Veröffentlichungsreihe der Abteilung Organisation und Technikgenese des
•Forschungsschwerpunktes Technik-Arbeit-Umwelt des Wissenschaftszentrums Berlin für Sozialforschung
FS II 93-102
ORGANIZATIONAL CULTURE AND THE MANAGEMENT OF BUSINESS' INNOVATION
Meinolf Dierkes and Michelle Williams
presented at the World Consultancy Services Conference Beijing, China, April 1993
Wissenschaftszentrum Berlin für Sozialforschung Reichpietschufer 50, D-1000 Berlin (West) 30, Tel.:
gGmbH (WZB)
(0 3 0 )-2 5 4 9 1 -0
In today's dynamic world environment, organizations are constantly confronted with unfamiliar experiences that can
disrupt the culture of the company. In order to properly absorb these external pressures organizations must always be prepared to learn. Only through learning can organizations acquire the
skills necessary to ensure a culture that is able to cope with the external and internal pressures.
Furthermore, learning is an essential stepping stone to
innovation. In short, learning influences culture - signifies cultural change when necessary - while the culture sets the environment for innovation. This paper also extrapolates experiences from the field of Research and Development to
signify what helps create a culture that stimulates innovation.
Table of Contents
I. Developing a Culture for Innovativeness: a key challenge to todays business 1. The future business environment: rapid and profound changes
2. Organizational Learning: the key competence for success and survival 3. Organizational Learning: more open questions than easy answers
II. Managing Business Innovation: the conceptual base
1. The dual nature of organizational culture: central for success but a risk to learning
2. Changing the organizational culture: the key to learning
3. Creating structures of innovativeness: how to enable a corporation to continually learn
III. Developing a Culture of Innovativeness in Research and Development: lessons from experience
1. Stimulating innovativeness: the basic tasks 2. Cultivating creativity: the key role of tensions 3. identifying creative tensions
4. Managing creative tensions: the central task
IV. Organizational Culture and the Management of Innovation: some concluding remarks
ORGANIZATIONAL CULTURE AND THE MANAGEMENT OF BUSINESS' INNOVATION
I.DEVELOPING A CULTURE FOR INNOVATIVENESS: A KEY CHALLENGE TO TODAYS BUSINESS
1.1 The Future Business Environment: rapid and profound changes Today's business environment is characterized by intense
competition on an increasingly global dimension. This requires corporations to constantly be alert and prepared to meet those challenges through innovations in strategies, processes and
products. There is also a great deal of evidence to suggest that throughout the next decade the environment in which companies operate will undergo rapid, extensive and often unpredictable change. This is, partially at least, a result of global, regional and local developments which are already in progress.
Globally, technological changes will take place with the increased use of information and communications technology and further
development, for example, in space- and biotechnology, new
materials, medical technology and micro systems. The continuous trend towards automation of work and everyday life results not only in changed perspectives, but also in qualitatively new
challenges for cooperations, as well as, communication processes.
The demographic structure is changing in both industrial and developing countries. The aging societies of the highly
industrialized countries are a strong contrast to the youth
cultures in developing nations. This will influence the extent and structure of migrational movements. Furthermore, values are
undergoing change characterized by the erosion of traditional values in highly industrialized countries, a global increase in environmental and quality consciousness, as well as by growing distributional conflicts between social groups and regions.
Business corporations everywhere are strongly affected by these global developments. In addition, drastic changes are also
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occurring on a regional level. For example,, European businesses must also face the challenges of a Single Internal Market (Europe 1992) and deal with the developments in the former Eastern Bloc countries in their economic and political environment, while the United States is adapting to the changes in world politics and a new role as an "equal" partner in both the economic and political sphere.
Locally, on a national level or even in smaller contexts,
organizations in highly industrialized countries are confronted with complex long-term restructuring problems, similar to those in the "re-industrialization" of old industrial regions. Even more drastic developments in the business environment are taking place in the rapidly developing economies and those in transition from a planned to a market economy, in eastern Europe and the former
Soviet Union.
1.2 Organizational Learning: the key competence for success and survival
These pressures for change - resulting from the economic,
political, technological, and social processes and the growing ecological problems - ultimately pose two fundamental challenges for the business community, academic research and consultants.
First, it is important to analyze these developments in the socio
political, economic, and cultural environment at the global, continental and local level and to study important individual trends, such as migrational movements and their effects on labour markets or the overall structure of societies, in a manner
appropriate to their complexity. Various efforts along these lines are already being made by different institutions. A second task is to design strategies for companies to cope with these dynamic, and often extreme, developments in their environment. This is
necessary because organizations cannot simply assume that tried and trusted strategies and past experiences will lead to a successful mastering of such fundamental changes in the environment.
