Encouraging innovative work behavior in the workplace : how does the Philips Masterclass Program influence the innovative work behavior of its participants?

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Master Thesis

Encouraging Innovative Work Behavior in

the Workplace

How does the Philips Masterclass Program influence

the Innovative Work Behavior of its participants?

MSc Business Administration Entrepreneurship and Innovation

Faculty of Economics and Business University of Amsterdam

Thesis supervisor: Dr. W. van der Aa

Philips University

Personal Health Academy

Amstelplein 2, 1096 BC Amsterdam Thesis supervisor: Geesje Falke

Thesis author: Nergis Engin, 10827854 E-mail contact: nergis.engin@gmx.de Submission date: 30th August, 2015

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1 ACKNOWLEDGEMENTS

At this instance, I want to express my appreciation and gratitude to all the people and parties who were involved and contributed to the completion of the present thesis.

First, I want to thank my university supervisor Dr. Wietze van der Aa for his advice, knowledgeable input and patient guidance throughout the whole thesis process. Thank you for both supporting and challenging me, leading to the overcoming of the barriers I have partly encountered and partly built up for myself from time to time. I am convinced that I will carry the personal and professional lessons I was lucky to learn throughout the past year within the frame of my Master studies with me in any future life steps.

With respect to the company Philips, I would like to thank Geesje Falke for her supervision of this master thesis during my internship at Philips University. Thank you for continuously reminding me to not only reflect and talk about an innovative behavior, but to adapt an innovative experimental design in my actions to achieve optimized results in a fast-paced manner. I can state with certainty that without your insights, efforts to involve me in numerous business areas and your trust in my capabilities, the chosen research would have not been as diverse as at present.

With this link, I would like to express my deepest gratitude to all respondents and interview partners who shared their ideas, insights and opinions, helping to make this thesis as significant as it became. A big thank you for your time, interest and the great discussions I was able to be part of.

Furthermore, I would like to mention my friends and fellow students who made even the stressful times of such an academic undertaking enjoyable through their compassion, humor and cheerfulness. A special thanks is hereby attributed to Anastasia Schmalz, my dearest friend, whose experience, advice and support I could count on at anytime during past months.

Last but not least, I want to thank my family for their never-ending support, moral assistance and compassion that has accompanied me in every stage of my life so far and was also of crucial meaning to me during this final academic chapter. I have the firm belief that it was your love and support that, no matter from what distance, helped me to achieve any personal or professional goals I have set for myself and to continue pursuing those.

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Statement of originality

This document is written by Student Nergis Engin who declares to take full

responsibility for the contents of this document.

I declare that the text and the work presented in this document is original

and that no sources other than those mentioned in the text and its

references have been used in creating it.

The Faculty of Economics and Business is responsible solely for the

supervision of completion of the work, not for the contents.

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E

XECUTIVE

S

UMMARY

Having the delivery of meaningful innovations in products and services at the heart of its business, Philips is an organization that has understood the crucial role of innovative efforts in an ever evolving competitive market. The Digital Transformation program is therefore directed towards the goal of both transforming processes into ones that are more efficient and innovative or influencing the behavior and raising the awareness of Philips employees. With a human-centric approach at its focus, the Philips University has initiated the Philips Innovation Masterclass program within the frame of the corporate innovation strategy to nurture innovation at its core – in the individuals of the organization.

The innovative work behavior, also often referred to as individual innovation, of employees represents a valuable construct whose understanding is crucial for an efficient innovation development of an organization (Messmann & Mulder, 2012). Although academics nowadays recognized the unreplaceable asset of individual’s creativity and innovation capability for an organization, research on how corporate innovation and entrepreneurship programs can be used to influence employee’s innovative work behavior has been scarce.

The present thesis addresses this gap in literature and puts the examination of the innovative work behavior of Philips’ employees into its focus. By analyzing the influence of Philips’ Innovation Masterclass program on the participants, this study combines present theories on measurement models and influential factors of innovative work behavior, and applies them to an actual case of a corporate program. Hence, by contributing to the understanding of the origination, cause and suggestibility of the innovative work behavior construct, this study provides an evaluation of a corporate innovation program component and most importantly renders managerial implications on how to design, alter or improve such a program to achieve the most positive influence on individual’s innovation as possible.

Relying on the conceptualization of innovative work behavior (IWB) as a multi-dimensional construct, consisting of opportunity exploration, idea generation, idea championing, idea implementation and reflection on ideas (Messmann & Mulder, 2012; Yuan & Woodman, 2010), the present thesis takes a two-perspective approach to conduct research on innovative work behavior. On the one hand, the direct influence on the IWB dimensions was quantitatively as well as qualitatively measured through the help of established measurement models, and on the other hand, employee perceptions on IWB determinants (on individual, team, relationship, organizational and job role level) within the design of the Philips Masterclass workshop were

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assessed and evaluated. Numerous interviews with initiators and design contributors of the Philips Masterclass, as well as participants and an online survey were used for the provision of reliable and necessary data for this study.

