Organisational Culture Supports Creativity And Innovation Commerce Essay

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In order to survive this highly competitive world, one of the foremost sources of sustainable core competencies is creative and innovative human resources (Chandler et al. 2000; Christensen 1999, cited in Khazanchi et al. 2007; Rasulzada and Dackert 2009; Sarros et al. 2008). Product innovation, for instance, produces new goods and services that can more effectively meet changing customer needs and concerns (Khazanchi et al. 2007, 871). Process innovation also improves methods, services, or operations, which can also make organizations more competitive (Khazanchi et al. 2007, 871).

Are creativity and innovation the same? This paper differentiates creativity from innovation. Creativity refers to the production of new ideas, while innovation refers to the ability to put these novel ideas into successful products, services, or processes (Amabile et al. 1996, McLean 2005, 227). Creativity fuels innovation, while innovation manifests creativity in a meaningful and useful manner (McLean 2005, 227). Together, they are crucial to making creative people work meaningfully toward organizational goals and objectives.

Creativity, however, is often perceived as single-person effort, when it can be more effective in generating innovation, when it is nurtured as a group and organizational effort (Catmull 2008, 66; Chander et al. 2000; Khazanchi et al. 2007; Lau and Ngo 2004; McLean 2005; Rasulzada and Dackert 2009; Saran et al. 2009). Several studies also pointed out the importance of organizational culture in promoting creativity and innovation (McLean 2005), even across cultures (Wang et al. 2009). This paper evaluates the aspects of organizational culture that are supportive of creativity and innovation, based on a review of related literature.

Aspects of organizational culture that support creativity and innovation

Organizational culture is a "complex configuration of shared assumptions, values, norms, and artifacts that is both varied and distinct across organizations" (Schein, 2004, cited in Wang et al. 2009, 2). It is also complex because it represents a form of organizational control in modifying and establishing behaviors, even those that promote innovation (Wang et al. 2009, 2). Research suggested the importance of several aspects of organizational culture in promoting creativity and innovation effort (Catmull 2008, 66; Chander et al. 2000; Khazanchi et al. 2007; Lau and Ngo 2004; McLean 2005; Rasulzada and Dackert 2009; Saran et al. 2009; Sarros et al. 2008). One of the main goals of organizations is to improve the creativity and innovation at the workplace, so that organizational success can be relentlessly pursued (Chandler et al. 2000; Christensen 1999, cited in Khazanchi et al. 2007; Rasulzada and Dackert 2009; Sarros et al. 2008). This section discusses each of these aspects separately, although they are usually interconnected.

Tolerance of mistakes and eccentricities

Many organizations contend that they are open to risks and mistakes, although their organizational cultures may reflect the gap between rhetoric and actual experiences. In reality, even creative and innovative companies, such as Pixar, agree that taking risks and being different are not easy tasks and practices to implement and nurture, even when the management knows that these actions may result to winning solutions, products, and services (Catmull 2008, 66; Sarros et al. 2008; Wang et al. 2009). It is difficult to tolerate mistakes and eccentricities that may result to ghastly expenses and corrosion of image or even the decline of organizational culture itself (Catmull 2008, 66; Sarros et al. 2008). Catmull (2008), cofounder of Pixar and the president of Pixar and Disney Animation Studios, wrote an engaging article about the importance of risk-taking behavior as an aspect of organizational culture that promotes innovation and creation. He stressed that it is not only important that the organizational culture allows risk-taking, but that the management is also capable of recovering easily from these risks. Furthermore, he noted that risks and eccentricities are critical to creative and innovative organizational cultures, because people always expect something new about Pixar, and this motivates them to be eccentric in thinking, meaning radically new. As a result, they came up with a robot romance after apocalypse and called it "Wall-E," and then a French rat that dreams to be a renowned chef, which is now known as "Ratatouille" (Catmull 2008, 66). These are very peculiar ideas indeed, if one thinks about it, but indeed, they are novel and successful in terms of garnering box office success. Catmull (2008) stressed that these successes also reinforce the need for being tolerant of new ideas, which may or not always be successful, although, in the case of Pixar, employees work hard through peer collaborations in order to improve chances of audience success.