If in the coming years business corporations are increasingly
faced with the task of responding adequately to complex, rapid and extensive changes in their environments, and if it cannot be
assumed that strategies adequate in the past will properly address the present environment, then obviously both learning in and
learning of organizations will become an important, perhaps the central, prerequisite for successfully mastering change. In this respect, organizational learning concerns a wide range of
intellectual strategies and concepts. In particular, the central problem is in determining to what extent it is possible to put learning processes into action which are not just reactive and crisis-induced, but rather, pro-active and strategic.
1.3 Organizational Learning: more open questions than easy answers
The basic question of how organizations learn is not new. Since the late seventies/early eighties the subject has been discussed in the management literature from various research perspectives and with varying degrees of intensity. What is new, however, is the extent and nature of the challenges in the environment. In many ways, these challenges go beyond the scope of established theories and practices.
There is a significant discrepancy in the knowledge base concerning individual learning processes and organizational learning. Psychologists have developed various theories about
individual learning. For example, the roles played by perception, memory performance, motivational structures and environmental
factors in human learning behavior have been studied under
laboratory conditions and in everyday situations. The different stages of development in individual learning have been observed and described and various personal learning styles have been compared and classified. Unfortunately, there is no comparable store of knowledge about organizational learning. For example, as far as small and medium sized companies are concerned we can still refer back, to a certain degree, to research findings on
individual and group learning. With large organizations such as multinational companies, conglomerates, unions or state
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institutions, however, the situation is quite different. Here, the problem of organizational learning can only to a very limited degree be analyzed, described and solved using the concepts of individual learning. This is due to such influences as intra- organizational power bases, the dominance of particular
subcultures or functional units, the life-cycle phase of the organization, the industry the company belongs to and its integration therein and regional or professional cultural characteristics.
Only recently a few individual aspects of the complex process of organizational learning have been a subject of larger research projects. Organizational sociologists have, for example, made
initial efforts in which structures and processes of
organizational perceptions are studied. They also developed various models to describe the relationship between organizations and their environments. There are also very few concepts (e.g., Hedberg, Gagliardi) which deal explicitly with the prerequisites, structures and processes for the acquisition of new capabilities by organizations. Beyond these, theories explaining the process of adaptation of innovations have been developed and tested.
It is not disputed that these and similar studies shed some light on various aspects of organizational learning. There are, however, currently at least four areas where theoretical and conceptional deficits exist.
- First, the relationship of organizational learning to individual and collective learning processes, has not been - conceptually nor categorically - adequately covered.
- Secondly, comparative studies of the similarities and differences between these learning processes have not been pursued.
- Thirdly, the various situations in which organizations are
stimulated to learn have not received enough attention. Especially the research results which are available do not take into
consideration learning processes under radically changing environments.
- Finally, there is a general deficiency in the gathering,
analyzing, and describing of data linking the individual aspects of organizational learning with the structural and cultural dimensions.
These four deficits are illustrated by the fact that questions like the following cannot be sufficiently answered: What criteria can be used to identify successful learning? Are there certain rules or patterns for successful or unsuccessful organizational learning? What role is played by an organization's "memory," where is it structurally anchored, how and when is it accessed and by which member of the organization and how are experiences stored in the organization? When and how are decisions made as to what has to be learned in and by an organization? Who decides what is worth learning? How can proven perceptions, thoughts, decision-making and behavioral patterns which have become dysfunctional under changed environmental conditions be dismantled and new patterns necessary for the day-to-day running of the organization or for survival be implemented quickly and effectively? What influence do external factors, in particular network structures have on the learning processes taking place in an organization? When and how are the learning experiences, which are gathered in the different areas of the organization, analyzed, discussed and transferred into the whole organization? How is the tension between learning dynamic and identity maintenance resolved?
Despite the plethora of mostly unanswered questions,
organizational learning can basically be seen as a complex relationship between three factors:
1. the motivation and ability to learn by the individual members of the organization;
2. the ability of the organizational structure to recognize, use and implement individual learning;
3. the existence of an organizational culture which supports and values thought and behavior processes conducive to learning and reinforces a structure open to it.
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Of the three, the central element is culture. Although
organizational learning is carried out and pursued by individuals, it is through the culture that they receive their support and encouragement. It is through the culture that the necessary
changes are realized. The culture is also the basis for choosing the organization's structure and the key determinant for the way the organization perceives the environment. Therefore, in dealing with learning in rapidly changing environments understanding of the business culture and its development is crucial for a
corporation's ability to innovate.