Overall, it has been found that the participation in the Innovation Masterclass program has contributed considerably to employees’ mindset change and the awareness for opportunities within and outside their organization. With the perceived focus of the program’s design targets found on individual level factors, such as the stimulation of knowledge and the development of an intrapreneurship personality, the Innovation Masterclass was revealed to have influenced the opportunity exploration and idea championing dimensions of the participants’ innovative work behavior the most. Not only did employees and executives who have absolved the Masterclass workshop opened up to opportunities to adapt new work methods, techniques and approaches for innovation development in their own work environment but they also felt empowered to act as ‘innovation ambassadors’ in their own functional teams.

Moreover, results of this study illuminated some interesting insights and shortcomings of the Innovation Masterclass program whose re-evaluation could add considerably to the efficiency and success of the initiative. Firstly, the idea implementation and reflection stage has been revealed as the least addressed stages as a result of the workshop participation, suggesting an increased organizational effort for the enablement of innovative work behavior of employees through structures, managerial support and a clear and concise innovation vision statement. Furthermore, the initiation of a compensated on-sight follow-up program to the Innovation Masterclass workshop has been suggested to overcome the challenge of knowledge alignment between participants and non-participants in functional teams and to create opportunities to reflect on Masterclass learnings and their application to daily projects. Lastly , the emphasis on organizational and job role level factors during the one-week Masterclass workshop was suggested to encourage a behavioral change in the back-end dimensions of innovative work behavior, namely the idea implementation and reflection dimensions.

Overall, the present thesis contributes to the evaluation of a corporate innovation program component under the aspect of the innovative work behavior construct and combines existing theories while applying them to a real-life case. Through insights gained, numerous managerial implications for Philips could be derived in order to optimize the design of the corporate innovation program and the encouragement of the innovative work behavior of participating employees to reach a long-term unceasing innovation development in the organization.

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Exhibit 1: Innovative Work Behavior (IWB) dimension………..………...………p.20 Exhibit 2: Conceptual model of present research………p.34 Exhibit 3: Building blocks of the Philips Digital Transformation Program………..…..p.36 Exhibit 4: Integrated learning process of the Philips Innovation Masterclass………..…...p.38 Exhibit 5: Week Timetable of the Philips Innovation Masterclass……….…p.39 Exhibit 6: Mean values of Individual level factors……….…….………p.61 Exhibit 7: Mean values of Team level factors………...………p.62 Exhibit 8: Mean values of External contacts factor……….……....p.63 Exhibit 9: Mean values of Organization level factors……….…....p.64 Exhibit 10: Mean values of Job Role level factors………...………….p.64 Exhibit 11: Summarized findings in each IWB phase………..………...p.72 Exhibit 12: Updated Conceptual Model – Integration of Results I, II & III…………..………..p.76

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8 I. INTRODUCTION

Whereas organizational change was still considered as an inevitable measure that needs to be taken by companies in context of failure or disruptive events in the past (Weick & Quinn, 1999), in the 21st century, this view has undergone a major reconsideration. In today’s dynamic business environment, change and the capability to adapt quickly to market demands is seen as a prerequisite for organizations to be successful (Kuratko, 2009). Competition is regarded as a “war of movement”, describing its vibrant characteristic that resembles more to the process of an interactive video game than to chess (Stalk et al., 1992). Shorter life cycles of products, services and business processes caused by a high rate of technological, social and institutional changes demand that businesses continuously improve and renew their offerings in order to secure long-term survival, growth and profitability (De Jong, 2006). In this context, innovation and entrepreneurship serve as catalysts for the new wave of economic development (Kuratko, 2009) and offer the right tools to meet the growing demand for sustainable competitive advantage in a fast-paced environment (Messmann & Mulder, 2012).

Capitalizing on the employees’ ability to innovate and, furthermore, unleashing their innovative potential is hereby increasingly recognized as a crucial factor in facing the challenges of the recent economic era and gaining competitive advantage (Dorenbosch et al., 2005; Kanter, 1983; West & Farr, 1990). In the more knowledge-based work culture of today (De Jong & Den Hartog, 2007), individual innovation of employees can represent the much needed hard-to imitate organizational capability that distinguishes a company from other market players (Stalk et al., 1992). Employee innovative behavior can be seen as an important asset for the effectiveness of an organization (Yuan & Woodman, 2010) and a crucial means to foster organizational success (Van de Ven, 1986; Bunce & West, 1995).

Nowadays it is essential that companies realize the potential of this source of creativity and innovation, as incremental innovations based on employees’ efforts have become much more common (De Jong, 2006). In this line, Getz and Robinson’s (2003) present interesting insights in their study that support this assumption by stating as one of the results of their research that 80% of improvement ideas come from their employees and only 20% come through planned innovation activities.

