integration of theory and practice
use of referencing cited in the text and at the end
the need to use [Accessed ...] when referencing web sites
What kinds of culture
and organizational structure are
most favourable to innovation?
With grateful thanks to
March 17, 2005
and the pre-sessional English module leader
Module Title: Managing Innovation and Change
Identifying Organizational Structure & Culture 5
With the rapid development of society, the rate of change in people’s lives has increased in areas such as technology, market requirements and life cycle. These issues also surround organizations, and they have brought about an increase in competitiveness. In order to gain competitive advantage, organizations cannot afford to continue producing products, services or even maintain managerial style in the same way. Hence, Eaton (2005) has suggested that organizations have to acquire the ability to create new products/services and innovate new processes. These are essential skills in providing a sustainable form of competitive advantage. In other words, innovation plays a vital role for organizations in order to gain and maintain a competitive edge. However, most managers and companies have found difficulties in exhorting their operating organizations to be more innovative and creative. Moreover, the increasing importance of innovation poses a challenge to organizations, which is how to manage, facilitate and sustain innovation effectively (Galbraith, 2004). It is the view of Nystrom (1990: p.143) that “Organizational innovation is viewed as a result of the interaction between strategy and structure, with organizational culture and climate as important intervening variables.” Structure leads to stability and continuity, while strategy is necessary to achieve innovative direction and radical change. While some organizational cultures and climates are more likely to promote stability, others are needed to facilitate creativity and innovation. In other words, organizational structure and culture are key factors which can a play significant role in facilitating and promoting innovation in organizations. Hence, it has been suggested that appropriate organizational structure and culture are favourable to innovation in the organization. This paper will attempt to determine what kinds of culture and organizational structures are most favourable to innovation. Firstly, there will be an introduction to innovation. This will be commented on later in determining the optimum kinds of organizational structure and culture to promote innovation. In the next part, there will be an attempt to evaluate the most favourable organizational structures and cultures for innovation. Finally, some conclusions will be drawn, based on the points that the essay has explored. Innovation
To determine the most favourable organizational structure and culture to bring about innovation, it is necessary to acquire a clear understanding of innovation in advance. West and Farr (1990: p.9) define organizational innovation as: “the intentional introduction and application within a role, group or organization of ideas, processes, products or procedures, new to the relevant unit of adoption, designed to significantly benefit the individual, the group, organization or wider society”. Moreover, Tidd, Bessant and Pavitt (1997:...