What makes an innovation-supportive culture?

Abstract

In an increasingly fast-paced, globally competitive, and technology-oriented business environment, systematically generating innovations has become a prerequisite for organizations. Existing research has shown organizational culture to have a significant impact on organization’s ability to produce innovations and increase overall innovativeness. However, there seems to be a lack of empirical studies conducted to recognize traits of culture that best improve the capability of developing innovations. Thus, despite the wide attention received by concepts of innovation and organizational culture, innovation-supportive culture is an ambiguous phenomenon without a commonly accepted definition. This study aims to contribute to that particular area of research by empirically examining the characteristics of culture that support organizational innovation.

This study was conducted as a single-case study using eight semi-structured interviews and observation as methodological tools. The case company of this research operates in the financial sector, an industry experiencing radical disruptions and changes in its environment. The structure of this study consists of a literature review on existing research, a description of the research methodology, findings from the case company based on extracted data from interviews and observation, and finally, a discussion part that concludes the study by reflecting the findings to existing research.

The findings of this study support the significance of culture to innovations. The case company is experiencing radical changes in its internal processes as well as the business environment, which is why it seems to be in the midst of a cultural transformation, where innovation is becoming an even more integral part of its operations and values. The findings suggest the organizational culture of the company to hold three main dimensions that most support innovations: strategy, leadership, and internal environment. These dimensions encompass key themes of shared orientation for change, organizational identification, external sensitivity, management style and consistency, freedom and flexibility, climate and collaboration.