation by integrating its many disparate elements into
single centrally managed system.
,4 !rocess innovation) this type of innovation focuses on improving profit margins
by extracting waste not from the offer itself but from the enabling processes that
produce it.
D4 >alue migration innovation) this typeof innovation consist of redirecting the
business model away from a commoditizing element in the market"s value chain
towards one richer in margins.
Category rene.al zone)
(4 Organic innovation) the uses its internal resources to reposition itself into a
growth category. For example solving problem faced by most valued customers
etc.
+4 &cuisition innovation) it solves the problem of category renewal externally
through merger and acuisitions.
Creativity:
Creativity refers to the phenomenon whereby a person creates something new that has some
kind of value. What counts as HnewH may be in reference to the individual creator, or to the
society or domain within which the novelty occurs. What counts as HvaluableH is similarly
defined in a variety of ways.& creative product is one that is different from all previously
existing products intended for similar purposes, along one or more substantial dimensions. &
certain consideration of context is appropriate in the evaluation of novelty.
Organizational culture influence on creativity and innovation:
Organizational support is reuired for creativity and innovation. >arious organizational factors
that effect creativity and innovation are
/0 Organizational encourage,ent encompasses several aspects, including encouragement of risk
taking and idea generation, supportive evaluation of ideas, collaborative idea flow, and participative
management and decision making. Open flow of communication across groups in the organization is
reuired for creativity and innovation. Organizational structures and a culture that supports, or perhaps
more appropriately does not punish, this type of communication will be more likely to have more effective
creativity and innovation.
10 Su+ervi'ory encourage,ent =upervisory encouragement includes clarity of team goals, supervisory
support of the team"s work and ideas, and an environment where open interactions are supported.
#nnovation effectiveness is positively associated with group cohesiveness, provided that an open,
-onfrontive climate for conflict resolution exists within the innovation team. &bsent such a climate,
cohesiveness is negatively related to the level of innovation in the team.
20 3ork grou+ encourage,ent: work group encouragement focuses on diversity among group
members and constructive challenging among team members. -reative performance is increased when
diversity is allowed, when people with dissimilar frames of reference can exchange ideas, and when the
organization can effectively integrate creative personalities into the organizational mainstream. The
organization that possesses these attributes must have a culture that strongly values, tolerates, and even
embraces diversity, particularly diversity of personalities.
40 Freedo, and autono,y: Freedom and autonomy here are related to granting and allowing freedom
and autonomy to employees for determining the means by which to achieve a goal, not necessarily
autonomy for selecting what goals to go after.
50 Re'ource': resources refer to money and time, not providing ample time lead to distrust
and burnout. !roviding more time than reuired can take way sense of challenge and
decrease creative performance. 0nough amount of money should be provided so that
employees will focus on work rather than finding resources.
60 Control: it is one factor that acts as organizational obstacle for creativity and innovation.
-ontrol in decision making, control of information flow, or even perceived control in the form of reward
systems that put too much emphasis on increasing extrinsic motivation. & culture that supports and
encourages control will result in diminished creativity and innovation. The primary reason for this is that
control negatively affects intrinsic motivation.
According to 7urn' and 'talker
1echanistic organizations were characterized as hierarchical, highly structured organizations
with well'defined, formal roles and positions relative to others in the organization, with
communication flowing primarily vertically. Organic organizations, by contrast, were typified by
their fluid organizational design, with departments and teams forming and reforming to address
new problems and opportunities, with communication flowing primarily laterally. Organic
organizations form to deal with unpredictability and volatility in an organization"s environment.
-ompared with a mechanistic organization, an organic one facilitated greater creativity and
innovation. -entralized decision making may enhance an organization"s ability to implement
innovations, particularly in a more stable environment.
According to a,a7ile,
There are six support scales that would differentiate between high' creativity climate and low
creativity climate including 3a4 organizational encouragement, 3b4 supervisory encouragement,
3c4 Work group supports, 3d4 freedom, 3e4 sufficient resources, and 3f4 challenge.
Work has focused on three ingredients for creative output 3a4 domain expertise, 3b4 creative'
thinking skills, and 3c4 intrinsic motivation.
