Organizational psychology and transition processes

La psychologie des organisations et les processus de transition

Zoran SusÏanj

Innovative climate and culture in

manufacturing organizations: differences
between some European countries

Abstract. In the last decade there has been a growing emphasis on the role of
pro-innovative climate and culture in organizational adaptiveness and overall
company success. In spite of the growing interest among scholars and practitioners,
there is a lack of cross-national studies that explore innovative climate and culture
differences. The present study is an attempt to examine the content of the differences in
innovative climate and culture in various European countries. A questionnaire for
measuring several organizational climate and culture orientations was used. In the
present article, only items from the climate and culture innovation scales are analysed.
Data were gathered ± in the context of the international FOCUS (First
Organizational Climate/Culture Uni®ed Survey) project ± from 21 manufacturing
organizations in 11 European countries. Discriminant function analysis was used to
discover which climate and culture innovation items are the best predictors of
differentiation between countries. The results show that the countries from Central and
Eastern Europe have a relatively distinct position from the countries with a longer
market economy tradition. Some methodological problems of this study, as well as the
implications of the results for organizational change and development, are discussed.

Key words. Cross-national differences ± Organizational climate ± Organizational

culture ± Organizational innovation

This article is a revised version of a communication presented at the Conference on Organiza-

tional Psychology and Transition Processes in Central and Eastern Europe held in Dubrovnik,
Croatia, 30 September±3 October 1998.

Social Science Information & 2000 SAGE Publications (London, Thousand Oaks, CA and New
Delhi), 39(2), pp. 349±361.
0539-0184[200006]39:2;349±361;013124
350 Social Science Information Vol 39 ± no 2

Introduction

Both scholars and practitioners are today increasingly concerned

about organizational innovation. The reason for this interest has
to do with the crucial role of organizational innovation in company
success or failure. Many companies today are confronted with
environments that have become dynamic and uncertain due to the
accelerated pace of technological change coupled with increasing
competition in the global marketplace. This is especially true for
manufacturing organizations or production ®rms. If such companies
are to survive and grow, they must adapt to various and rapid
changes in the technological, economic, political and socio-cultural
environments. These adaptations involve more than minor adjust-
ments to the current way of doing things; they call for overall
organizational innovation.
Organizational innovation is de®ned in many different ways,
ranging from very broad and imprecise generalizations to highly
speci®c focusing on technical innovations. A useful distinction can
be drawn between de®nitions that conceive of innovation as a pro-
duct or an outcome and those that envisage innovation as an emer-
gent process in work settings (Anderson and King, 1993). This is
similar to the differentiation of West and Altink (1996), who use
the terms technical and administrative innovations, of Damanpour
(1990), who differentiates between technological, administrative
and ancillary innovation, and of Schein (1990), who speaks of con-
tent and role innovation. One of the most cited de®nitions that
encompasses this variety describes innovation as ``the intentional
introduction and application within a role, group or organization
of ideas, processes, products or procedures, new to the relevant
unit of adoption, designed to signi®cantly bene®t the individual,
the group, organization or wider society'' (West and Farr, 1990:
9). The diversity in the de®nitions of organizational innovation is
due in part to the different operationalizations that often simply
re¯ect the type of innovation found in the particular organization
under study. But it is also a result of different scienti®c or practical
interests and research problems.
Research on organizational innovation addresses a wide range of
issues, which can be summarized in three broad categories based on
fundamental questions about innovation (Anderson and King,
1993). The ®rst group of studies is concerned with identifying factors
 SusÏanj: Organizational psychology and transition processes 351

that facilitate or inhibit the production, adoption and/or implemen-

tation of innovations by organizations. The second deals with the
nature of the innovation process and possible ways of managing
it. The third group examines the differences between various types
of innovation.
The largest proportion of research falls into the ®rst category. The
main group of factors that have been suggested as helping or hinder-
ing organizational innovation are people, structure, organizational
environment and organizational climate and culture (King and
Anderson, 1995). In the present study, an attempt is made to
examine the last two factors, which are commonly recognized as
antecedents or important intervening variables for organizational
innovation (Morgan, 1986).
There is no consensus on the precise dimensions of pro-innovative
climates and cultures. In the innovation literature, treatment of these
factors is mainly theoretical (e.g. Schein, 1990), with only a few
empirical studies of climate and culture (e.g. Nystrom, 1990). How-
ever, some aspects of these constructs are commonly suggested as
being facilitative of innovation: support for ideas, willingness to
tolerate failure, challenge, risk-encouragement, playfulness and
debates, trust, freedom, harmony, a certain level of con¯ict, partici-
pative decision-making and pragmatism.
In spite of this increasing interest among scholars and prac-
titioners, and a growing innovation literature, there is a lack of
cross-national studies on innovative climate and culture differences.
Exploring the content of these differences among a number of
European countries is therefore the main aim of this study.
Climate and culture are similar constructs. Climate is de®ned as
sets of perceptually based descriptions of relevant organizational
features, events and processes (James and Jones, 1974). Culture is
de®ned as a set of core values, behavioural norms, artefacts and
behavioural patterns which govern the way people in an organiza-
tion interact with each other and invest their energy in their jobs
and in the organization at large (van Muijen et al., 1992). From
these de®nitions, it can be seen that both climate and culture are
concerned with the meaning people attach to their organizational
environment (Rentsch, 1990). Both constructs deal with the ways
in which organization members make sense of their environment,
which further affects their behaviour in the organization. In spite
of this, culture theories and research have been developed almost
352 Social Science Information Vol 39 ± no 2