II. MANAGING BUSINESS INNOVATION: THE CONCEPTUAL BASE
II.1 The Dual Nature of Organizational Culture: central for success but a risk to learning
Organizations are characterized by both a particular structure and by a particular culture. Traditionally, structure has been seen as the key factor determining organizational behavior and, therefore, strongly influencing the success and failure of an organization.
Thus, structural change was viewed as a central concept to change the course of action whenever it was seen desirable or necessary.
In recent years, however, researchers and practitioners have become increasingly aware of the fact that culture has a strong effect on the behavior in and of organizations. Culture
influences, for example, the way in which the environment and environmental changes are perceived by the organization and its members, how they define their role regarding the environment and what individual and collective behavior is considered desirable and legitimate. It is highly plausible to assume that the ability of organizations to innovate is - alongside with the
organizational structure - strongly influenced by an
organization's culture. Also the basic assumption that culture affects organizational innovation is rarely challenged, those elements of organizational culture which promote or hinder innovation processes are not yet identified.
Lorsch (similar to Kilman, Saxton, Serpa 1986) expresses the relevance of organizational culture when he states "these belief systems were critical components in corporate success, providing guidance to managers as they make complex decisions. As long as external conditions do not change dramatically, culture is an invaluable aid to speedy and coherent strategic choices" (Lorsch 1986: 109) . Even though not all of the aspects of organizational culture are relevant for efficiency, organizational culture must be looked at holistically. It can not be right or wrong. Whether it is successful or not depends on the relationship between its basic beliefs and the conditions in the relevant environment.
There is no unanimously agreed upon definition of organizational culture. In fact, there is a great deal of controversy over
exactly what organizational culture is and its malleability. It is, however, safe to say that organizational culture is not merely a set of accepted values, symbols, myths or legends. Rather
organizational culture is an entire system deeply entangled with the socio-structural dimension of the organization and the
individuality of the various actors.
Organizational culture is both all-encompassing as well as very specific. An organization is not a social serial product. It has its own nontransferable historical development in which the
relationship between members, their cooperation and communication process and also the perceptions, thought patterns, decision
patterns, behavioral patterns are effected and formed (Dierkes and Berthoin-Antal 1985; Dierkes and Zimmerman 1991). A pithy way to describe organizational culture is:
1. the manner in which we understand our work;
2. the manner in which we view the world;
3. the things that are important to us;
4. the way we do things around here.
Hofstede offers a pragmatic definition of culture as "a collective programming of the mind" (Hofstede 1980: 13). Kluckholn expands on this collective thought concept: "Culture consists in a
patterned way of thinking, feeling, and reacting, acquired and transmitted mainly by symbol, constituting the distinctive achievement of human groups, including their embodiments"
9 (Kluckhohn 1951: 86). Another definition describes culture as the pattern of fundamental beliefs and values, shared by a group who has been together long enough to have had meaningful shared
experiences in their endeavors, which are seen to be able to successfully solve the problems of adaptation to the external environment and internal integration (Schein 1984). Shared values and beliefs - common understanding about the ways things are done in the organization - are reinforced by symbols, stories, staff selection, and examples set through the behavior of senior members of the organization (Wilkins 1983; Pettigrew 1979). In other
words, an element of organizational culture is the
spiritualization of adequate reactions to internal tasks and
specific environments which developed over time. In this way, the members of an organization develop a pattern of fundamental
beliefs, which are considered as "correct perceptions of the world around" or "correct behavior," and therefore are seen to offer the best chance for success (Schein 1984). At some point these basic beliefs and values are so deeply rooted that they become, nearly sub-consciously, part of the daily routine. The process of
refining an organizational culture is intensified by choosing the
"right" employees and the employees choosing the "right" career.
Furthermore, organizational culture is strengthened through educating and training so that the organization's values are inherent in the formation of communication and information processes. They not only communicate end products, but also transport the values of the organization. How deeply an
organizational culture influences the perceptions, thoughts and behavior of a member depends on the homogeneity and stability of the group as well as the length and intensity of the shared
experiences (Schein 1983; Schein 1985). Therefore, organizational culture is the result of a long term learning and selection
process (Gagliardi 1986) .
