Organizational Culture – Prerequisite of an Innovative Behavior in

Business
Dorin MAIER, PhD ec., PhD eng., Technical University of Cluj Napoca, Romania, E-mail:
[email protected] – corresponding author
Robert BUMBAC, PhD ec., The Bucharest University of Economic Studies, Romania,
[email protected]
Cristian ILIE, PhD Student, The Bucharest University of Economic Studies, Romania,
[email protected]
Andreea MAIER, PhD, Technical University of Cluj Napoca, Romania,
[email protected]

Abstract
Organizational culture has an important contribution to the proper operations of a successful
organization by fostering communication, integrating new members, creating trust and adopting
common means to set and achieve goals. The purpose of this paper is to highlight the relationship
between organizational culture and the competitiveness level of the organization. We identified the
components of the organizational culture and its manifestation forms, the dimensions of the
organizational culture of an innovative company and the elements of innovation-oriented
organizational culture. For a better perception of the mangers point of view of the implications of a
good organization culture we conducted a survey on several organizations. The results of our study
reveal that managers are aware of the importance of organizational culture in their business success
and also that a good innovation culture can bring them important competitive advantages.
Keywords: Organizational culture, innovative organization, innovation culture,
competitive advantages

1. Introduction
The concept of organizational culture is often present in management studies nowadays, and it took
an important place also in any activity that deals with organizational behavior. Although always
characterized the overall performance, organizational culture has become the subject of debate
especialy in the last 25 years, due to the increasing interest of managers in identifying elements that
distinguish success and failure within an organization.
Like many other management concepts, organizational culture is difficult to be define, and there is
still no unanimously accepted vision among practitioners or academia (Vrânceanu and Iorgulescu,
2016). Thomas J. Peters and Robert H. Waterman, in the successful bestseller “In Search of
Excellence”, defined the organizational culture as “a dominant and coherent set of shared values
transmitted in ways more or less symbolic”. The two authors had an extremely important contribution
to the spread of this concept, proving in concrete cases that there is a close link between
organizational culture dimension and the performance of well-known corporations.
The author Antonio Strati consider that “organizational culture is a set of symbols, beliefs and
behavior patterns learned, produced and recreated by people who devote their energy and work to an
organization’s life. It is expressed in the design of organization and work, in the constructed
manifestations of culture and in the services the organization produce” (Strati, 1992; Gănescu 2011).
As a philosophy of the firm, in the conception of Romanian authors Tatiana Gavrilă and Viorel Lefter,
the organizational culture reflects “managers” thinking, ethical standards, behavioral patterns, adopted
management policies, traditions, attitudes and specific events that marked the evolution of the
organization” (Gavrilă, 2002; Gănescu, 2011).
In his profoundly practical and extremely original work, author Samuel Certo defines organizational
culture as “a series of values and common beliefs that members of the organization have regarding the
functioning and existence of their organization” (Certo, 2002; Gănescu, 2011).

2. The components of organizational culture and its manifestation

forms
In order to have a positive impact on the efficiency and evolution of an enterprise, organizational
culture must be known and accepted by most of its employees. Managers, through their actions, must
identify the cultural elements that hinder the development of the organization and transform them
into attitudes, values and behaviors that favor the achievement of organization goals. Being
understood and accepted, these elements constitute an engine that drives the continuous growth of the
company.
Each organization has its own identity because its personality is created, first and most often, by
people who work for it, with their values, beliefs and attitudes. By identifying new values, beliefs,
attitudes, habits or norms within the organization, people are the ones that either assimilate them or
they try to impose their own beliefs.
According to Alexandru Puiu, organizational culture can be addressed at different levels and
dimensions: the visible level and the invisible level (Puiu, 2007) as it can be seen in Figure 1.

Figure 1. Levels of organizational culture

 The visible level includes:

- physical products, as tangible components of organizational culture, consisting of:
buildings, furniture or other accessories, equipment, fixtures, clothing, architecture,
decoration style, figures and objects representing certain signs (organization chart,
architecture, manager office, manager’s cars, parking);
- verbal products, which refer to the language used, myths, metaphors, slogans, stories, that
is the folklore of any organization; through language, perceptions and representations
people get understood;
- behavioral products that refer to rituals, ceremonies, internal codes of behavior, how the
business is presented in relation to the outside, behavioral habits, gestures that give
employees group membership; through these elements, unethical behaviors which
contravenes the values, norms and rules that characterize the organization are identified
and sanctioned.