In approval with their studies, there are numerous prominent examples of how the innovative efforts of single employees have tremendously contributed to the organizational success in the past. In the case of IBM, for instance, it has been due to one programmer’s persistency on the benefits of the internet for the company in 1994, that an executive of the strategy taskforce

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initiated an informal alliance of internet-savvy users within IBM. This step enabled the sharing of expertise within the organization and thus, later on, constituted the foundation of IBM’s leading role in the internet industry (Hamel, 2000). Another example of innovative behavior of individual employees can be found in the history of the Post-It Note of 3M which only found its way to the customer and experienced the success it now owns thanks to an employee who creatively converted the functionality of an initially failed product, an unusual adhesive that was not very sticky, into a easily removable bookmark (Fry, 1087).

These example show that innovative work behavior of employees can refer to their voluntary willingness to introduce or apply new ideas, products, processes and procedures to their own work environment (Yuan & Woodman, 2010), in other words to constitute on-the-job innovations that go beyond their work role requirements (Dorenbosch et al., 2005).

With the growing necessity of sustainable competitive advantage for organizations, the importance of innovative work behavior (IWB) of employees, often interchangeably referred to as individual innovation (De Jong & Den Hartog, 2007; De Jong, 2006; Janssen et al., 2004; Pratoom & Savatsomboon, 2012), has been recognized by academics in many popular management principles, such as quality management (Ehigie & Akpan, 2004), continuous improvement schemes (Fuller, Marler, and Hester 2006), kaizen (Imai 1986), and corporate entrepreneurship (Sharma & Chrisman 1999). Furthermore, many academics have understood how critical it is to understand the link between how innovations are developed and how employees’ work behavior is related to this process (Messmann & Mulder, 2012). The assumption that employees’ innovative work behavior is positively linked to organizational performance (De Jong, 2006; De Jong & Den Hartog, 2010; Scott & Bruce, 1994), made researchers devote increasing attentions to antecedents that potentially promote individual innovation within a company. Therefore, a vast variety of determinants of innovative work behavior have been identified and examined in the past years (e.g. Scott & Bruce, 1994; Yuan & Woodman, 2010, De Jong & Den Hartog, 2007; Ramamoorthy et al., 2005).

However, not only academics but also numerous organizations have embraced the support of innovative work behavior within their own rows. Companies like Google and Shell for instance have designed corporate entrepreneurship programs in order to foster entrepreneurial behaviors of employees and thus, actively spur the innovation in their companies (Hamel, 1999; Stopford & Baden-Fuller, 1994).

At Philips, innovation is seen as the heart of all business areas (Company website, 2015). With the Digital Innovation program, Philips follows the path of driving innovation and keeping up

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the pursuit of sustainable competitive advantage. Within this program, the Digital Innovation Masterclass program has been particularly set up to educate key players within Philips around digital innovation, promote employees’ proactiveness in the work environment and enforce digital leadership (Digital Innovation Masterclass Briefing, 2014). Particularly in times, where it is the start-ups who create a major part of the new wealth in industries (Hamel, 1998), with this program, Philips recognized the need for continuous change and rapid adaptation and made an important step towards the acknowledgement of the important role its employees play in it. I.1 Academic Relevance

Though academics in the past decades dedicated a considerable amount of attention to the construct of innovative work behavior (Scott & Bruce, 1994), to possible measurement models (De Jong & Den Hartog; Messmann & Mulder, 2012) and to factors influencing the innovative work behavior of employees (Yuan & Woodman, 2010; De Jong & Den Hartog, 2007), there has been no publication, to the researcher’s attention, that applied these theories to a concrete example of a corporate program. In other words, the influence of an organizational innovation training, designed to promote the entrepreneurial way of thinking of employees, has not been examined under the aspect of innovative work behavior measurement scales. Furthermore, there has been neither any analysis of corporate programs under the aspect of possible factors that have been empirically proven to have an influential effect on IWB. Thus, the amount of practical implications and suggestions on how to design corporate innovation and entrepreneurship learning programs in order to have a maximal effect on the Innovative Work Behavior of participants has been scant. Organizational efforts to promote innovative work behavior of employees have been missing evidence and empirically tested foundation, proving their effectiveness and positive relationship to IWB.

This thesis is going to address this gap and examine the effect of the corporate innovation program of Philips, the Innovation Masterclass, on the innovative work behavior of the participants. Through the merge of relevant theories in the existing field of innovative work behavior, individual innovation determinants and corporate innovation and entrepreneurship, this research aims at generating a reliable evaluation on the effectiveness of the Philips Masterclass workshop as a case study for a corporate innovation program.

I.2 Thesis Structure

The thesis is structured in eleven chapters. After an introduction to the study on hand, chapter two will delineate the purpose of the research and present the research question this thesis is

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aiming to answer. Consequently, relevant literature on the area of innovative work behavior will be presented and on its definition, dimensions and antecedents elaborated. Academic concepts on corporate entrepreneurship and innovation will conclude this chapter, before the conceptual model for this research is going to be illustrated afterwards. Chapter five will introduce the Digital Innovation Program of Philips which represents the unit of analysis in the present study. The Research Methodology chapter will describe the methods used for data collection and analysis. Moreover, procedures and interview respondents are going to be presented within the frame of this section.

