Corporate Culture and Innovation: Implications for Reward Systems

Continuous innovation is becoming a necessity if firms want to stay competitive. Different factors influence the rate of innovation in a firm, among which corporate culture has often been recognized among the most important factors. In this paper we argue that the development of corporate culture that will support and foster innovation must be accompanied with an appropriate reward system. A research conducted among Croatian firms showed that a statistically significant relationship exists among corporate culture that supports innovations and reward system features.

Authors:

• Ivana Nacinovic
• Lovorka Galetic
• Nevenka Cavlek

Keywords:

• Corporate culture
• innovation
• reward systems
• Croatia.

References:

[1] Tellis, G. J., Prabhu, J. C., Chandy, R. K. (2009) Radical Innovation
Across Nations: The Preeminence of Corporate Culture, Journal of
Marketing, Vol. 73, p. 3-23.
[2] Peters, T., Waterman, R. H. Jr. (1982) In Search of Excellence, Profile
Books.
[3] Tushman, M., Nadler, D. (1986) Organizing for innovation, California
Management Review, Vol. XXVIII, No. 3., p. 74-93.
[4] Van de Ven, A. (1986) Central problems in the management of
innovation, Management Science, Vol. 32, p. 590-607.
[5] Amabile, T.M., Schatzel, E.A., Moneta, G.B. and Kramer, S.J. (2004)
Leader behaviors and the work environment for creativity: perceived
leader support, Leadership Quarterly, Vol. 15 No. 1, p. 5-32.
[6] Axtell, C.M., Holman, D.J., Unsworth, K.L., Wall, T.D., Waterson, P.E.
and Harrington, E. (2000) Shopfloor innovation: facilitating the
suggestion and implementation of ideas, Journal of Occupational &
Organizational Psychology, Vol. 73, p. 265-85.
[7] Jassowalla, A.R.,Soshittal, H. C. (2002) Cultures that support product
innovation processes, Academy of Management Executive, Vol. 16, No.
3, p. 42-54.
[8] Poškienė A. (2006) Organizational Culture and Innovations, Engineering
Economics, No. 1 (46), p. 45-50
[9] Lyons, R. K., Chatman, J. A., Joyce, C. K. (2007) Innovation in
Services: Corporate culture and investment banking, California
Management Review, Vol. 50, No.1, p. 174-191.
[10] Lau, C., Ngo, H. (2004) The HR system, organizational culture, and
product innovation, International Business Review, Vol. 13, No. 6., p.
685-703.
[11] Price, R. M. (2007) Infusing innovation into corporate culture,
Organizational Dynamics, Vol. 36, no. 3, p. 320-328
[12] Kerr, J., Slocum, J. W. (1987) Managing Corporate Culture Trough
Reward System, Academy of Management Executive, Vol. 1, No.2, p.
99-18.
[13] Gallini, N., S. Scotchmer (2001) Intellectual Property: When is it the
Best Incentive Mechanism?, Innovation Policy and the Economy, Vol. 2,
p. 51-78.
[14] Harden, E., Kruse, D. L., Blasi, J. R. (2008) Who Has a Better Idea?
Innovation, Shared Capitalism, and HR Policies, NBER Working Paper
No. 14234, http://ideas.repec.org/p/nbr/nberwo/14234.html
[15] Laursen, K. (2002) The importance of sectoral differences in the
application of complementary HRM practices for innovation
performance, International Journal of the Economics of Business, 9(1),
p.139-156.
[16] Philips, J. (2007) Creating a Culture of Innovation, NetCentrics,
http://www.ovoinnovation.com/pdf/CreatingaCulture.pdf
[17] Myerson, P., Hamilton, R. D. III (1986) Matching Corporate Culture and
Technology, SAM Advanced Management Journal, Vol. 51, No. 1, p. 8-
13.