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PART FOUR
C H A P T E R T W E L V E
Organizational Culture,
Creativity, and
Innovation 12
Lecture Outline
©2013 Pearson Education, Inc. publishing as Prentice Hall 64
Organizational Culture: Its Basic Nature
Organizational Culture: A Denition
Core Cultural Characteristics
Strength of Organizational Culture
Cultures wWithin Organizations
Forms of Organization Culture
Creating, Transmitting, and Changing
Organizational Culture
How Is Organizational Culture
Created?
Tools for Transmitting Culture
Why and How Does Organizational
Culture Change?
Creativity in Individuals and Teams
Components of Individual and
Team Creativity
A Model of the Creative Process
Promoting Creativity in Organizations
Training People to Be Creative
Developing Creative Work
Environments
The Process of Innovation
Major Forms of Innovation
Targets of Innovation
Conditions Required for Innovation
to Occur
Stages of the Organizational
Innovation Process
Culture, creativity, and innovation are explored in the
context of organizations. The role of culture in
organizations is critical; there are various ways that
organizational cultures di1er from each other.
Organizational culture is a cognitive framework
encompassing the assumptions and values shared by
organizational members. Core cultural characteristics
include sensitivity to others, interest in new ideas, a
willingness to take risks, the value placed on people,
openness of available options, and friendliness and
congeniality. Organizational culture serves three
major roles: (1) sense of identity, (2) commitment to
the organization’s mission, and (3) claries and
reinforces standards of behavior. Organizational
cultures di1er across several dimensions. Factors
including the in9uence of the organization’s
founders, experience with the environment, and
contact between employee groups, are responsible
for creating the culture. Culture is perpetuated
through the use of symbols, slogans, stories, jargon,
ceremonies, and statements of principle. Creativity in
organizations is based on three fundamental
components: (1) dominant-relevant skills, (2)
creative-relevant skills, and (3) intrinsic task
motivation. The relationship between these three
components is multiplicative. Promoting creativity is
accomplished by training, developing creative work
environments, making jobs intrinsically interesting,
and setting creative goals. The creative process
model includes the preparation, incubation,
documentation, and verication of ideas. Major forms
of innovation can be distinguished with respect to the
impact on existing business (sustaining innovation
and disruptive innovation), degree of uncertainty
(incremental innovation and radical innovation), and
source (manufacturer innovation and end-user
innovation). The three key components of the
innovation process are analogous to the components
of the creative process. The motivation to innovate,
resources to innovate, and innovation management
comprise the process. The process occurs in ve
stages: setting the agenda, setting the stage,
producing ideas, testing and implementing, and
assessing outcomes.