As a next step, research findings are going to be introduced in the Results chapter of this thesis. This section will be divided into three sub-chapters which will respectively present the results from two interview rounds and a survey conducted.

The Discussion section will integrate the previously mentioned findings and critically evaluate them referring to the conceptual framework of this study and the core literature. Furthermore, this chapter will provide theoretical and managerial implications of this study.

Finally, main research findings will be summarized in the Conclusion of this thesis, where also the contribution of the present thesis will be once again underlined. This section will be further used to state a comprehensive answer to the research question on hand. Moreover, limitations of the study and recommendation for future research on innovative work behavior in the work environment of an organization will be developed.

II. PURPOSE OF THE RESEARCH

II.1 Aim of Thesis

This study will take the Digital Innovation Masterclass program at Philips as the unit of analysis and examine its effects on the Innovative Work Behavior of its participants who are mainly recruited from the various functional division, middle and senior management across the Philips organization. Drawing on existing literature, this thesis will first concentrate on identifying antecedents of innovative work behavior that have been addressed by the Philips Masterclass. Then, the link to the work behavior of employees will be further explored, after they have undergone the program. Hereby, existing models of measurement will be used to examine the effects on innovative work behavior, whereas observations will be supported through primary and secondary data collection.

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The thesis aims at contributing to existing research by linking the theories of innovative work behavior and its determinants with the design of corporate entrepreneurship and innovation programs. By examining the design of the Masterclass program with regard to an existing range of pre-defined antecedents of innovative work behavior and explore the relationship between its completion and the resulting effect on the individual innovation of participants, practical implications can be made on how to adapt programs like these in order to achieve enhanced innovation results.

II.2 Research Question

This thesis seeks to answer following research question:

How does the Philips Masterclass program influence the Innovative Work Behavior of participants?

For this purpose, several sub-questions will be addressed in the course of the study and answers will be provided in order to reach to the ultimate research goal:

 Which factors determine innovative work behavior in an organizational setting?

 Which of the determinants of innovative work behavior have been addressed through the design of the Philips Innovation Masterclass?

III. LITERATURE REVIEW

The following chapter aims at outlining existing literature on the field of innovative work behavior and furthermore, develop a general understanding of relevant topics for the study on-hand. Precisely, this chapter will present academic findings on the concept of innovative work behavior, while delineating its dimensions and measurement scales. Furthermore, factors that have been identified to have an influential effect on innovative work behavior by previous academics, are going to be presented. Finally, literature on corporate entrepreneurship and innovation programs is going to be reviewed and depicted by the end of this chapter.

III.1 Innovation as a Fuel for Success

In the past decade, the term innovation has not only become an overused buzzword of senior management but has been also recognized to be an essential fuel for the success engine of an organization (Wired.com, 2015). With fast-paced economies, growing markets and increasingly tough competitive conditions characterizing the recent economic era, it is innovation which is

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seen as a necessity that enables organizations to increase their responsiveness to radical changes in market demands and to determine the effective deployment of new technologies and way of working (Dorenbosch et al., 2005). Its importance for organizational effectiveness has been picked up by academics throughout disciplines (e.g. Janssen et al., 2004; Van de Ven, 1986; Scott & Bruce, 1994) who mostly adapted an efficiency-oriented perspective on innovation that promoted an overall proinnovation bias in existing literature. This view which is widely represented in innovation research, embraces the assumption that companies make the rational step towards the adaptation of innovation to maximize their gains in efficiency and effectiveness, e.g. regarding their overall performance (Yuan & Woodman, 2010). On a social-political level, comparatively, innovations or innovation supporting activities are considered to have an effect on the social image of an individual, and thus, have an influence on individual’s innovation decisions beyond the efficiency calculation (Yuan & Woodman, 2010).

Taking these anticipated positive performance outcomes and social image effects into account, organizations as well as researchers have attributed considerable interest to identify possible antecedents and contributors to the development of innovations. Hereby, the attention increasingly shifted to the innovative potential of employees, driven by the basic principle that innovation has its foundation in ideas (Scott & Bruce, 1994; de Jong, 2006) and that it is the people who ‘develop, carry, react to, and modify ideas’ (Van de Ven, 1986, p.592). Employee Innovative Work Behavior (IWB) has been conceptualized as an important asset for the success of an organization’s innovative efforts (Yuan & Woodman, 2010) and the understanding of what drives people to be creative and engages them to improve the status quo in their work environment has become a growing field of research (Dorenbosch et al., 2005).

III.2 Innovative Work Behavior

Initially coined in psychological literature (Amabile, 1988; Kanter, 1988), the term of individual innovation, or as it is interchangeably referred to as innovative work behavior by academics, was first mainly conjunct with creativity of employees, their initiation of new ideas or on their ability for suggestion making. However, the back-end implementation aspect of individual innovation has been overlooked by academics for many years.

This research gap has been picked up by researchers in recent years who recognized the essentiality and contribution of idea implementation actions to the concept of innovative work behavior (e.g. Yuan & Woodman, 2010; Messmann & Mulder, 2012; Scott & Bruce, 1994).