In dealing with organizational culture as the key factor fostering innovativeness, it is important to recognize that the culture of an organization does not exist outside the individuals as members of the organization. Culture is to be found in the individual ways of thinking and behaving, in personal perceptions and decision
making practices, in short, in the mental dispositions of each and
every member of the organization. Culture is also anchored in the emotional, volitional and motivational potential of the
organization's members. This internal side of a culture provides the other foundation of organizational innovation. This is shown, for example, in many companies where sub-cultures and professional learning styles can be identified. The importance of mental
dispositions for individual and collective innovation processes is made further clear when representatives of very different
(organizational) cultures work together outside their traditional relationship networks.
Some of the most relevant characteristics of an organizational culture explaining its importance for the behavior of the
organization can be summarized as following:
- Organizational culture is developed through its environment, history and dominant personalities in management (Pettigrew 1979). Therefore, the organizational culture is truly unique
(Hitt and Ireland 1987; Thompson and Wildavsky 1985).
- How deeply a culture affects its members depends on the
homogeneity and stability of the group along with the length and intensity of the shared experiences (Schein 1984).
- There are no general principles for successful organizational cultures in different environments. General principles might apply only when the organizations have similar experiences and forming the basic beliefs occurred in a stable environment.
- Organizational culture is both created and maintained
predominantly through success. Whereas it is also endangered by the memories and symbolizing of the success, i.e. when the old organizational culture no longer meets the demands of the
changing environment (Lorsch 1986).
Organizations having similar organizational cultures can still be very different due to their sub-cultures. All organizations
distinguish themselves through a very special tie to their different subcultures (Helmers and Knie 1992). Therefore, an important task of top management is to ensure that these sub
cultures integrate into the organization and become a strength within the organizational culture. In addition, it is the
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management’s role to serve as mediators of the culture, role models and mentors.
Case studies from different fields have proven organizational cultures to be selective. This means that they are sensitized to specific functions and ways of development. They encompass
strengths and weaknesses which enable or hinder the organizations to successfully meet challenges and opportunities of their
environments. Therefore, cultures enable organizations in
dimensions of strength to quickly and simply define goals and see to it that they are met. While in dimensions of weakness the organizational culture can impede the perceptions of the
environmental changes and appropriate reactions (Dierkes and Berthoin-Antal 1985; Thompson and Wildavsky 1985).
II.2 Changing the Organizational Culture: the key to learning Learning is not necessary in a stable environment. In times of stability the retention of a proven pattern of behavior is
generally the most effective strategy. In periods of rapid change, however, previous concepts, though they may have proven successful and reliable for years, can, and most likely will, fail.
Therefore, learning is a crucial element in the process of
cultural change. The danger, however, is that companies, like all organizations, in situations of extreme pressure are particularly likely to turn to proven plans of action rather than to develop new ones; hence, they run a high risk of not responding
adequately to new challenges. In order to survive or to continue to be successful, companies must ask themselves such questions as:
What existing competences and strengths of the culture must be developed and which new ones are to be acquired? How can it be ensured that the diverse, but always incomplete, information about changes in the environment is received promptly, correctly
selected and efficiently processed in the organization? How will the resulting "mental" map of the environment be evaluated and what strategic and conceptional conclusions will be drawn? The difficulty of achieving organizational change, therefore, should not be belittled. In fact it is a slow and laborious process in which a great deal of cooperation is required. Furthermore,
cultural change can only occur to a certain degree. The leaders in the organization, through their long term experience with success, firmly anchor the basic beliefs and values of the culture, which in turn becomes an impediment to change (Lorsch 1986). Peters states this paradox for managers quite clearly: "They must preach the vision with verve - over and over. And at the same time, they must insist upon and then revel in constant tests that reform
(expand, contract, destroy) the very same vision" (Peters 1982:
395) .
The impetus for change comes from the pressures and opportunities from changing environmental conditions (Gagliardi 1986). It also often occurs with a new generation of management who have
different interpretations of the basic beliefs and values and support gradual change. "One belief or another is altered, but the basic fabric of (the) culture remains the same" (Lorsch 1986:
100). If the organization becomes inefficient and lethargic then cultural change initiated from external pressure is most likely the only option. At that point it will be necessary "to replace the old ideology with a new one" (Gagliardi 1986: 130).
In order for the basic beliefs, values, strategies and behavior to properly develop, an organization must be able to both learn and forget (Hedberg 1981). It is worthwhile to differentiate between innovation inspired by problem solving and innovation inspired by avoiding a dreadful situation, each possibly resulting in
different expressions of organizational culture (Schein 1984) . Although externally initiated cultural change is often preferable and more common, there are some advantages to having cultural change internally initiated. It proves to be easier for management and the organization as a whole to absorb the necessary changes.