Other studies showed the importance of accepting mistakes for creative firms. Wang et al. (2009) examined how organizational culture moderates innovation for Chinese firms. Findings showed that risk-taking behavior is important for organizational cultures to generate innovation. Sarros et al. (2008) also noted the importance of taking risks for creative and innovative organizations. Rasulzada and Dackert (2009) also studied the organizational factors that lead to creativity and innovation. Results showed that risk-taking is important to the organizational climate, which make people feel more creative and innovative. These studies show that it is important to have an organizational climate that tolerates risks and eccentricities, in order to generate a creative and innovative organizational culture.

Support for questions and new ideas

Organizational culture must also support questions and new ideas, so that people can be more creative and innovative. Saran et al. (2009) studied the conceptual framework of corporate culture, organizational dynamics and realization of innovations. Findings showed that innovation should be an organization effort, wherein certain behaviors are adopted, including supporting a questioning climate that is ready for and critical of radical or new ideas. Chander et al. (2000) examined the determinants and effects of innovation-centered organizational culture. They also agree that it is important for an organization to be open to questions and new ideas, so that people would be more open to new ideas also. Pixar also demonstrates the promotion of a climate of questioning, while new ideas are being tested and refined for film production (Catmull 2008, 69). For instance, Pixar's creative and innovative culture is supported by its "peer culture" (Catmull 2008, 69). It has a "brain trust" that consists of several experts and managers, whom directors and producers can consult when they need assistance (Catmull 2008, 69). There are no obliging note-taking processes and the brain trust also has no authority, and this allows the group to actively question ideas and discuss them more thoroughly (Catmull 2008, 70). This example shows that it is important that people can question and form ideas in a free and respectful manner, so that creative ideas can be further tested for their innovative potentials (Catmull 2008, 69).

Respect for individual responsibility

Respecting individual responsibility is also important for a creative and innovative organizational culture. Lau and Ngo (2004) studied the relationships between HR system, organizational culture, and product innovation. They surveyed 332 Hong Kong firms and findings showed that HR practices must promote and respect individual responsibility, so that creativity and innovation can flourish. Individual responsibility means allowing people to take responsibility for creativity, as well as the innovation process (Lau and Ngo 2004, 689). A critical part of this is training individuals for their roles and responsibilities (Lau and Ngo 2004, 689). Training can improve employees' knowledge and skills that will encourage product development (Lau and Ngo 2004, 689). It also allows for learning and knowledge sharing in organizations (Lau and Ngo 2004, 689). Spell (2001) studied technology-based firms and findings showed that technology affects the cognitive complexity (i.e. a skill needed) of individuals, which stresses the need for developmental activities, and supporting extensive training (cited in Lau and Ngo 2004, 689). Valle, Martin, Romero, and Dolan (2000) also discovered that HR training must be aligned with corporate strategy and work systems, so that innovation can contribute to organizational success (cited in Lau and Ngo 2004, 689). Leede et al. (2002) also stressed from their study that high performance results from investments on education and training, especially on improving skills on communication and team development and dynamics (cited in Lau and Ngo 2004, 689). These studies indicate that individual responsibility is not merely about making people responsible for creative and innovative ideas and products, but also of providing them the knowledge and skills to become innovative individuals.

Shared responsibility of decision-making and problem solving

Organizational cultures that are innovative support shared responsibility of decision-making and problem solving (Rasulzada and Dackert 2009). Rasulzada and Dackert (2009) examined how organizational creativity and innovation affect psychological well-being and organizational factors. Findings showed that the culture must support an organizational climate that endorse shared responsibility of decision-making and problem solving, so that innovation would be a fundamental part of the daily lives of human resources. Sharing these processes support creativity and innovation because group thinking enhances the diversity of ideas and opinions, which can boost the quality and analysis of decisions and solutions (Rasulzada and Dackert 2009, 192).The organizational climate must also allow people to feel and experience that they can share responsibilities in making decisions and solving problems, because this will improve the likelihood of them being more committed and involved with the organization (Rasulzada and Dackert 2009, 192). When this happens, the organizational climate provides the "tone" for creative and innovative energies (Rasulzada and Dackert 2009, 192). Sarros et al. (2008) agreed that shared norms are also critical to boosting innovation, and this can also be related to creating and promoting a system of shared responsibility of decision-making and problem solving (Rasulzada and Dackert 2009). Pixar's creative and innovative culture also comes from its practices of decision-making and problem solving. It has "small incubation teams," wherein directors have to convince the management about the potential of their ideas (Catmull 2008, 68). These teams share decision-making and problem-solving responsibilities, so that they can collectively improve their production (Catmull 2008, 68). These articles demonstrate that sharing decision-making and problem-solving responsibilities also promote creativity and innovation.