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This thesis adapts the definition of Yuan and Woodman (2010) who, drawing on the previous work of West and Farr (1989), depict innovative behavior as “an employee’s intentional introduction or application of new ideas, products, processes and procedures to his or her work role, work unit, or organization” (p. 324). This definition encompasses the now predominant view in literature that individual innovation both comprises the creative stage of problem recognition and idea generation and the implementation stage of idea championing and idea implementation (Scott & Bruce, 1994; Kanter, 1988, Dorenbosch et al., 2005; Messmann & Mulder, 2012).

Nevertheless, creativity reoccurs as a related construct in literature, however represents only one stage of the multistep process of innovative behavior (Scott & Bruce, 1994). Whereas the concept of creativity distinctively focuses on behavior that relates to the generation of ideas that are both novel and useful (Amabile, 1988), innovative work behavior goes beyond the idea of creativity (De Jong & Den Hartog, 2010). It includes the implementation of ideas and is, in comparison to creativity, more output-oriented, i.e. it is a clearer defined construct that is expected to culminate in innovative output that us somewhat of a benefit for the organization itself (Yuan & Woodman, 2010). Furthermore, innovative work behavior not only encompasses the generation of novel ideas by an individual but also comprises the adaptation of already existing ideas, products or processes from outside the organization to one’s own organization or work unit (Woodman & Griffin, 1993). Therefore, creativity can be regarded as a crucial component of innovative work behavior that is predominantly evident in the beginning of the process, such as in the phase of opportunity exploration or recognition of existing problems (West, 2002).

In an organizational setting, innovative work behavior of employees is usually not prescribed by the job requirement of their position; it involves the extra-role behavior that inclines employees to do “more than it is required” (Dorenbosch et al., 2005, p. 129). This voluntary aspect of innovative work behavior has been already picked up by Katz (1964, p.132) who emphasized the essentiality of such behavior for the survival of an organization by predicting that “an organization which depends solely upon its blueprints of prescribed behavior is a very fragile social system”.

Innovative behavior can range from the development of radically novel ideas to much more incremental changes that the individual undertakes in order to improve his or her work environment (Axtell et al., 2000). In their work, Dorenbosch et al. (2005), for instance, focus explicitly on the employees’ innovative performance that is directed towards “smaller scale,

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on-the-job innovation” (p. 130) that adds to the employees’ daily work practice and environment. Examples of innovative work behavior are practices like looking out for new technologies and trying to improve conventional work processes, thinking in alternative patterns and suggesting new ways to achieve goals, applying new work approaches, promoting new ideas and work techniques throughout the organization or investigating and securing resources for the realization of new ideas (Yuan & Woodman, 2010). Generally it can be stated that innovative work behavior is understood as a set of tasks, activities and behaviors which represent a requirement for innovation development within an organization (Kanter, 1988; Scott & Bruce, 1994; De Jong & Dan Hartog, 2010).

For an organization like Philips where innovation stands in the focus of all activities, being innovative can be regarded as part of the brand promise. Following the previously mentioned socio-political view of innovation hereby suggests that innovation not only plays a major role for the efficiency of the company but also displays a crucial significance for the brand image (Yuan & Woodman, 2010). This can be certainly confirmed when looking back on the long company history characterized by innovations and advanced technologies, as well as Philips’ mission statement (Philips Company Profile – Vision and Strategy, 2014a). Hence, it is an ongoing challenge for Philips to keep its innovative status and hence, ensure an ongoing innovative development. The innovative work behavior of employees can therefore represent an inexhaustible source for creativity and innovation development for an organization, making the understanding of its nature and cause highly relevant for Philips. To keep that innovation promise, the organization depends on employees who display an extra-role behavior, show the willingness to actively adapt innovative work approaches and the ability to act proactively (Dorenbosch et al, 2005).

III.2.1 Dimensions of Innovative Work Behavior

Studies on innovative work behavior distinguish between various dimensions that can be seen as related to the stages of the innovation process (e.g. De Jong & Den Hartog, 2010; Dorenbosch et al., 2005; Messmann & Mulder, 2012; Scott & Bruce, 1994; Kanter, 1988). Scott and Bruce (1994) for instance, operationalize individual innovation as a multistep process following the research of Kanter (1988). In his study, Kanter defined the construct of innovative work behavior as one which is consisting of the problem recognition and the generation of either new or adopted solutions or ideas, the search for a coalition and attempt to find sponsorship for the idea, and lastly, the dimension which incorporates the production of “a prototype or model of

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the innovation” (Kanter, 1988, p. 191). Comparatively, De Jong and Den Hartog (2010) as well as Yuan and Woodman (2010) differentiate between four dimensions of innovative work behavior, namely the idea/opportunity exploration, idea generation, idea championing and the implementation of ideas. Messmann and Mulder (2012) follow this conceptualization of innovative work behavior in their work, however adding one dimensions to their construct which they describe as a “fifth necessary innovation task” (p.45), namely the reflection phase of individual innovation. In the following, these five dimensions of innovative work behavior are going to be depicted to achieve a better understanding of the construct that is underlying the present research.

