**2.2. Culture of innovation**

In other words, culture is the basic assumption of what the organization is and how its members should proceed and define themselves in relation to their external environment. In a word, culture is the reality of organization. That is, it shapes everything that goes on internally, it represents unwritten (i.e., informal) norms that bind all elements in almost everything

Schein and Schein [4] suggests that organizational culture is what a group learns over a period of time while solving their survival problems—that is, it is the pattern of pretensions discovered, developed, or established by a certain group while learning to face their problems of external adaptation and internal integration at the level of basic artifacts, values, and assumptions.

"Artifacts" are visible organizational structures and processes, include written and spoken language, physical space, operational plans, and attitudes of individuals, and can be divided into (i) physical artifacts (company logos), (ii) procedures (company rituals), and (iii) organi-

"Values" are the social principles and patterns possessed within culture that are of real importance, rooted in unwritten rules that allow members of the organization to know what is expected of them, and define what interests the stakeholders in a corporate culture. Organizational culture reverberates the values of individuals whose use enables them to

"Basic assumptions" are accepted as true beliefs and habits of perception, thoughts, and feelings that are rarely made explicit. When the solution to a problem works over and over again, it becomes accepted as true, that is, assumptions begin to be learned responses that guide

These three elements are continually interacting, focusing on what artifacts and values reveal about basic assumptions. Thus, we are talking about a dynamic model in which all processes occur through continuous reproduction and production of culture under stable formal condi-

In other words, company culture can be described in two "levels": (i) "higher level," which is outwardly observable and contains phenomena such as artifacts, patterns of behavior, language, formal rules, technical knowledge, use and production of physical products and objects, and (ii) "lower level," which is hidden (deeper), since it is located in the minds of people, integrates the mental structures—such as ideas, beliefs, values, attitudes and assumptions and modes of understanding the environment, and contains internal processes by which the

These two levels of culture are easily distinguishable, but it is almost impossible to separate them. They are two parts of the same entity, being the hidden level of culture usually inferred by observing the behavior of organizational members (especially, top management). To make the two cultural levels consistent, collaborators instinctively modify their behavior and thinking. Hofstedeet al. [5] consider culture as the software of the mind, that is, the operating system that enables individuals to share and understand the experience. "Experience" consists of a set of shared norms and attitudes possessed by the members of an organization. That is,

make decisions and develop solutions to solve problems and functional issues.

behavior and determine how members of the organization feel, think, and act.

they do, and it is reflected in organizational philosophy, rules, climate, and symbols.

zational histories and myths.

74 Globalization

tions or organizational change.

operation is determined.

Culture can contain a perspective of continuous innovation, ranging from "incremental innovation" (doing better) to "radical innovation" (doing differently). This constitutes a basis for the development of "archetypes," which are introduced to facilitate the descriptive representation of the characteristics of incremental and radical innovations. Archetypes are of two types:


Greenwood and Hinings [7] report that organizations tend to operate with structures and systems that "bring" the two types of archetypes. The passage between archetypes (i.e., organizational change) is less common than the stability of the archetype (i.e., organizational inertia), since organizations have specific institutionalized functions.

expectations and needs and, as such, employ systematic processes that bring together market information and help anticipate future consumption trends. In fact, managers use this information to evaluate and improve the production processes presented in the market, for

The Need to Develop a Corporate Culture of Innovation in a Globalization Context

http://dx.doi.org/10.5772/intechopen.81266

77

For Marquis [10], one of the lessons to be drawn from successful innovative firms lies in the fact that the main source of innovation is their human resources. The training and experience of the right people are the main source of innovation information. This implies that in an innovative organization it is expected to have an active involvement of all employees in the effort to continuously improve the quality of services and goods produced. Continuously improving quality will maximize customer satisfaction and minimize total operating costs. In this step, we can say that "total quality management" works internally as a horizontal application through functions and departments with the voluntary commitment of all employees and externally as a downstream of suppliers and "consumers" value chains, respectively. Individuals are encouraged to intervene beyond their "comfort zone," that is, to engage in work groups with learning and development tasks beyond organizational boundaries that increase the personal knowledge that can be used in innovation processes—"do better" as well as "doing differently". The attenuation of the hierarchical structure in the company ensures its adaptability and operational flexibility, since it bases its activities in multidisciplinary teams with knowledge transversal to the various organizational sectors. Rather than responding to the requests of their immediate superior (typical of a vertical relationship), team members focus on satisfying the needs of the following people in the process of operation (typical of a horizontal relationship). The working groups or organizational units are dynamic in composition and activity and enjoy coordinated network autonomy in order to group the actions taken as a whole to achieve the company's objectives. The Director General's support and commitment to innova-