 The invisible level is composed of: values; organizational, coordination, foresight, training,
control capabilities; knowledge; motivation and satisfaction of employees.
Understanding the appropriate level and its innovation dimensions and forms is crucial for the
organization in building a solid organizational culture (Pamfilie, Ruzevicius and Bumbac, 2017).
3. Dimensions of the organizational culture of an innovative company
A strong organizational culture would be one in which there is a strong alignment with the
organization’s values and principles. An organization with an appropriate culture does not need
control and bureaucratic systems. People working in an organization in which there is a strong culture
do not need extra encouragements, already accept unconditionally the “rules of the game” and the
organization manages to form a positive type of a necessary employee. In this way the organization
culture could lead to an open innovation approach, with better results for innovation efforts (Olaru et
al., 2015).
Statistical surveys led to the definition of six fundamental dimensions for the organizational culture
of an innovative company presented in Figure 2:
 process orientation vs. results  the open system in relation to the
orientation; closed system;
 orientation towards employees in  intense control over reduced control;
relation to work orientation;  pragmatic, in relation to prescriptive
 the intra-organizational in relation to (normative).
the professional;

Figure 2. Dimensions for organizational culture (***, 2019)

4. Elements of innovation-oriented organizational culture

The relationship of organizational culture and innovation has been the subject of different research
over the last years. The multitude of cultural variables under investigation has led to a fragmented
concept of culture for innovation. Further, managerial practice requires an underlying structure in
order to decide what culture should be implemented in order to innovate and to assess if a specific
culture is an effective and efficient coordination instrument (Szczepańska-Woszczyna, 2014).
Culture is the main form of expression for people that reveal their beliefs and behaviors and explain
their evolution in time. Culture is an inheritance transmitted from one generation to another as a mix
between past and present factors that are shaping it. In the same way the innovation culture reflects
people’s ideas, beliefs and behaviors that contribute and makes innovation possible in a conscious
and organized way. Unfortunately, creating an innovation culture is not so simple, reason why few
organizations have and apply one. More efforts would be needed to develop de appropriate
components of an innovation culture, and the organizations should understand its benefits and to
invest resources accordingly.
The main steps that should be done by organization leaders in creating an innovation culture should
be to (Langdon Morris, 2017):
 Search for insights in developing new ideas, and afterwards transforming them into
innovations.
 Encourage and support creative people to overcome problems that limits their innovation
results
 Clearly define and include innovation in the organization expectations and policies.

4.1. Methodology of research

In order to study the importance of organizational culture, we decided to question a representative
number of companies in order to obtain more data on their organizational culture (Figure 3) and we
used several stages of the random sampling method by identifying a group of participants and
including their answers in the analysis.
In establish the sample, we considered the total statistical volume of population in the North-West
region using the data provided by the Statistical Yearbook of Romanian in 2018. Thus, the volume of
the total collectivity was considered in established the optimal number of statistical units needed to be
included in the survey for the sample to be representative. We determined the sample size using the
Taro Yamane formula. With a probability of 95% and an admissible error of maximum +/- 5%, for a
total of 7988 companies we obtained a necessary sample of 431 firms. We asked managers from 431
firms to respond on method they use in measuring innovation within the firm and we recorded
responses from 112 organizations.
The questionnaire was structured in two main parts. The first one had as main purpose to identify
data and information about respondents and the second one focused on identifying the importance of
organizational culture and an innovative culture in the organization. As participants in the study there
were selected those organizations with headquarter in Romania. There were companies with more
than 50 employees both from the production and service sectors.
For this study the relevant questions asked in the interview were:

1 How important to your business success is the organizational culture?

2 Please appreciate the importance of the innovation culture for the

competitiveness of your organization.

3 Please appreciate the importance of the following elements for an innovative

climate.

At the third question we provide a list of seven elements that we consider to be important in an
innovative organization. The elements include included freedom of expressing their opinions by
employees, a possibility to propose and support new ideas, collaboration between employees of
different organizational units. The evaluation of importance was done on a 5-point scale as 1 being
unimportant and 5 being very important. The list of the seven elements that we consider to be very
important for an innovative culture within an organization are: 1. The ideas of superiors can be
questioned by employees; 2. The organization support the new ideas of employees; 3. The
organization appreciate the employees who have courage to express their own opinions; 4. Each
employee may express own opinion, but it is a manager who takes a final decision; 5. The proposal of
new ideas can be done by employees from any level; 6. Within the organization exist a cooperation
between each employee. 7. The problems are solved independently by the employees.
4.2. Results analysis
A fierce competition, brief market niches, and frequent changes in product demand characterize the
new economic environment, a globalized one. The organizations will have to face more and more
frequently and unpredictable changes on the globalized market. In order to be competitive and to be
able to capitalize any opportunity, the organizations will have to develop new ways of management,
which must adapt and to be able to predict, as quickly as possible, the apparition of various changes.
A key consideration for companies is their ability to adapt and innovate. The purpose of innovation is
mostly to survive, to grow, to make a profit, but what matters for innovation is how it affects the
chances of survival, profit and growth opportunities
Innovation is an important process that few companies have mastered it well. The main reason for
this is that the innovation process is not fully understood or implemented by organizations. This
happens because of the lack of maturity of the innovation culture.
A 62 % of the 112 organizations interviewed considered the organizational culture (Table 1) to be
very important for their business. A percentage of 19% of those interviewed considered that the
organizational culture to be of no importance to their organization.