a) Idea / Opportunity Exploration

In the beginning of the innovation process, it is usually the performance gaps, i.e. a mismatch between actual and potential performance, that lead to the detection of improvement points (De Jong, 2006). Often with an element of chance involved, individuals discover an opportunity or a problem arising and are triggered by the chance to improve current conditions. An actual threat that is requiring an immediate reaction is another reason why individuals of an organization might see the urge to act innovatively (De Jong & Den Hartog, 2010). Hereby, some opportunities seem to be easy to detect, while others are more difficult to identify (Petroski, 1992). Yet, there are various sources within an organizational setting in which opportunities can be explored, including the communication with business contacts, but also the use of informal contacts such as relatives (De Jong, 2006; Ozgen & Baron, 2007). In his work, Drucker (2002) identified seven sources of opportunities that can lead to the initiation of innovation, including:

 Unexpected occurrences, such as successes, failures or outside events

 Incongruities, i.e. gaps between expectations or assumptions and actual results

 Process needs (occurring as a reaction to identified problems or causes of failure)

 Industry and market changes (changes of contemporary market structures due to rapid growth, resegmentation, convergence of separate technologies, etc.)

 Demographic changes

 Changes in collective perceptions

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Overall, it can be stated that within an organizational setting, the idea or opportunity exploration encompasses the search for ways to improve current products, services and processes or the attempt to see them from a different spotlight (De Jong & Den Hartog, 2010).

b) Idea generation

As previously mentioned, creative ideas are the foundation for innovation (Scott & Bruce, 1994), thus the generation of ideas composes the next necessary stage in the construct of innovative work behavior. After the exploration of opportunities, the idea generation process involves individuals’ behavior that are directed at generating concepts that make use of the detected opportunities or that are developed for the purpose of improvement (De Jong, 2006). These concepts can herby relate to new products, services or processes, or can involve the entry of new markets, improvements in current work processes, or in general terms, solutions to identified problems (De Jong, 2006). However, the process of idea generation does not only include the origination of novel and original ideas but also incorporates the ability to combine and reorganize existing information and concepts to solve detected problems or diminish performance gaps (De Jong & Den Hartog, 2010). Following this stream of thought, the adaptation of ideas that are originated outside of one’s organization to one’s own work context, can also be perceived as a way to generate solutions or ideas to problems on hand (Woodman & Griffin 1993). The ability of individuals to analyze problems or to improve performances by approaching them from different angles, composes a crucial part in the development of innovations, thus, on an organizational level, plays a considerable role in innovative work behavior of employees.

c) Idea Championing

Once the ideas have been generated or new techniques and solutions introduced in order to address problems, often, those new concepts and solutions need to be promoted as they are usually new to the work group or organization (De Jong & Den Hartog, 2010). Uncertainties about the pay-off coming from new ideas, i.e. questions about whether the benefits of new ideas will exceed the costs of their implementation, may lead to opposing positions and resistance within an organizational setting.

Resistance towards new ideas, working methods or approaches might be hereby rooted in several causes. With the proposition of new ideas that are unknown to the organization, individuals usually first examine their effect on them and their work role. The fear that one’s

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knowledge or abilities might not be sufficient or outdated to fulfill the new tasks or way of usage accompanying innovations, is often one reason for resistance to originate (Dent & Goldberg, 1999). Another reason for people’s resistance towards new ideas is originated in their tendency to be caught up in their existing tasks or views so that new information is only perceived selectively or limited (De Jong, 2006). Therefore, newly introduced ideas or concepts do not attain any priority and are overlooked. In this case, falling back into conventional ways of working or into familiar patterns can be considered as a further cause for new ideas to fail within an organizational setting. In literature, other causes for resistance towards innovation are stated as e.g. inertia, misunderstanding and miscommunication, lack of trust, threat to job status, fear of failure, surprise or uncertainty (Dent & Goldberg, 1999).

As a consequence, the development of innovations usually demands the coalition-building and promotion of ideas within the organizational rows to achieve their implementation (De Jong, 2006). In literature, innovation champions are defined as individuals in informal roles who push creative ideas forward, help promoting and realizing innovative ideas in their organizations (De Jong & Den Hartog, 2006). The ability of an organization to enable the development of such individuals who were not formally appointed for this role but still feel personally committed to the spread of creative ideas or concepts in their work environment, can prove to be of great importance for its innovative endeavours. The persuasion and promotion process of creative ideas or novel concepts by such champions often prove to be a highly effective way to reach organizational acceptance and support, since these individuals are usually able to better empathize with their co-workers, supervisors and other stakeholders. Hence, understanding their existing views or attitudes, innovation champions succeed in addressing their concerns and opposing attitudes in an effective way. Typical actions and behaviors of innovation champions include the support finding and coalition building through the expression of enthusiasm or confidence about the success of an innovation, persistency and the efforts to involve the right people (Howell, Shea & Higgins, 2005).

d) Idea Implementation

As previously mentioned, the implementation stage of innovative work behavior is one of its main distinguishing attributes from the concept of creativity (Amabile, 1988). A result-oriented attitude that is characteristic for innovative behavior and considerable efforts are needed to implement a new idea or concept in a work environment (De Jong & Den Hartog, 2010). On the one hand, the implementation stage encompasses all tasks and efforts needed to turn a

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creative or innovative idea into reality (De Jong, 2006). These tasks may include the development of a new product or work process, the initiation of prototypes and the testing and modification of these (Kanter, 1988). On the other hand, the implementation dimension of innovative work behavior also incorporates the challenge to make these new behaviors part of the daily routine and a work habit of organizational members.