independently of climate research. Only recently was it suggested

that the two constructs might be used to complement each other
conceptually, methodologically and in practice (Reichers and
Schneider, 1990; Denison, 1996).
There are at least two reasons for this separation of climate
research from culture research. The ®rst one is methodological:
climate is traditionally measured by quantitative methods, while
the qualitative approach is still dominant in culture measurement.
The second reason is in the structure of climate and culture. In
other words, the results of empirical research usually show that
different sets of factors, or rather different numbers and contents
of the basic dimensions, underlie the two constructs. An attempt
to resolve these problems has been made recently by a group of
European researchers within the FOCUS (First Organizational
Climate/Culture Uni®ed Survey) project (De Cock et al., 1989).1
The project is based on the assumptions that it is possible to measure
both constructs quantitatively and that the description of the basic
dimensions for both constructs can be resolved using the same
theoretical model. The general theoretical framework that served
for the operationalization of both climate and culture is the ``com-
peting values approach'' (Quinn and Rohrbaugh, 1983; Quinn,
1989).
The model of competing values was originally developed to
describe values underlying organizational effectiveness. This model
is a powerful device that can also be applied to the operationaliza-
tion of organizational climate and culture. The framework suggests
two orthogonal dimensions underlying organizational functioning:
control versus ¯exibility and internal versus external focus. The
combination of these dimensions yields a circumplex model with
four basic organizational culture orientations or ``anchors'' which
describe an organization: support (orientation toward ¯exibility
and internal focus), innovation (orientation toward ¯exibility and
external focus), goals (orientation toward control and external
focus) and rules (orientation toward control and internal focus).
On the basis of two pilot studies, the FOCUS group has developed
a questionnaire for measuring organizational climate and culture in
the context of the competing values approach. The questionnaire
has two parts. The ®rst is an organizational climate measure (percep-
tions of organizational practices) and consists of 40 items measuring
four basic climate factors. The second part is meant to measure
 SusÏanj: Organizational psychology and transition processes 353

organizational culture (norms and values) and consists of 35 items

measuring four basic culture orientations. The FOCUS question-
naire shows satisfactory validity and reliability (e.g. van Muijen,
1994), and allows valid cross-national and cross-organizational
comparison.
Previous research shows that the innovative orientation is a better
predictor of differentiation between countries than other orien-
tations (SusÏ anj and Konrad, 1996; Konrad and SusÏ anj, 1999).
Speci®cally, the results of these studies suggest some hypotheses
about the possible differences in organizational culture orientations
between East and West European countries. For instance, innova-
tive and supportive organizational culture orientations were highly
pronounced in most West European organizations, while in the
Eastern and Central European organizations the innovative culture
orientation was lower. The main reason for these differences,
especially in the innovative orientation, is probably the centrally
planned economy: markets lacking demand, supply and com-
petition, and an overall lack of risk- and responsibility-taking in
former socialist countries (van Muijen et al., 1993). Since support
and innovation culture orientations express a higher level of organi-
zational ¯exibility, they represent the ``soft'' part of organizational
processes whose development depends on the level of industrial
democracy. At the same time, research shows that an emphasis on
a ``hard'' approach to organizational functioning (e.g. rules±culture
orientation) was present in both capitalist and former socialist
countries, and did not clearly differentiate East from West (SusÏ anj
and Konrad, 1996).
According to the studies just mentioned, innovative culture orien-
tation is more characteristic of the West than the East European
organizations. Whatever the reason for the difference is, it is of
interest ± especially for countries in transition ± to look at the
observed differences in more detail. In this study, therefore, our
comparison of the countries concentrates solely on employees'
perception of the innovative climate and culture orientation. The
®rst goal of the present study is to test the hypothesis that the two
groups of countries differ signi®cantly on the innovative climate
and culture scales. Our second objective is to look into the observed
differences in greater detail.
354 Social Science Information Vol 39 ± no 2

Method

Respondents

This study uses data collected, in the context of the FOCUS project,
from 21 manufacturing organizations in 11 European countries. In
each organization, a strati®ed sample of about 50 employees was
used, adding up to a total of 1009 respondents. Each sample was
composed of approximately 10 percent upper managers, 30 percent
middle managers and 60 percent production employees.