In other words, the role of innovation in the company's long-term objectives must be stated and strengthened at all functional levels. The motivation of the individuals, combined with the knowledge obtained from the learning, helps to instill an innovative spirit of work. Collaboration between people with different skills can lead to the creation of innovative solutions and products. Therefore, the success of the companies stems from the dedication and extraction of talent from individuals and their combination in teamwork. The direct intervention of the leaders ensures the verification of conditions conducive to the flowering of a sense of trust that generates enthusiasm for the common realization throughout the organization. Hauser [11] points out that the 'enabling' culture of internal debate and prevention of emotional conflicts favors the early stages of innovation. This causes employees to express their appreciation and support of each other at work and not waste time, protecting their own ideas or feeling threatened by others. This provides an internal trust environment to which creative thinking is associated, which in turn depends on certain personality traits related to independence, self-discipline, tolerance of ambiguity, perseverance in the face of frustration, and lack of concern for social approval. With the project team having confidence, its elements will be more receptive to accepting an external perspective without causing a confrontation

*not invented here*, that is, they have a distance from the invention of others.

example, by designing products that target customer preferences.

tion projects is a critical factor in his success.

To some extent, this indicates that the transition from innovation culture type I to type II can be streamlined by managers' specific interventions at the level of artifacts and values (which are interrelated). However, change in culture must be undertaken by attempting to change the basic values and assumptions present in the organization. The values lead to the behaviour and this behavior will solve the problem that prompts him. Soon, values will be gradually transformed into basic assumptions about the reality of things. As assumptions are increasingly accepted as true, knowledge will disappear. Thus, a change in organizational culture is created.

As we see, archetypes provide a holistic perspective on the culture of innovation. As a consequence, the change from type I to type II must be conceived as a holistic process, that is, that it serves the various operational areas where the most significant characteristics of the innovation culture predominate.

In general, the chief executive officer (CEO) of an innovative company defines a long-term vision and develops a mission that is consistent, challenging, and realistic with respect to each other. To attract the voluntary commitment of employees for innovation projects it should be used convincing examples and persuasion in the performance of their duties. To this extent, the freedom to test new things is widely recognized as a prerequisite for innovation since it refers to the personal decision about "what to do" or "how to accomplish a task." The most important type of freedom is the autonomy of individuals, that is, freedom in the conduct of one's own tasks in the pursuit of the mission or the attainment of the firm's goals. Therefore, such openness to individual initiative is a key element in supporting successful innovation. The organizational receptivity to the new ideas and the proactivity of the employees generate new applications of knowledge and new ways to do things as a result of the good to take risks.

Nybakk and Jenssen [8] emphasize trust and openness as essential in modeling the climate for innovation where risk is related to the freedom to explore the unknown (e.g., ideas and experiences). However, in an "incremental environment," the degree of freedom can be reduced and replaced by functional systems and procedures. This means that routines and usual business systems can become inhibitors of the development of radical innovation [9].

The need to innovate and discover new commercial applications in the future requires the refining of the creative capacity of individuals in training as an integral part of the company culture. Actually, the risk attitude influences the way team members deal with uncertain situations. For example, risk-averse groups prevent radical innovation. Indeed, experimental attempts at radical innovation produce more failures than successes. Hence, it is not surprising that managers feel more comfortable with access to innovative technologies through acquisition operations or choose to be "fast followers" when new consumer-centric operational concepts emerge.

Employees of an innovative company recognize that each company and each person is part of a long chain of suppliers and consumers. In other words, each company is a customer of its suppliers and a supplier of its customers. Companies must understand consumers' expectations and needs and, as such, employ systematic processes that bring together market information and help anticipate future consumption trends. In fact, managers use this information to evaluate and improve the production processes presented in the market, for example, by designing products that target customer preferences.

organizational change) is less common than the stability of the archetype (i.e., organizational

To some extent, this indicates that the transition from innovation culture type I to type II can be streamlined by managers' specific interventions at the level of artifacts and values (which are interrelated). However, change in culture must be undertaken by attempting to change the basic values and assumptions present in the organization. The values lead to the behaviour and this behavior will solve the problem that prompts him. Soon, values will be gradually transformed into basic assumptions about the reality of things. As assumptions are increasingly accepted as true, knowledge will disappear. Thus, a change in organizational

As we see, archetypes provide a holistic perspective on the culture of innovation. As a consequence, the change from type I to type II must be conceived as a holistic process, that is, that it serves the various operational areas where the most significant characteristics of the