Four factors are important for the success of an internally initiated cultural change:
1. the relationship between new and old basic beliefs and values should not be antagonistic;
2. the organization should collectively experience the success of the new basic beliefs and values;
IQI vz
3. the management of the organization should spread the legend and myth interpretation of the success;
4. the information and reward system has to be adapted to the values, objectives and desired behavior of the new culture.
Starting the process of cultural change begins by conducting
cultural audits in order to assess the strengths and weaknesses of the culture. The old strengths - when still required - can then be integrated with desired new strengths. It is bringing the best of both worlds together. Lorsch continues that "such a fusion of old and new is realistic because it reflects the best assessment the executives could make about their own and their company's
capabilities; psychologically it made sense because it enabled them to retain as many beliefs from their cherished culture as possible, even as they fashioned new directions" (Lorsch 1986:
102). Wilkins and Bristow also believe that past strengths are valuable. "Return to the past for inspiration and instruction" and
"identify the principles that will remain constant" (Wilkins and Bristow 1987: 223).
The "new" culture needs to go through a trial period to test its competences. If it proves not to be successful, the top management has to be prepared to revise environment analysis and rework the strategic vision of the cultural change (Peters 1982). Top
management support is a key factor for the success of new basic beliefs and values. "Another mechanism for effecting change in the corporate culture is management training that is explicitly geared to modify behavior in support of new corporate values" (Tunstall 1983: 24).
The larger the difference between the old and new values the more important it is to take an incremental approach to change.
Organizations, like individuals, can unlearn and relearn only at a limited pace and scope. Therefore, it is important not to have unrealistic expectations as far as time constraints are concerned.
Thought and behavior patterns simply take time to unlearn and relearn. During a successful probation period of the new beliefs, the process of integrating the new culture has already begun. The probation period allows the members to familiarize themselves with
the new beliefs and values before they are actually considered the fundamental ideology of the organization. To help intensify the integration process, the success experiences should be well
documented.
Another hindrance for cultural integration is inner-organizational conflict. Organizations, like individuals, find it difficult to give up strong world views and symbols. If the new beliefs prove difficult to integrate a reward system should be developed.
"Reward systems express and reinforce the values and norms that comprise corporate culture. Careful considerations of reward systems design can help decisionmakers successfully modify the organization's culture" (Kerr and Slocum 1987: 106).
Effectively and efficiently adapting to cultural change is
extremely important to management. It may in fact be one of the most difficult challenges an organization is confronted with, but it may also be the most rewarding. There needs to be a trial and error period, where the new beliefs and values are tested and put under scrutiny. It also requires time, patience, and
understanding.
II.3 Creating Structures of Innovativeness: how to enable a corporation to continually learn
A glance at developments in the population of corporations in the world reveals two lessons. The first is the gleefully reported
failure of many companies to keep their place among the ranks of the "most successful." Research has shown that a primary reason for this slippage is that it is precisely in phases of lasting success that companies tend to find it difficult to recognize the need to develop new ways of doing things and to discard old
competences (Dierkes 1988; Gagliardi 1986; Hedberg 1981). The second observation offers maybe less exciting headlines, but more hope for the future, namely many companies do in fact succeed, and remain able to perceive and respond to changes in their
environment "in spite of" their lasting success. What can be learned from them about organizational learning?
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A variety of techniques have been used in companies to keep them informed about developments in their environment. Scenario
exercises have proven valuable for integrating new information and reforming organizational perceptions, particularly when a large number of managers in different parts of the organizations work through the exercises. Drawing younger managers together to discuss corporate philosophy and challenge dominant perceptions and traditions also ensures that new ideas are given voice.
Looking at the top of the organization, some companies have found it helpful to appoint supervisory board members or other outside advisors from very different communities than the world of
mainstream management.
These techniques do not in and of themselves guarantee
organizational innovation. They have to be embedded in processes and cultural mindsets that foster receptiveness to new ideas and ways of doing things. Research on innovation processes in
organizations reveals that several actors are needed to
successfully introduce and develop ideas. A "sponsor" in top management must support the idea and give it organizational
legitimacy. It is virtually impossible for an organization to successfully implement major new ideas without the approval and support of top management (Berthoin-Antal 1992). And a "champion"
must emerge to give the idea its substance and to obtain the commitment of others in the organization for its implementation.
Neither sponsors nor champions alone suffice - for an idea to become reality, both kinds of actors are needed behind it. A closer look at organizational process shows that these actors engage in active "selling" of their ideas in the organization.
