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Innovation Capability in High-Tech Companies: Exploring the Role of Organizational Culture and Empowerment
Abstract
This chapter analyses the influence of organizational culture components, defined in Hofstede’s (1991, 2001) cultural framework (i.e., power distance, individualism/collectivism, assertiveness focus, and uncertainty avoidance), and empowerment on innovation capability, and examines the differentiations in their influence. The hypotheses are tested by applying Structural Equations Modeling (SEM) methodology to data collected from Information Technology professionals from high-tech companies. Results of the analyses have yielded that power distance is found to be negatively associated with both empowerment and innovation capability, whereas uncertainty avoidance is negatively related to innovation capability, but positively related to empowerment. Collectivism is found to be positively related only to empowerment; yet no significant relationship was revealed between collectivism and innovation capability. In addition, no significant relationship was found between assertiveness focus and empowerment or innovation capability. Empowerment is also found to be significantly and positively related to innovation capability. In terms of managerial practice, the study helps clarify the key role played by cultural dimensions in the process of shaping an empowering and innovative work environment. Findings also reveal that managers should focus on participative managerial practices (e.g. empowerment) to promote innovation capability of high-tech companies by considering the cultural tendencies of employees in the organization.
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