In sum, idea exploration, idea generation, idea championing and idea implementation have been labelled as overall contributors to the construct of innovative work behavior (De Jong, 2006) and have been further proven to be required for the successful development of innovations in an organization. The tasks inherent in the stages partly build on each other but are in the same time iteratively connected through feedback loops (Messmann & Mulder, 2012), meaning that the completion of one phase may lead to one of the previous or sequential phases. Messmann and Mulder (2012) pick up on this particular characteristic of innovative work behavior and while stating that the stages “do not follow a linear sequence”, confirm that the model of individual innovation follows a “complex, iterative and non-linear” (2012; p.45) pattern. Due to these discontinuous activities that are characteristic for innovations, individuals can be expected to be committed to any combination of these behaviors at any point of time (Scott & Bruce, 1994). In this line, innovative work behavior can be further considered to be dynamic in its nature since it is initiated and carried out by individuals and also as a context-bound construct as innovations are realized in a particular work context (Messmann & Mulder, 2012).

e) Additional dimension: Reflection

Although most of the academics agree on four stages of innovative work behavior and depict them as a set of physical and cognitive work activities carried out by employees (e.g. Messmann & Mulder, 2012; Scott & Bruce, 1994; Dorenbosch et al., 2005), in some cases, there are variations in the perception of IWB dimensions. Messmann and Mulder (2012) for instance, who investigate the development and validation of a measurement instrument of innovative work behavior in their research, define reflection as a necessary fifth dimension and add it to the tasks required for innovation development. As a justification of their conceptualization, they refer to the evidence provided in research that states that “reflecting on ideas, strategies, activities and outcomes contribute to the entire process of innovation development” (2012, p. 45). Moreover they argue that cogitation can considerably contribute to the regulation and

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improvement of individual performance and reflecting on the process of innovative work behavior can add value to its execution.

In an organizational setting like Philips it is important to comprehend that the adaptation of an innovative work behavior can translate into various ways and can incorporate behaviors characteristic for different IWB dimensions. It does not only include the generation of original and novel ideas but moreover ranges from smaller scale on-the-job innovations to considerable changes in work behavior that add to the employees’ daily work experience and productivity (Dorenbosch et al, 2005; Axtell et al., 2000). In an organization where numerous guidelines, KPIs or stakeholders might hold an individual back from being able to actually express his or her creativity in form of a novel idea, product or service, it is crucial to understand that there are other ways to express individual innovation. The acknowledgement of various dimensions that comprise the construct of innovative work behavior directs the focus of a research on a broader range of activities of employees, hence, shows the need to go beyond the idea of creativity and idea generation. Therefore, for an accurate representation, a potential measurement of innovative work behavior of organizational members needs to take behaviors and a set of activities within the various dimensions into account.

Exhibit 1: Innovative Work Behavior (IWB) dimension

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Research on innovative work behavior to date has brought forward two significant streams of analysis: the area focusing on the development of a measurement model of innovative work behavior (e.g. e.g. Messmann & Mulder, 2012; De Jong & Den Hartog, 2010) and the exploration or identification of possible antecedents to individual innovation (e.g. Yuan & Woodman, 2010; Scott & Bruce, 1994; etc.). Both streams found considerable attention among academics, as both the measurement and the factors influencing innovative work behavior are of a great value when it comes to the analysis within an organizational setting. After having defined and conceptualized the dimensions of innovative work behavior, the following sub-chapters will focus on the presentation of these two streams of research.

III.2.2 Measuring Innovative Work Behavior

Previous measures of innovative work behavior have mainly consisted of one-dimensional models with limited items operationalizing their measurement scales (e.g. Bunce & West, 1995; Scott & Bruce, 1994; Spreitzer, 1998). Scott and Bruce (1994) were among the early researchers, developing a seminal model of IWB measurement. Their one-dimensional 6-item scale, covering idea generation, coalition building and the implementation of ideas, was applied with the help of supervisor ratings that evaluated the behavior of subordinates. However, their model of measurement did not take an empirical separation of IWB into dimensions into account and therefore left room for improvement (De Jong & Den Hartog, 2010). Based on Scott and Bruce’s research, Janssen (2000) developed and tested one of the first multi-dimensional measures by including both supervisor- and self-ratings to his model. With a nine-item scale, he tapped into the stages of idea generation, idea promotion and idea implementation, finding that they strongly correlate with each other and coming to the conclusion that the items could best be combined to form a single additive scale for innovative work behavior (Janssen, 2000). In the attempt to build on Janssen’s work and develop a multi-dimensional measure of IWB, de Jong and Den Hartog (2010) constructed a ten-item measure scale of four IWB dimensions (idea exploration, generation, championing and implementation) using supervisor ratings on employees’ innovative work behavior. Their results were in line with Janssen’s outcomes, suggesting that the items could be combined additively to form an overall measurement model for individual innovation (De Jong & Den Hartog, 2010).