This both generates the support and commitment from numerous quarters and builds a strong track record for learning from positive experiences. Although top management support is essential, they are often not the initial impetus. In
internationally comparative case studies on companies' reaction to youth unemployment, it is learned, for example, that "the idea originated with trainers, store managers, or other employees, rather than their being assigned the responsibility from above"
(Berthoin-Antal 1992: 95). Most often ideas introduced by top
management are general in nature, while ideas introduced by second and third level management are focused, specific and directly
address issues or problems. "It is essential to establish a link between the ideas relating to corporate social involvement held by top managers and those held by operational managers, and between broad themes and specific activities" (Berthoin-Antal 1992: 105).
The members have to be committed to both the organization and the change and have a long term vision.
A very significant factor in the ability of organizations to
perceive changes in their environment is participation in external networks. Through contacts with a wide range of different
communities, members of the organization obtain insights into developments in their environment, exchange views on how to interpret these developments, and explore possible ways of
responding to them. Cultures in which networking and questioning traditions are frowned upon do not allow the potential of internal actors to flourish. Organizations in which unusual ideas are
sought after and space is consciously created for traditional views to be challenged are in a much stronger position to keep in touch with their environment and to develop appropriate responses to emerging trends.
In short, learning in an organization is an essential stepping stone to innovativeness. Learning influences the culture -
signifies cultural change when necessary - while the culture sets the environment for innovation. Learning requires constant effort to question proven recipes and strategies through organized
processes of cultural change. The key question, therefore, is what helps create a culture that stimulates innovation embedded
throughout all parts of the organization. This is especially crucial in the field of research and development (R&D) and those functions linked to decision making processes of this field and the fast translation of results into marketable products. Thus, experiences and examples from the R&D functions in business
corporations can serve to illustrate cultural elements crucial to stimulating innovation.
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III. DEVELOPING A CULTURE OF INNOVATIVENESS IN RESEARCH AND DEVELOPMENT: LESSONS FROM EXPERIENCE
III.l Stimulating Innovativeness: the basic tasks
What kinds of institutional conditions and which management
approaches are most suited for stimulating innovation? There are three central management tasks involved in establishing an
institutional setting conducive to innovation: (1) defining the vision of the institution; (2) specifying the organization and structural prerequisites for fulfilling the vision; and (3) designing the appropriate procedural and cultural mechanisms conducive to creativity and innovation in the work environment.
A primary task in institution-building for innovativeness and creativity is the development of an identity. What, exactly, is the nature of the potentially innovative contributions of the institution? A sense of uniqueness is central to the life of an organization: on the one hand to establish its position in the relevant landscape and to legitimize its existence vis-a-vis its various external constituencies and the public at large; and, on the other hand, to guide and motivate the efforts of the internal constituencies, the members of the institution, who need to
understand the mission they are intended to contribute to
fulfilling. The key function of management in this process is to define and communicate the vision by exploring the needs to be responded to and by formulating the goals to be striven for.
Defining the vision such in more specific terms, therefore, means identifying and selecting the long-term societal needs to which it will devote itself.
Defining the vision provides the institutional basics for
stimulating and developing creativity in research and development functions specifically striving for both relevance and excellence.
Beyond this, however, every institution requires the cooperation of its members in order to be able to fulfill its mission. The task is to find the appropriate structural conditions and the set of values and beliefs necessary to ensure such cooperation. The optimal mix of both depends on the kind of products, the
production processes, the modalities of diffusion, as well as the unique vision of the individual organization. While in factory- work, for example, detailed production operations largely
determine the passive compliance of employees, in the research and development part of organizations the support must be more than tacit. When the purpose of the institution is to be creative,
formal structures are of relatively lesser significance. It is more important that the members actively promote the mission of the organization and share its vision.
Although culture is important for all organizations, there are a number of reasons why the identification with the goals and values of the organization is particularly important in research and
development. "Studies of outstanding individuals in various fields almost always reveal that such persons seem to be impelled by
feelings of mission or purpose... [When individuals] believe that what they are doing is tremendously worthwhile... [they] are
aroused to all-out efforts" (Uenishi 1984: 223). Such a sense of common purpose is especially central to an institution that does not fit the traditional mold. A business organization attempting to achieve excellence and relevance in its' research and
development activities simultaneously - which requires that its members deviate from accepted paths and ways of thinking, and often also career patterns, and developments in academia - must transform traditional thinking into a feeling of uniqueness and impart a special set of values in order to gain their support.