Table 1. The importance of organizational culture for organizations

Very Importan
Appreciation Average importance Unimportant
important t

Percentage of firms 62 % 13 % 6% 19 %

While in the case of the organizational culture a big percentage (75%) of the surveyed organizations
consider it important and very important, in the case of the innovative culture the percentage are
similar (Table 2). By formulating the question, we connect the innovation culture directly with the
competitiveness of the organization so a percent of 70% of respondents consider it important and
very important. As in the case of the importance of organizational culture the percent of the
managers that consider the innovative culture unimportant for their competitiveness is quite high,
21%.

Table 2. The importance of innovative culture for organization competitiveness

Very Importan
Appreciation Average importance Unimportant
important t

Percentage of firms 53% 17 % 9% 21 %

It is clear that managers are aware of the importance of organizational culture and the innovation
environment for the competitiveness of the organization in today’s harsh economic context. One of
the key elements of an innovative organization is the support an encouragement of employees to
evolve in the innovation process. In this context mangers of the surveyed organizations were asked to
appreciate the importance of a set of seven elements that we consider to be vital for an innovative
climate. The rating of responses (Figure 3) indicates that the most important elements in the vision of
the surveyed organizations are the one related to the role of managers as the final decision factor and
the one related to the cooperation within the organization. The elements that were evaluated as less
important by the surveyed organization were the ones that give a certain independence for the
employees.

4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
1
2
3
4
5
6
7

Figure 3. Appreciation on the importance of the main elements of the innovative culture in an
organization
1. The ideas of superiors can be questioned by employees; 2. The organization support the new ideas of
employees; 3. The organization appreciate the employees who have courage to express their own opinions;
4. Each employee may express own opinion, but it is a manager who takes a final decision; 5. The proposal
of new ideas can be done by employees from any level; 6. Within the organization exist a cooperation
between each employee. 7. The problems are solved independently by the employees.

As the literature studies show, an element of innovation-oriented culture is the appropriate

organization of work and working conditions encouraging employees to be creative. As shown in
Figure 3 the fourth innovative culture element of existing the possibility to express their ideas but the
final decision should be taken by the manger was rated as being very important (4.5 the average
raking) in an organization. The respondents rated also as being very important the sixth element of
cooperation between each employee. The innovative elements which were evaluated as les important
(1.5 average ranking) by the surveyed organizations are the first and the seventh one. The first
element is the one that allows employees to question the superior ideas and the seventh element is an
element in which for each problem that they face the employees should solve them independently and
not request help from their superior.

5. Discussions and Conclusions

A good innovation culture can generate innovation results which are turned into significant
advantages and increased profit for the organization and also can bring small outsiders in dominant
position. The idea in the case of successful innovations is to understand customer needs and to
develop products and services that satisfy those needs. In the same time the unpredictable character
of innovation can led to loses in the case of failed innovation projects.

The results of our study reveal that managers are aware of the importance of organizational culture
for their business success and also that a good innovation culture can bring them competitive
advantages. In the same time innovation is a complex phenomenon, its success depends on a series of
factors that cannot be controlled or exactly predicted. Innovation involves novelty, and to obtain
novelty organizations should always force the limits. A very small percent of successful innovations
came as a result of a genius idea; most of the innovations are the results of hard work performed
during an innovation process. In order to have positive results with the innovation process, a
successful organizational innovation culture must exist to make possible the transformation of ideas
into innovation.

Although many organizations are aware of the importance of innovation in the current economic
context, there is still a big innovation resistance among managers. This can be seen in the results
recorded in evaluating the importance of different elements of an innovative culture, where managers
are still having a reluctance not to have a total control over their employees. One explanation can be
that in this study there were included organizations from Romania, being a former communist
country where there is still the need for an iron hand to lead everything. At the same time one
purposes of this study was to highlight an important feature of innovation-oriented culture being
“change” and the willingness of employees to risk. It should be noted that during periods with high
unemployment, stabilization of employment (a secure work contract) may be a more important
motivating factor to work.

The organizational culture may be a favorable element in the development of innovative activities
and one single universal model of organizational culture cannot be determined. The process of
finding a good and simple idea is not an easy one, it is important that within the organization to exist
a good innovation culture. There are a lot of studies related to successful innovation culture and its
main advantages therefore the challenge remains how can managers adopt and properly develop an
innovative culture in their organizations.

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