Washington, Nov 19 : For any firms, innovation is an integral part of growth and success, and corporate culture is the most important factor in driving the advancement, according to a new study led by an Indian-origin scientist.
"Corporate culture is, above all, the most important factor in driving innovation," said Rajesh Chandy, a professor of marketing at the University of Minnesota's Carlson School of Management and a charter member of the U.S. Department of Commerce's Advisory Committee on Measuring Innovation in the 21st Century Economy.
"Firm level factors are more important than anything else -- even location -- in predicting radical innovation," said Chandy.
Underscoring this point in the paper "Radical Innovation in Firms Across Nations: The Pre-eminence of Corporate Culture," forthcoming in the next issue of the Journal of Marketing, Chandy and co-authors Gerard Tellis of the University of Southern California, and Jaideep Prabhu of Cambridge University show that among traditional drivers of innovation such as government policy, labor, capital and culture at the country level, the strongest driver of radical innovation across nations is corporate culture.
They also find that the commercialization of radical innovations is a stronger indicator of financial performance than other popular measures such as patents.
"It is important to realize that all innovative companies look alike. They share a common culture no matter where they are located," states Chandy.
"The corporate culture of innovative firms develops to overcome aspects of their home economies that would otherwise hinder them," the researcher added.
Looking at data from 759 firms across 17 countries the researchers found that location is not the determining factor in the degree to which any given firm is innovative; but rather, the innovative firms themselves share key internal cultural traits.
Innovation appears to be a function of the degree to which a company fosters a supportive internal structure headed by product champions and bolstered by incentives and the extent to which that organization is able to change quickly, keeping an eye on the markets of the future.