Therefore, an important task of management, specifically in research and development, is to communicate the vision of the institution to its members. But at the same time continue to
encourage the ability to learn and innovate. Weinberg recognizes the significance of the organizational cultural factor when he writes "the key to making an institutional policy effective is the creation of a proper mood in the members of the institutions. This requires that the director of an institution... instill into his staff an unswerving commitment" (Weinberg 1974:16).
111,2 Cultivating Creativity: the key role of tensions
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The nature of these management tasks in an institution striving for relevance and excellence in innovation is well captured in the concept of "creative tensions" introduced by Kuhn (1963) and
researched by Pelz and Andrews, among others (Pelz 1967; Andrews 1979). This concept draws on two observations: first, "a creative act occurs when a set of elements not previously associated is assembled in a new and useful combination" (Pelz 1967: 161), and second, "achievement often flourished in the presence of factors that seemed antithetical" (Pelz 1967: 157). In terms of this
concept, an institution attempting to achieve a symbiosis between relevance and excellence in its research and development function thrives on the fundamental tension between these goals. It implies a departure from the traditional distinction between the two
frames of reference that up to date have been perceived to be contradictory and seeks innovation in their combination.
To make use of such tensions, management must develop ways to reap the benefits for creativity that can come from associating the ideas from the two worlds while at the same time protecting the research staff from the problems that can stem from the often contradictory demands as well as incentive and reward systems of both objectives. The task, therefore, is to establish which
specific tensions and possible contradictions are involved in the vision of the organization and then, rather than eliminating them, to design a balanced system to develop an innovative and
stimulating research environment.
III.3 Identifying Creative Tensions
Experience indicates that some specific tensions emanate from the basic vision of such an institution:
- Disciplinary versus multi- and interdisciplinary perspectives;
- Short-term versus long-term views;
- Flexibility versus continuity;
- Freedom of individual researchers and teams versus strong coordination.
Relevance and excellence often imply quite different time
perspectives (Yarmolinsky 1976). Society's and market's needs tend to be mostly immediate and short-term in nature. The challenge is to allow both for the stimulation to be derived from recognition and meeting short-term demands and for the insulation needed to accumulate a sound knowledge basis over long periods of time. In other words, the necessary level of stimulation must be found in a balance between buffering an institution and its members from the
immediate demands of the market place and exposing them to these demands.
The importance of this second specific challenge to the management of innovation and creativity is also supported by Pelz's research.
He observed that "it seems reasonable to say that the scientists and engineers in our study were more effective when they
experienced a 'creative tension' between sources of stability or security on the one hand and sources of disruption or challenge on the other" (Pelz 1967: 157).
Related to this is the tension between flexibility and continuity.
On the one hand, research priorities change over time. On the
other hand, the development of competence beyond the project level as a basis for long-term strategies requires a relatively high degree of continuity. The organization must, therefore, be managed in such a way as to guarantee a stable, continuous development.
Both the personnel policy and the research program must take this tension into account.
Another tension lies between the need by researchers and teams for freedom and independence and the institutional interest for
coordination around long-term strategic objectives (Brooks 1976).
Independence, the freedom to follow one's own ideas, is an
important motivational factor for individual members. The need for independence includes the choice or (at least) a voice in the
selection of projects, based on individual interests and the logic of individual professional development. However, following these individual needs exclusively would undermine the institutional interest to pursue a coherent program. An organization,
therefore, has to find an optimal way to manage the tensions
21
between individual motivations and institutions needs regarding the determination of projects and programs.
A topic often discussed in this context is the question of the appropriate "closeness" or "distance" of the research and
development function to other activities of the firm. In this context for example experiments have been conducted to determine whether a research and development team is more creative when
located independently of the organization as opposed to located in the same area of the company. Advocates of distance between the R&D team and the organization ascertain that the distance allows
"pure" innovation, untainted by external factors. Proponents of the same location argue that the exposure to the organization is a benefit which provides constant communication of ideas about what is needed and relevant. Therefore, it is necessary to determine cultural elements crucial to stimulating innovation.
III.4 Managing Creative Tensions: the central task
The support for the vision of an organization is essential to its successfully managing these tensions. The employees need to
identify with the mission and value the goals of the organization.
Their production cannot be ensured through technical mechanisms and their creativity needs to be motivated and channelled in the direction of the aims of the specific organization through
cultural identification.