©2013 Pearson Education, Inc. publishing as Prentice Hall 65
ANNOTATED OUTLINE
1. ORGANIZATIONAL CULTURE: ITS BASIC NATURE
A. Organizational culture: a denition
1. Organizational culture - a cognitive framework consisting of
assumptions and values shared by organization members
B. Core cultural characteristics
1. Sensitivity to others
2. Interest in new ideas
3. Willingness to take risks
4. The value placed on people
a. Toxic organizational cultures exist when people do not feel
valued
1. Relatively high turnover
b. Healthy organizational cultures exist when people are
treated well and are inspired
2. Relatively low turnover
5. Openness of available communication options
6. Friendliness and congeniality
C. Strength of organizational culture: strong and weak
1. Strong culture – culture exerts a major in9uence on the behavior of
individuals in the organizations
a. Values are held intensely and shared widely
2. Weak culture – culture has a limited impact on the way people
behave
3. Stronger organizational cultures are more common in smaller, newer
organizations
D. Cultures within organizations: one or many?
1. Subcultures ― cultures existing within parts of organizations rather
than entirely through them
2. Dominant culture ― distinctive, overarching “personality” of an
organization
a. Re9ects core values – the prevailing perceptions that are
generally shared throughout the organization
E. The role of organizational culture
1. Culture provides a sense of identity
2. Culture generates a commitment to an organization’s mission
3. Culture claries and reinforces standards of behavior
F. Forms of organizational culture: the competing values framework
1. Competing values framework ― cultures of organizations di1er with
respect to two sets of opposite values
a. Flexibility and discretion as opposed to stability, order, and
control
b. Attention to internal a1airs as opposed to what’s going on in the
external environment
2. Four unique types of organizational culture:
a. Hierarchy culture ― internal focus, stability, and control
b. Market culture ― stability and control, but external in their
orientation culture
©2013 Pearson Education, Inc. publishing as Prentice Hall 66
c. Clan culture ― strong internal focus with high degrees of
9exibility and discretion
d. Adhocracy culture ― 9exibility yet attending to the external
environment
2. CREATING, TRANSMITTING, AND CHANGING ORGANIZATINAL CULTURE
A. How is organizational culture created?
1. Two key factors:
a. Company founders
b. Experiences with the external environment
B. Tools for transmitting culture
1. Symbols ― material objects that connote meanings that extend
beyond their intrinsic content
2. Slogans – send messages about the cultures of the organizations that
use them
3. Jargon ― the special language that denes a culture
4. Ceremonies ― special events that commemorate corporate values
5. Stories ― illustrate key aspects of an organization’s culture; telling
them can e1ectively introduce those values to employees
6. Statements of principle ― dene culture in writing
C. Why and how does organizational culture change?
1. Composition of the workforce
2. Mergers and acquisitions
a. Culture clashes ― merger of two organizations with
incompatible cultures
3. Strategic organizational change
4. Responding to the Internet
Winning
Practices
Organizational Culture for Sale
Use Winning Practices for a discussion on strategic change and organizational culture.
3. CREATIVITY IN INDIVIDUALS AND WORK TEAMS
A. Components of individual and team creativity
1. Domain-relevant skills ― skills and abilities necessary to perform tasks
2. Creativity-relevant skills ― special skills that foster creativity
a. Break mental sets and take new perspectives
1. Divergent thinking ― process of reframing familiar
problems in unique ways
©2013 Pearson Education, Inc. publishing as Prentice Hall 67
Self-Assessment Exercise Who’s Most Like a Gira1e?
Students should consider the following upon completion of the exercise.
1. Was completing this exercise helpful in getting you to think about things in unusual
ways? Why or why not?
2. Do you believe that thinking about things from unusual perspectives will help you
think more creatively in other ways, such as your job? If so, for how long do you
think this will last?
3. In what ways do you think that being more creative will help you in your current jobs?
How about in a job you hope to have someday? Might there be any ways in which
being especially creative will be a hindrance?
4. So, who’s most like a gira1e, anyway?
3. Intrinsic task motivation ― what people are willing to do
a. The motivation to do work because it is interesting, engaging,
4. People will be at their most creative when they have high amounts of
B. A model of the creative process
1. Prepare to be creative
4. PROMOTING CREATIVITY IN ORGANIZATIONS
A. Training people to be creative
1. Encourage openness to new ideas
a. Thinking outside the box
b. Thinking expeditions
2. Set creative goals
B. Developing creative work environments
1. Provide autonomy
5. THE PROCESS OF INNOVATION
Innovation ― the successful implementation of creative ideas within an
A. Major forms of innovation
1. Impact on existing business
a. Sustaining innovation – the “better mousetrap”
©2013 Pearson Education, Inc. publishing as Prentice Hall 68
b. Disruptive innovation – completely changes the market
2. Degree of uncertainty
a. Incremental innovation – slow and steady approach to
b. Radical innovation – quantum leaps in innovation
3. Source of innovation
a. Manufacturer innovation – occurs when an individual or
b. End-user innovation – involves getting inspiration from users
B. Targets of innovation
1. Product innovation – introducing goods that are new or substantially
2. Service innovation – introducing services that are new or
3. Process innovation – creating new or signicantly improved
4. Marketing innovation – coming up with new and/or improved
C. Conditions required for innovation to occur
1. Motivation to innovate ― organization culture must encourage
2. Resources to innovate ― basic resources that make innovation possible
3. Skills to manage innovation
a. Goals carefully linked to mission
D. Stages of the organizational innovation process
1. Stage 1: setting the agenda
a. Creating a mission statement - provides overall direction and
2. Stage 2: setting the stage
a. Using skills for innovation management
3. Stage 3: producing the ideas
a. Individual and small group creativity
4. Stage 4: testing and implementing the ideas
5. Stage 5: outcome assessment
You Be the Consultant Suggested Answers
©2013 Pearson Education, Inc. publishing as Prentice Hall 69
1. What factors do you suspect are responsible for the way the culture in this
organization has been over the years?
Student answers will vary. Key points are presented in bullet form.
2. What do you recommend should be done to enhance the creativity of this company’s
employees?
3. What could be done to help make the company’s products more innovative?
Train employees
©2013 Pearson Education, Inc. publishing as Prentice Hall 70