Empowerment refers to allowing employees to have the range of autonomy needed to make decisions and solutions that can help them effectively and efficiently perform their roles and responsibilities (Wang et al. 2009, 2). Empowerment is related to respecting individual responsibility and allowing people to reach their optimum potentials (Wang et al. 2009, 2). An organizational culture must also be empowering, so that employees can be more creative and innovative (Wang et al. 2009, 2). Empowerment is provided through support from leaders and managers and developmental processes (Wang et al. 2009, 2). Studies showed that empowering individuals makes them bolder in taking risks and eccentric decisions, in a meaningful and productive manner (Wang et al. 2009, 2; Sarros et al. 2008). Sarros et al. (2008) focused on the importance of participation in the decision-making and problem-solving processes as significant determinants of creative organizational cultures. These articles argue that creativity and innovation are also founded on empowering aspects of organizational culture.

Information sharing

Information sharing as a determinant of creativity and innovation may seem like simple for some, but in reality, people can be protective in sharing information (Rasulzada and Dackert 2009, 194). This can be because of fears of ideas being stolen or even of being embarrassed by others. Creativity, nevertheless, flourishes through information sharing in the active sense (Rasulzada and Dackert 2009, 194). This is related to the larger body of knowledge management, wherein knowledge is created and shared, instead of being secluded for certain people or groups (Rasulzada and Dackert 2009, 194). An organizational culture that promotes information sharing through open communication channels and empowering practices and policies result to creative and innovative people (Catmull 2008; Rasulzada and Dackert 2009, 194).

Top Management Commitment

Top management commitment is critical to many change management and strategic efforts (Catmull 2008; Rasulzada and Dackert 2009). The management must be supportive of innovation and culture, through implementing policies and practices that promote innovation and culture across all levels (Catmull 2008; Rasulzada and Dackert 2009). Studies showed that the commitment of top management to creativity and innovation makes these practices more credible for employees, and more believable as an actual part of the organizational culture (Catmull 2008; Rasulzada and Dackert 2009).

Transformational Leadership

Leadership is important to make a great team work together and to generate great ideas (Catmull 2008, 68). This is different from management, which may be more focused on bureaucratic management functions. Studies showed that transformational leadership help make great teams develop creative ideas (Catmull 2008; Rasulzada and Dackert 2009). Pixar, for instance, underlines that leaders know how to motivate great people to generate new ideas, and to work together for compelling goals and organizational mission (Catmull 2008). The research by Sarros et al. (2008) affirmed that transformational leadership provides the energy and direction needed for complex and changing environments, which thrive on constant creativity and innovation in order to succeed. They added that transformational leadership is important for managing an organizational culture that is conducive to creativity and innovation. These articles highlight that transformational leadership links the organization culture with creativity and innovation.


Firms who are no longer competitive should envy creative and innovative companies, because they will most likely be successful and dominate their industries (Chandler et al. 2000; Christensen 1999, cited in Khazanchi et al. 2007; Rasulzada and Dackert 2009; Sarros et al. 2008). Creativity and innovation can be promoted through a supportive top management and HR practices and policies that support the aforementioned aspects of organizational culture. The top management must verbally and behaviorally embody creativity and innovation. They must be or work with transformation leaders who will also promote the importance of creativity and innovation. Furthermore, it is also important for firms to generate HR practices and policies that promote tolerance of mistakes and eccentricities, support for questions and new ideas, respect for individual responsibility, shared responsibility of decision-making and problem solving, empowerment, and information sharing. In addition, HR must also train management for transformational leadership, which has been greatly linked with creativity and innovation. This way, people will be prepared to take on challenging roles and changes.


Creativity and innovation are not "given" for all organizations, but this paper showed that it is possible to create an organizational culture that supports them. Furthermore, sources underscored the importance of group processes and team efforts to growing, promoting, and maximizing creative individuals. This shows that creativity is not a single-person performance, but a product of a group, or even of many groups, as in the cases of the successful films that Pixar developed. Finally, creativity and innovation are not simple products also, but processes and ways of thinking and interacting that organizations should integrate into their organizational cultures.