Cultural identification implies sharing the belief that the multitude of tensions described above are a worthwhile and manageable challenge as well as a real source of creativity. If the members of the organization cannot identify with this mission, all structural measures supporting the management of these
tensions will fail - or at best have only marginal success. The need for multi- and interdisciplinary research, the importance of flexibility as well as continuity, the significance of combining relevance and excellence must be perceived by the members of the organization to be key elements to their existence and a strong reason for collaboration.
In practice, this means for example, that participation in team- type structures seems to be central to the development of an organizational culture striving at relevance and excellence in research and development. A constant task in such an institution is the discussion of plans and the integration of overriding goals into individual projects. The participation of the individual
researchers in this on-going process is essential for their understanding and identification with the values of the organization and serves as a stimulus for creativity. The
experience that participation in the elaboration of projects has a positive influence on the achievement of members is supported by relevant research results (Pelz 1967). Not only does it help to motivate the researchers, as Pelz found, but it also utilizes the
capacity of the individuals to serve as "organs of perception,"
sensing and probing future challenges. Thus, participation and involvement specifically help to manage tension between freedom of the individual and the needs of the overall institution for a
focus and coherence of research programs.
The team-type structure both promotes participation and
facilitates interdisciplinary approaches to problem-focussed research. Depending on the nature of the project in question,
teams are composed of members from different disciplines. Managing such diverse teams to generate the new perspectives needed for a creative contribution is a continuous challenge. A key management mechanism to be implemented in this context is to build into the planning and execution of research programs a periodic effort to synthesize project-level knowledge thereby integrating the
knowledge from multi- and interdisciplinary projects into
mainstream academic knowledge. Such a structural device helps to enhance the individual member's professional development by a periodic exposure to standards and knowledge of the discipline.
These kinds of mechanisms help to deal with the tensions involved in conducting problem-oriented research by building bridges
between the tensions, between demands of the different worlds.
This also helps the individual researchers to establish their credentials according to traditional career standards while they devote themselves to achieving their concrete, day-to-day goals.
23
A central role in all this lies in the establishment of feedback processes. In each of the different stages in the research and development process, ranging from the problem identification to the final presentation of results, inputs and feedbacks must be planned for from the different constituencies inside and outside the company. Besides providing feedback on the guality of the project output, evaluation reports also help the institution to
rethink and, if necessary, to reconsider its definition of an optional mix of structural and cultural efforts to manage the various tensions. Experience indicates that this mix has to be seen as a constant process of adjustment based on trial and error, which can only work effectively in an environment and a culture that stimulates a continuous discussion of the basic mission of the institution, the specific ways it defines the various creative tensions involved, as well as the effectiveness of concepts it uses to manage those tensions. An open and comprehensive feedback system, specifically designed to serve this purpose, is an
essential element of such a process.
IV. ORGANIZATIONAL CULTURE AND THE MANAGEMENT OF INNOVATION: SOME CONCLUDING REMARKS
Regardless of the geographic location, business corporations are confronted by rapid change. To survive and profit from the
volatile environments organizations have to be alert and prepared to learn - meaning to meet changes in the environment with new strategies, products, processes, or services, i.e. innovation.
Creating an organization open
to
learning and innovation is an extremely difficult task, and therefore often neglected until absolutely necessary. Organizations are conservative by nature.Which means they prefer to use proven recipes and strategies that may not be relevant and applicable to the current conditions.
Organizations, especially the large bureaucracies in the public and private sector, often have structures that are not conducive to innovation and learning. Members of such organizations usually prefer to remain with the proven methods and traditional behavior rather than invest in uncertain strategies and methods.
Learning, therefore, requires constant effort to question those proven recipes and strategies through an organized process of cultural change. It also requires that the individual motivation to learning and innovation is embedded into the culture. The individuals as well as the organization as a whole need to be encouraged to learn and strive for innovation, which means there must be an openness to new ideas and concepts. The learning and innovative culture needs to be anchored in all parts of the
organization. It is specifically crucial in the field of R&D and those functions related to the decision making process on the direction in R&D, as well as the fast translation of results into marketable products. Creating a culture of learning in R&D
requires the management of specific tensions:
- disciplinary versus multi- and interdisciplinary perspectives;
- short-term versus long-term views;
- flexibility versus continuity;
- freedom of individual researchers and teams versus program coordination.
A balance of these tensions is usually needed to create a learning culture. However under certain conditions, like extreme pressure from short-term changes in the environment, an over-emphasis of one of the dimensions or an extreme concentration is acceptable without destroying the culture on learning and innovation. This of course can occur only if management chooses the concepts
mentioned above to change and adapt to a culture which permits the individuals involved to learn, understand and support the
necessary changes and emphasis.
25
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