Measures

For the purposes of this study, only data from the innovative climate
(12 items) and innovative culture (7 items) subscales of the FOCUS
questionnaire were used. For the descriptive part, or innovative
climate, the respondents were asked to rate, on a six-point scale
(from ``never'' to ``always''), the frequency of certain practices in
their organization.
Here is the list of innovative climate items:

1. How often do people try out new ways of working?

2. How often are people expected to invent new ways to solve
problems?
3. How often do you have to change from one task to another?
4. How often does your organization search for new markets for
existing products?
5. How often is there a lot of investment in new products?
6. How often is there pressure on the R & D process because of
external demands?
7. How often do unpredictable elements in the market environ-
ment present good opportunities?
8. How often does the market environment demand changes in
your work?
9. How often does the company make the best use of its technology
to develop better products?
10. How often does the organization search for opportunities in the
external environment?
11. How often does the company make the best use of the
employees' skills to develop better products?
 SusÏanj: Organizational psychology and transition processes 355

12. How often does the organization search for new markets for
new products/services?

For the evaluative part, or innovative culture level, subjects were

asked to rate, on a six-point scale (from ``not at all'' to ``very typi-
cal''), how typical for their organization these values were: (1)
risk-taking; (2) openness to criticism; (3) being in the forefront of
new technology; (4) ¯exibility; (5) challenging old ideas; (6) search-
ing for new markets; and (7) pioneering.

Results and discussion

Two one-way analyses of variance were carried out to examine

whether the employees from various countries differ on the innova-
tive climate and culture orientations. The existence of differences
was con®rmed: F-ratios for the composites of innovative climate
and culture subscales were 24.36 and 27.70 respectively. Both
values were statistically signi®cant at the 0.001 level with 880 and
940 degrees of freedom respectively. Post hoc comparisons
(Student-Newman-Keuls test) showed that the differences between
most countries were signi®cant.
To examine the content of these differences, two separate discri-
minant analyses were performed. In the ®rst analysis, 12 innovative
climate scale items were used as predictors of country membership.
The second used 7 items from the innovative culture scale. Thus in
both analyses an attempt was made to examine the combined ability
of innovative items to distinguish between employees from different
European countries. The statistical objective of the procedure was to
weight the innovative items in such a way that country patterns were
made as distinct as possible. Of the original 1009 responses, 128 for
climate and 68 for culture were dropped from the analyses because
at least one discriminating variable was missing.
Discriminant analysis for the innovative climate part yielded
seven statistically signi®cant canonical discriminant functions. How-
ever, since the ®rst two accounted together for 57 percent of the
between-country variability, only these functions were retained for
further consideration.
By examining the correlations between discriminant variables and
each function, it is possible to interpret the differences between
countries. The matrix of the signi®cant correlations between
356 Social Science Information Vol 39 ± no 2

TABLE 1
Correlations between the innovative climate discriminating variables and the ®rst two
canonical discriminant functions

Item D.f.1 D.f.2

5. How often is there a lot of investment in new .75 ÿ.04

products?
9. How often does the company make the best use .58 ÿ.46
of its technology to develop better products?
2. How often are people expected to invent new .55 ÿ.31
ways to solve problems?
3. How often do you have to change from one .05 ÿ.62
task to another?

predictor variables (innovative climate items) and the ®rst two dis-
criminant functions is presented in Table 1. The plot of country cen-
troids for the ®rst two discriminant functions is shown in Figure 1.
The ®rst discriminant function in the innovative climate analysis
combines items dealing with the perceived organizational develop-
ment of new and better products and new ways of solving problems.

FIGURE 1
The position of countries based on the ®rst two discriminant functions:
innovative climate
 SusÏanj: Organizational psychology and transition processes 357

This is the largest differentiation between countries obtained.