Acc to ro'a7eth M8kanter,
#nnovation is most likely to occur in organizations that 3a4 have integrative structures, 3b4
emphasize diversity, 3c4 have multiple structural linkages inside and outside the organization, 3d4
have intersecting territories, 3e4 have collective pride and faith in people"s talents, and 3f4
emphasize collaboration and teamwork.
Case study)
Organizational culture that (acilitate' radical innovation in a
,ature ',all to ,ediu, 'ized co,+any
& case study of a small to medium sized firm based in the C? was used as a basis for examining
the innovation culture that facilitates radical innovation. & case study provides the opportunity to
investigates a contemporary phenomenon within its real'life context, especially when the
boundaries between phenomenon and context are not clearly evident. The firm in the case study
is -erulean, an international company that designs, manufactures, markets and supports a range
of uality measurement euipment for the tobacco industry and specialized tube packing
machines world'wide. Over the last ten years the company has grown to be a dominant player in
its international market sectors but now finds itself unable to provide the @stream of innovative
new productsA that it believes is necessary to survive and grow. The company had a history of
incremental innovation but had been unsuccessful in generating radical innovations from within.
The perception from within the company was that the organizational culture 5@the way we do
things round hereA was inhibiting radical innovation. 0mphasis was placed on successful
outcomes, risk was avoided and speculative or exploratory developments were avoided, in order
to focus on product enhancements. <ecent product introductions have been @me tooA products
that responded to a competitor offering or an evolution of an existing product. The last example
of a product that included a radical innovation was conceived about five years ago. This radical
innovation came from the use of an external consultancy to create the concept that was later
developed and productionized within -erulean. #n order for the company to prosper, it was
believed that it had to develop the capability to develop new lines of products as well as
improving existing ones. <egaining the entrepreneurial spirit of the company from ten years
previously was desired, but in a manner that could co'exist along with the existing business.
<ecent years had seen many improvements in using modern methods and procedures and these
were also essential for efficient operation of the business. -erulean is an operating division of
1olins plc. #t has a head office in 1ilton ?eynes in the C?. %esign, development and
manufacturing are all carried out exclusively at the 1ilton ?eynes head office. This facility also
contains the administration functions, =ales and -ustomer =ervice for the 0urope, 1iddle 0ast
and &frica regions. There are service, or sales and service centers in the C=&, Erazil, >enezuela,
=outh &frica, 2ermany, #ndia, 1alaysia, and -hina. There are (8I people employed by the
company with around 78 of these being based at the 1ilton ?eynes head office. The
development team within -erulean was the sub*ect of the research. This is a team of around (I
development engineers with length of service ranging from less than one year to over thirty
years. The team comprises skills in mechanical, electrical, electronic and software engineering.
The nine attributes of -erulean"s existing organization culture that enable and inhibit the
development of a radical innovation culture such as Freedom, attitude to risk, development,
external confidence, internal confidence, external perspective, clear ob*ective, team constitution
and company infrastructure.
Eut for radical innovation in cerulean"s, The change is necessary in %evelopment team to change
their underlying beliefs about risk taking to a position where risky decisions are believed to be
opportunities for exploration and exploitation. Ey changing the basic assumptions and values,
behavior changes can be embedded in the organization as @the way we do things around hereA,
thus leading to the desired radical innovation culture. #n this way a social heritage for @radical'
nessA could be created.
"eferences:
(4 #ntroduction to Organizational culture
+4 Organizational culture) is it a plus or minus in your organization by -harlie -onnolly
,4 What %o We ?now about %eveloping and =ustaining a -ulture of #nnovation by
$.&iman'=mith +88D
D4 Four organizational culture types by bruce 1.tharp
I4 #nnovation by ?athryn &.baker
J4 :ew nature of innovation by *ose santos, dirk pillat
74 Organizational -ulture"s #nfluence on -reativity and #nnovation) & <eview of the
$iterature and #mplications for /uman <esource %evelopment by $aird %. 1c$ean
94 -ase study) %eveloping an organizational culture that facilitates radical innovation in a
mature small to medium sized company) 0mergent findings
Eook)
Organizational behavior by =tephen p.robbins
doc_730148794.doc