In general, the chief executive officer (CEO) of an innovative company defines a long-term vision and develops a mission that is consistent, challenging, and realistic with respect to each other. To attract the voluntary commitment of employees for innovation projects it should be used convincing examples and persuasion in the performance of their duties. To this extent, the freedom to test new things is widely recognized as a prerequisite for innovation since it refers to the personal decision about "what to do" or "how to accomplish a task." The most important type of freedom is the autonomy of individuals, that is, freedom in the conduct of one's own tasks in the pursuit of the mission or the attainment of the firm's goals. Therefore, such openness to individual initiative is a key element in supporting successful innovation. The organizational receptivity to the new ideas and the proactivity of the employees generate new applications of knowledge and new ways to do things as a result of the good to take risks. Nybakk and Jenssen [8] emphasize trust and openness as essential in modeling the climate for innovation where risk is related to the freedom to explore the unknown (e.g., ideas and experiences). However, in an "incremental environment," the degree of freedom can be reduced and replaced by functional systems and procedures. This means that routines and usual busi-

ness systems can become inhibitors of the development of radical innovation [9].

The need to innovate and discover new commercial applications in the future requires the refining of the creative capacity of individuals in training as an integral part of the company culture. Actually, the risk attitude influences the way team members deal with uncertain situations. For example, risk-averse groups prevent radical innovation. Indeed, experimental attempts at radical innovation produce more failures than successes. Hence, it is not surprising that managers feel more comfortable with access to innovative technologies through acquisition operations or choose to be "fast followers" when new consumer-centric opera-

Employees of an innovative company recognize that each company and each person is part of a long chain of suppliers and consumers. In other words, each company is a customer of its suppliers and a supplier of its customers. Companies must understand consumers'

inertia), since organizations have specific institutionalized functions.

culture is created.

76 Globalization

innovation culture predominate.

tional concepts emerge.

For Marquis [10], one of the lessons to be drawn from successful innovative firms lies in the fact that the main source of innovation is their human resources. The training and experience of the right people are the main source of innovation information. This implies that in an innovative organization it is expected to have an active involvement of all employees in the effort to continuously improve the quality of services and goods produced. Continuously improving quality will maximize customer satisfaction and minimize total operating costs. In this step, we can say that "total quality management" works internally as a horizontal application through functions and departments with the voluntary commitment of all employees and externally as a downstream of suppliers and "consumers" value chains, respectively. Individuals are encouraged to intervene beyond their "comfort zone," that is, to engage in work groups with learning and development tasks beyond organizational boundaries that increase the personal knowledge that can be used in innovation processes—"do better" as well as "doing differently".

The attenuation of the hierarchical structure in the company ensures its adaptability and operational flexibility, since it bases its activities in multidisciplinary teams with knowledge transversal to the various organizational sectors. Rather than responding to the requests of their immediate superior (typical of a vertical relationship), team members focus on satisfying the needs of the following people in the process of operation (typical of a horizontal relationship). The working groups or organizational units are dynamic in composition and activity and enjoy coordinated network autonomy in order to group the actions taken as a whole to achieve the company's objectives. The Director General's support and commitment to innovation projects is a critical factor in his success.

In other words, the role of innovation in the company's long-term objectives must be stated and strengthened at all functional levels. The motivation of the individuals, combined with the knowledge obtained from the learning, helps to instill an innovative spirit of work. Collaboration between people with different skills can lead to the creation of innovative solutions and products. Therefore, the success of the companies stems from the dedication and extraction of talent from individuals and their combination in teamwork. The direct intervention of the leaders ensures the verification of conditions conducive to the flowering of a sense of trust that generates enthusiasm for the common realization throughout the organization.

Hauser [11] points out that the 'enabling' culture of internal debate and prevention of emotional conflicts favors the early stages of innovation. This causes employees to express their appreciation and support of each other at work and not waste time, protecting their own ideas or feeling threatened by others. This provides an internal trust environment to which creative thinking is associated, which in turn depends on certain personality traits related to independence, self-discipline, tolerance of ambiguity, perseverance in the face of frustration, and lack of concern for social approval. With the project team having confidence, its elements will be more receptive to accepting an external perspective without causing a confrontation *not invented here*, that is, they have a distance from the invention of others.

Successful innovation requires the ability to gather ideas and competencies from a large number of sources. If the company is closed within its own internal reality, it will be unable to discover and exploit opportunities outside its existing business or beyond its current operational or technical capabilities. On this basis, the exposure of teams or firms to external technological knowledge is a valuable component in the innovation process [12]. On the other hand, innovative organizations adopt a style of participatory management with "empowerment." Empowerment means empowering employees. This represents a high commitment in decision-making and increased accountability in organizational results. Empowerment aims, on the one hand, to extract the creative energy of all the individuals in the company and, on the other hand, to assign them management responsibilities accompanied by resources in order to assert their leadership within the spheres of competence envisaged. In a word, the ultimate goal of empowerment is self-management, that is, workers are expected to have a responsible initiative based on monitoring their own work and accessing the support of specialized knowledge managers as mentors.

**3. Culture to support corporate entrepreneurship**

components of the culture of support to corporate entrepreneurship.

The "national culture" is composed of five dimensions:

**iv.** *Masculinity* versus f*emininity:* gender roles distinction.

the future.

employees think, talk, and work.

By "culture of support for corporate entrepreneurship" we mean a set of operational standards, shared by individuals, which can be shaped, altered, or preserved through individual interaction under the accumulated influence of three types of culture. *Professional culture* and *national culture* represent more values (invisible, implicit) relative to the individual, while the *culture of the company* concerns rules and practices (visible, explicit) more related to its functioning.

The Need to Develop a Corporate Culture of Innovation in a Globalization Context

http://dx.doi.org/10.5772/intechopen.81266

79

Thus, it seems to be a logical step to conceptualize the culture of support for corporate entrepreneurship as a series of procedures based on professional, national, and company cultures that indicate a pattern of action. The culture of support for corporate entrepreneurship refers to a set of norms, values, attitudes, and perceptions shared by a group of individuals (e.g., the R&D department and new entrepreneurship teams). Next, we will analyze each of the

**i.** *Distance from the power, low* versus *high*: how individuals perceive the power in society. **ii.** *Uncertainty, low* versus *high*: what people do to counter the ambiguity and doubt about

**iii.** *Individualism* versus *collectivism:* preference for individual action rather than group action.

The culture of the profession originates in the characteristics of the people who practice it and in the skills used in its practice. Professional cultures are specially formed by "work styles" performed by individuals in the execution of their routines. Sirmon and Lane [17] consider that there is a professional culture when a group of people, in a similar profession, functionally shares a series of norms, values, and beliefs. In these terms, we can say that "professional culture" develops through the socialization to which individuals are subjected during their education, training and professional exercise. It should be noted that professional culture does not only interact with the national culture, but also with the culture of the company in a certain work context, influencing the personal experiences and interpretations of organizational practices.

Company culture (i.e., organizational culture) is anything holistic, historically determined, socially constructed, and difficult to change, that is, it is something the organization has, but it can also be understood as what the organization is. Basically, we can define "company culture" as the personality evidenced by the company as a result of operating rules and assumptions, values, and behaviors of its employees. In short, company culture translates the way its

Underlying the culture of innovation, it is important to add that individuals develop their innovation activities in an institutional context conditioned by organizational, professional, and national cultures. Still, Shane [18] emphasizes national culture as a decisive element in

**v.** *Orientation, long-term* versus *short-term:* orientation of time in life and work [16].

Ultimately, highly qualified human resources are the main source of competitive advantage for organizations through the implementation of action plans where they can play multiple roles and introduce continuous improvements in product quality and service to the consumer. Innovators tend to be dissatisfied and sometimes ignore or violate organizational rules when this is indispensable.

As we have seen, centralization and formalization must be reduced to provide continuous learning and organizational change. In other words, everything, at all organizational levels, at all times, must be improved. As information sharing throughout the organization is critical, timely, consistent, and accurate movement expedites the organizational response to rapidly changing according to the consumer desires. In this way, anyone who contributes with an idea to a new product or service can count with an internal feedback in a way that it is appropriated and incorporated into the production process. All ideas must receive clear attention to awaken creative discussion. This is initiated at the lower hierarchical level and terminated by efficient decision-making by managers, being important in this process the possession of useful information available in the operational circuit. Such a process places more emphasis on relationships in horizontal rather than vertical functional systems.

In short, we can say that the "culture of innovation" consists of a set of operational factors (e.g., organizational leadership, structure, and climate) that influence the organization's continuous learning and entrepreneurial process. In this perspective, we can understand entrepreneurship as a subsequent phenomenon of innovation. For example, the creation of a new product and its commercialization in the market is an entrepreneurial practice triggered by an innovation process.

In this alignment, the following question arises: who needs a culture of innovation?

Drucker [13] noted that entrepreneurship operates through the 'instrument' of innovation. But to encourage corporate entrepreneurship, it is necessary to identify the conditions required for it to occur in organizations. More specifically, several authors point out that the innovative and entrepreneurial behaviors of individuals and firms depend on cultural factors [14, 15].