Countries with a longer tradition of market economy are in a
better position here than those from Central and Eastern Europe.
On the second discriminant function, which is related to the
perceived frequency of changing tasks during work, the East±West
differences are not as obvious.
Discriminant analysis for the innovative culture part revealed ®ve
statistically signi®cant canonical discriminant functions. Since the
®rst two accounted together for 76 percent of the between-country
variability, only these functions were retained for further considera-
tion. The matrix of signi®cant correlations between predictor vari-
ables (innovative culture items) and the ®rst two discriminant
functions is presented in Table 2. The plot of the ®rst two discrimi-
nant functions with the country centroids is shown in Figure 2.
Again, only the ®rst discriminant function shows a clear East±
West distinction, which is related to perceived organizational
values such as pioneering, being in the forefront of new technology
and searching for new markets. It seems that these values should be
taken into account when planning organizational change and devel-
opment programmes for countries in transition.
Challenging old ideas is the item with highest saturation on the
second discriminant function. The (reverse) meaning of that item
is substantially similar to the uncertainty avoidance dimension
found in studies of national culture differences (Hofstede, 1991). It
is usually de®ned as ``the extent to which members of a culture
feel threatened by uncertain or unknown situations'', and can
be expressed by the credo that ``what is different, is dangerous''
(Hofstede, 1991: 119). A practical consequence of a strong un-
certainty avoidance culture in the workplace is many precise rules

TABLE 2
Correlations between the innovative culture discriminating variables and the ®rst two
canonical discriminant functions

Item D.f.1 D.f.2

How typical for your organization is:

7. pioneering .86 ÿ.12
3. being in the forefront of new technology .73 ÿ.39
6. searching for new markets .61 ÿ.00
5. challenging old ideas .39 ÿ.50
358 Social Science Information Vol 39 ± no 2

FIGURE 2
The position of countries based on the ®rst two discriminant functions:
innovative culture

and regulations which have to be obeyed, not challenged or changed.

The countries with a relatively high uncertainty avoidance index
(Portugal, Greece, France and Italy) are, as expected (in contrast
to Belgium and Spain), lower on the second discriminant function.
There are some methodological weaknesses in this research that
should be addressed. First, the fact that the number of organizations
in each country is relatively small may reduce the reliability of the
results obtained. Second, there is a problem of sampling adequacy
at different levels: within organizations (number of managers and
non-managers), within the manufacturing sector (type of products)
and within countries (percentage of production ®rms). Because the
sampling instructions were not strictly followed in all countries,
the results may re¯ect some uncontrolled in¯uences. For instance,
independently of country membership, higher scoring can be
expected on innovative climate and culture scales for respondents
having a higher position in the organization (managers), or working
in organizations that produce speci®c types of products (e.g. com-
puters or electronic equipment). Third, comparisons made at only
one point in time, as in the present study, need to be complemented
by longitudinal studies in order to gain more insight into these
dynamic phenomena, especially in the context of transition.
 SusÏanj: Organizational psychology and transition processes 359

In innovation literature, there is a dangerous tendency to be nor-

mative, that is, to suggest that particular antecedents will facilitate
innovation in almost any organization. Nevertheless, in the case of
pro-innovative climate and culture, there is overall agreement on
their characteristics. Theoretically, innovative orientation is charac-
terized by searching for new information in the external environ-
ment, advocating changes, taking risks, creativity, competition,
experimentation, both task- and person-oriented leadership, power
based on knowledge and problem-solving ability, constantly
improving knowledge and skills, and informal communication.
Brie¯y, the innovative orientation of an organization is included
in a de®nition of what is nowadays called the ``learning organiza-
tion'' (Senge, 1990). According to the competing values approach,
in learning organizations climate and culture involve some charac-
teristics that belong not only to innovative but also to some other
orientations (support and goals). However, these characteristics
and their impact on organizational competitive advantage are
rarely examined empirically in a cross-cultural perspective.
The results obtained in this study suggest some possible targets for
organizational culture change in transition countries. It will not be
enough to increase investment in new products or improve tech-
nology for developing better products and inventing new ways of
solving problems; it is also important to develop a culture that
emphasizes speci®c innovative organizational values, such as
pioneering, being in the forefront of new technology and searching
for new markets. The meaning of these values guides the behaviour
of the members of the organization, and is thus important for devel-
oping strategies for improving organizational ef®ciency in Central
and East European countries.
Zoran SusÏanj is a research assistant at the University of Rijeka. He is currently
completing a doctoral dissertation at the University of Zagreb on organizational
climate and culture in the context of the competing values approach. Author's
address: Department of Psychology, Faculty of Philosophy, University of
Rijeka, I. KlobucÏarica 1, 51 000 Rijeka, Croatia. [email: zsusanj@human.pefri.hr]

Note
1. The members of the FOCUS-93 group are: Gaston De Cock, Karel De Witte,
Belgium; Zoran SusÏ anj, Croatia; Claude Lemoine, France; Dimitris Bourantas,
Nancy Papalexandris, Greece; Imre Branyiczki, Hungary; Enzo Spaltro, Italy;
360 Social Science Information Vol 39 ± no 2

Paul Koopman, Jaap van Muijen, Netherlands; Jose Gonsalves Das Neves,
Portugal; Horia Pitariu, Rumania; Edvard Konrad, Slovenia; Jose Peiro, Vincente
Gonzales-Roman, Spain.

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