Featured Research

from universities, journals, and other organizations

Corporate Culture Is Most Important Factor In Driving Innovation

Date:
November 18, 2008
Source:
University of Minnesota
Summary:
Corporate culture is, above all, the most important factor in driving innovation. Firm level factors are more important than anything else -- even location -- in predicting radical innovation.

Innovation is integral to the growth, success and wealth of firms and nations. What predicts the increase of radical innovation, and the profits that often ensue, is a mystery most firms are trying to solve. The answer that trumps all others is closer to home than most probably realize. "Corporate culture is, above all, the most important factor in driving innovation," said Rajesh Chandy, a professor of marketing at the University of Minnesota's Carlson School of Management and a charter member of the U.S. Department of Commerce's Advisory Committee on Measuring Innovation in the 21st Century Economy.

"Firm level factors are more important than anything else -- even location -- in predicting radical innovation," said Chandy. In a new study, Chandy and co-authors Gerard Tellis of the University of Southern California, and Jaideep Prabhu of Cambridge University show that among traditional drivers of innovation such as government policy, labor, capital and culture at the country level, the strongest driver of radical innovation across nations is corporate culture. They also find that the commercialization of radical innovations is a stronger indicator of financial performance than other popular measures such as patents.

"It is important to realize that all innovative companies look alike. They share a common culture no matter where they are located," states Chandy. "The corporate culture of innovative firms develops to overcome aspects of their home economies that would otherwise hinder them."

Looking at data from 759 firms across 17 countries the researchers found that location is not the determining factor in the degree to which any given firm is innovative; but rather, the innovative firms themselves share key internal cultural traits. Innovation appears to be a function of the degree to which a company fosters a supportive internal structure headed by product champions and bolstered by incentives and the extent to which that organization is able to change quickly, keeping an eye on the markets of the future.

"It's unwise to think in terms of whether American companies are more innovative than other countries' firms. The hub of innovation is within the firm," said Chandy. "Managers have control over the fates of their firms in that they can help build the culture of innovation. A sharp manager would look across industries and countries to spot innovative traits and strategies."

Additionally, radical innovations (such as the iPhone or Viagra) translate into financial value for firms. "In times of economic trouble there is a temptation, often even an imperative, to say that innovation is something we can't afford right now," said Chandy. But radically new products, which involve substantially different technology and considerably higher customer benefits, are precisely what propel new growth. Chandy cautions firms to resist the tendency to stifle the internal culture that supports such innovations.


Story Source:

The above story is based on materials provided by University of Minnesota. Note: Materials may be edited for content and length.


Journal Reference:

  1. Radical Innovation in Firms Across Nations: The Pre-eminence of Corporate Culture. Journal of Marketing, December 2008

Cite This Page:

University of Minnesota. "Corporate Culture Is Most Important Factor In Driving Innovation." ScienceDaily. ScienceDaily, 18 November 2008. <www.sciencedaily.com/releases/2008/11/081118122057.htm>.
University of Minnesota. (2008, November 18). Corporate Culture Is Most Important Factor In Driving Innovation. ScienceDaily. Retrieved July 25, 2014 from www.sciencedaily.com/releases/2008/11/081118122057.htm
University of Minnesota. "Corporate Culture Is Most Important Factor In Driving Innovation." ScienceDaily. www.sciencedaily.com/releases/2008/11/081118122057.htm (accessed July 25, 2014).

Share This




More Mind & Brain News

Friday, July 25, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

University Quiz Implies Atheists Are Smarter Than Christians

University Quiz Implies Atheists Are Smarter Than Christians

Newsy (July 25, 2014) An online quiz from a required course at Ohio State is making waves for suggesting atheists are inherently smarter than Christians. Video provided by Newsy
Powered by NewsLook.com
Beatings and Addiction: Pakistan Drug 'clinic' Tortures Patients

Beatings and Addiction: Pakistan Drug 'clinic' Tortures Patients

AFP (July 24, 2014) A so-called drugs rehab 'clinic' is closed down in Pakistan after police find scores of ‘patients’ chained up alleging serial abuse. Duration 03:05 Video provided by AFP
Powered by NewsLook.com
New Painkiller Designed To Discourage Abuse: Will It Work?

New Painkiller Designed To Discourage Abuse: Will It Work?

Newsy (July 24, 2014) The FDA approved Targiniq ER on Wednesday, a painkiller designed to keep users from abusing it. Like any new medication, however, it has doubters. Video provided by Newsy
Powered by NewsLook.com
Can Watching TV Make You Feel Like A Failure?

Can Watching TV Make You Feel Like A Failure?

Newsy (July 24, 2014) A study by German researchers claims watching TV while you're stressed out can make you feel guilty and like a failure. Video provided by Newsy
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:
from the past week

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins