6. Discussion and conclusion
6.2 Implications
The first model results confirm and enrich, with new and more recent data, findings in existing literature. In line with studies from Datta, Guthrie & Wright (2005); Hayton (2003);
Rangus & Slavec (2017) and Andries & Czarnitzki (2014), it is found that employee involvement and innovation are positively related. This suggests that involvement is still a key factor in improving company’s innovativeness.
The second model is in line with the expectations and in conformity with the study from Zhong (2018), who finds that information provision in the form of transparency, increases a company’s innovative efficiency and effort. The coefficient on suggestion
schemes is low compared to the coefficients of the other two involvement practices. Although nothing should be concluded from the value of the coefficient as causality is not proven, this is noticeable. This might be explained by the fact that whether employees contribute to handing in ideas through suggestion schemes depends on the culture of the organization as well as the employees’ individual characteristics (Jabeen, Mehmood & Mehrajunnisa, 2020).
Merely introducing such a suggestion scheme does not automatically lead to more
involvement, and therefore might stimulate innovation to a lesser extent. Another interesting observation of the second model is the applicability of the results in the current timeframe, due to the corona crisis and an ever-increasing availability of information. The corona crisis has forced an increasing number of employees to work remotely, lowering the barrier for a virtual relationship between employee and employer. The combination of increased
experience with virtual relationships for much more employees and the current online systems that facilitate suggestion schemes, as also discussed in section 2.1.1, might make suggestion schemes a more important factor of influence. Moreover, employee involvement in the form of regular meetings between employees and their managers, is also encouraged by the current corona circumstances. Due to the online nature of the meetings and the familiarization of
virtual relationships, no physical and logistical planning is needed, making meetings easier to take place. The ever-increasing availability of information introduces new phenomena like disinformation, fake news and alternative facts, referred to as ‘misinformation’. This might lead to employees, knowingly or unknowingly, bringing misinformation as ideas and suggestions to the organization. This might call for a scrutiny check; a fact checking entity within an organization that regulates the information and its use.
The third model shows that there is no evidence found for workplace autonomy to influence the relationship between involving employees and company innovation. This finding is in line with the results of a recent study of Echebiri (2020), who finds that the moderating role of perceived job autonomy on the relationship between self-leadership and employee driven innovation does not exist. Although this study is not fully comparable, the results might be interpreted the same way because the studied concepts are close and partly overlapping. Therefore, one might conclude that workplace autonomy is not the most relevant factor when studying the relationship between involvement and innovation.
The fourth model extends model 1, by distinguishing between the four innovation categories in the analysis. This does not result in substantial additional findings, other than that the expected positive relationship between employee involvement and company innovation is confirmed. However, some other observations in this model are noteworthy.
Four different innovation categories are analyzed in table V. The coefficient of two of those categories, process and organizational innovation (column 3 and 4), decreases when fixed effects are added (column 7 and 8). It means that part of the effect as measured in columns 3 and 4 is explained by country and industry differences. This suggests that the effect of employee involvement on process/organizational innovation is dependent on country and/or industry differences. However, the coefficient values of the effect of employee involvement on product/service and marketing innovation (column 1 and 2) increase once fixed effects are
added (columns 5 and 6). This might be explained by country/industry differences initially having a decreasing impact on the coefficients of product/service and marketing innovation in column 1 and 2. When fixed effects are added, this decreasing impact is eliminated as the fixed effects phase out these differences and therefore the coefficient of product/service and marketing innovation increases. I believe these effects are related to the type of innovation being examined. Process and organizational innovation are more technological and skill-based and rely on country differences like culture, attitude, ambition, and education.
Marketing and product/service innovation are more customer-based and are therefore more global uniform due to a global marketplace.
The fifth model gives the same results as founded in model 3 despite studying the three distinct involvement practices. Intuitively, this was not according to my expectations.
Autonomy within a job, as well as feeling more involved in organizational decision-making practices, often tends to stimulate employees’ feelings of engagement and commitment towards the company. Subsequently, commitment increases the effort put into extra-role activities, which in turn enhances innovative output. Furthermore, because workplace autonomy becomes insignificant once industry and country fixed effects are added to the model, the effect is mainly explained by country and industry differences. The cultural differences between the countries and industries on how autonomy in the workplace is perceived and executed might explain this observation. Despite the moderator being insignificant, this does not mean that workplace conditions do not affect the relationship between involvement practices and company innovation. Even more so, other workplace conditions should be studied as well, as some probably do influence this relationship, and are therefore crucial in providing insights into the best implementation methods of involvement practices.
6.3 Limitations
This research has seven main limitations. First, the European Company survey 2013 was conducted when Europe was in the process of recovery from the financial crisis. This might have influenced establishments in the way they have filled in the survey, or the way their company was performing at the time. All results should therefore be interpreted while having this in mind (Eurofound, 2015). Second, employees’ age should also be controlled for, as it influences innovation outcomes (Frosch, 2011; Sauermann & Cohen, 2010), however this variable was not included in the dataset and is therefore not taken into account. Third, this study contains subjectivity. Data derived from surveys is always subjective as it contains self -reported measures (Kahnweiler & Thompson, 2000). Respondents might not answer
truthfully, or they don’t spend enough time to think about the questions and come up with a considerate answer. Moreover, as all variables are answered by managers, one could argue how accurate measures are. For example, employee involvement is indicated by the manager.
It could be the case that he/she believes employees are involved to a great extent, whereas employees themselves believe this to a lesser extent. Fourth, the interviews are conducted by phone which means that visual expressions or signals are not taken into account (Garbett &
McCormack, 2001). This could have caused misunderstandings between the interviewer and interviewee or result in or misinterpretations of certain questions. Fifth, because a cross-sectional dataset is used for this research, causality cannot be proven (Tesluk, Vance, Mathieu, 1999). It could be the case that when employee involvement and innovation are measured over the years, results are different. As innovation is difficult to measure in a single moment and is more likely to be a process that takes time, this might be the case in this study.
Both company innovation, as well as the employee involvement practices, are indicated as dummy variables, therefore nothing can be concluded regarding the extent or intensity of these concepts (Grande, Macías, & Pérez, 2020), which limits the practical implications that
can be derived from this research. Sixth, Bertrand & Mullainathan (2001) find that the answer given to certain questions highly depends on the word choice of the interviewer or the order in which the questions are asked. Finally, in the fourth model, it should be taken into account that the definition of ‘organizational innovation’ is rather vague. When filling in the survey, managers might have classified innovation within their establishment as ‘organizational innovation’, while others would put the same innovation form under product/service
innovation, or nowhere at all. Because these perceptions regarding the understanding of the various innovation categories might differ, results could be biased. It should be taken into consideration that all the above-mentioned limitations could cause biases.
6.4 Future research opportunities
Future research in this area is strongly recommended as the line between employees and their supervisors might fade in the future of work. Possibilities for future studies include examining other workplace characteristics as a potential moderator on the relationship between
involvement and company innovation. Furthermore, it would be interesting to take a better look at comparing various involvement practices. Understanding which practice is most beneficial for particular types of organization, and to what extent they should be incorporated, would increase both the organization’s efficiency as well as its performance. Finally, a
country comparison could be conducted, to deepen knowledge on differences in the effectiveness of involvement practices between countries, and whether they are driven by culture or other aspects.
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Appendix
Section 1 – Methodology
Ta ble VII: Multicollinea rity test Model 1
Ta ble VIII: Multicollinea rity test Model 2
Ta ble IX: Multicollinea rity test Model 3
Ta ble X: ICC test for multi-level modeling
Section 2 – Regression and results Part 1
Model 1 (H1):
companyinnovation = α + β1(employeeinvolvement) + β2(parttime) + β3(education) + β4(gender) + β5(companysize) + γc + γi + ε
Model 2 (H2-H4):
companyinnovation = α + β1(EI_meetings) + β2(EI_information) + β3(EI_suggestion) + β4(parttime) + β5(education) + β6(gender) + β7(companysize) + γc + γi + ε