Taking the research results of previous mentioned measurement models as a starting point, Messmann and Mulder (2012) catered their research to the development and validation of a measurement instrument that conceptualizes IWB as a dynamic and context-bound construct.

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The dynamic characteristics has been reasoned by the complex relation of employees’ past work activities and their current work behavior that both have an influence on the process of innovation development as well as the individual development of an employee. On the other hand, they argued that work activities and outcomes are influenced and made meaningful by factors within the work context (Messmann & Mulder, 2012). By measuring innovative work behavior on four scales representing items of opportunity exploration, idea generation, idea promotion and reflection, the researchers operationalized their measurement based on work activities and based in employees’ work context. One aspect that distinguishes Messmann and Mulder’s work is that certain criteria for measuring innovative work behavior have been previously stated and their compliance have been taken into account when constructing an overall measurement model.

The five criteria were depicted as the following (Messmann & Mulder, 2012): 1) Innovative work behavior is measured based on work activities.

2) The measurement model is grounded in the context in which work activities are carried out.

3) The dimension of ‘reflection’ must be considered as a distinct task.

4) The social aspect of innovative work behavior (i.e. the dynamic actions of employees in a work context) has to be taken into account when measuring the construct.

5) The measurement instrument has to be developed based on the Messmann and Mulder’s previous conceptualization and operationalization of innovative work behavior.

The results of their study, confirmed the dynamic and context-bound characteristic of an IWB measurement model and furthermore approved the social-interactive and reflective facets of innovation development. This knowledge is particularly of importance considering an ever-changing work environment in an organization. At Philips, for instance, where social interactions between employees and a dynamic, international work environment are prevailing, the requirement of a dynamic and context-bound measurement model of IWB seems to be comprehensible and even the only valid option.

III.2.3 Determinants of Innovative Work Behavior

To validate their measurement constructs, researchers usually used a number of related factors that have been proven by previous studies to have an influential effect on innovative work behavior. De Jong and Den Hartog (2010), for instance, used the aspects of Participative

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Leadership, External Contacts and Innovation Output, whereas Dorenbosch et al. (2005) focused on Job Design (Functional Flexibility), HRM practices and Production Ownership in their development of a measurement scale.

The incentive to understand the construct of innovative work behavior, to measure and possibly influence it, has attracted many more academics to investigate possible factors that might have a direct or indirect effect on individual innovation. Examples of determinants of innovative work behavior that were examined in previous work are provided in table 1. It is worth mentioning that the overview provided is not exhaustive but rather gives an impression of the diversity of factors investigated in literature.

A substantial body of literature follows the categorization of antecedents initiated by West and Farr (1989) who presented five major categories for factors influencing individual innovation within a work setting: Individual factors, work group / team factors, relationship factors, organizational factors and job role factors. Most of the determinants researched in the past years, fall into one or multiple of these categories when considering their characteristics.

IND

IVIDU

AL L

E

VEL

Intrapreneurship personality Åmo & Kolvereid, 2005 Self-Efficacy

Axtell et al., 2000; Farr & Ford, 1990

Taking initiative Huiskamp et al., 2008

Proactive personality Seibert et al., 2001; Åmo, 2005 Employability Stoffers & Heijden, 2009

Education level Janssen 2000

Problem solving style Scott & Bruce, 1998 Learning goal orientation Hirst et al., 2009 Expected performance

outcomes Yuan & Woodman, 2010

Intrinsic motivation Yuan & Woodman, 2010 Dissatisfaction with the status

quo Yuan & Woodman, 2010

Tolerance of ambiguity Barron & Harrington, 1981; Patterson, 1999

Extraversion Barrick & Mount, 1991

Autonomy Spreitzer, 1995; Parker et al., 2006 Propensity to innovate _{Bunce & West, 1995}

Production ownership Dorenbosch et al., 2005 Intellectual stimulation

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24 WORK GROUP/ T E AM L E VEL

Team leader support Axtell et al., 2006 Team method control Axtell et al., 2000 Team role breath Axtell et al., 2000 Team support/support for

innovation

Axtell et al., 2000; Scott & Bruce, 1994

Evaluative context Shalley & Perry-Smith, 2001 Reputation as innovative Yuan & Woodmann, 2010

REL ATIO NSH IP L E VEL

Participative leadership Axtell et al., 2000; Kanter, 1983 Supportive leadership Axtell et al., 2000

Transformational leadership Pieterse et al., 2010; Janssen, 2002/2005

Transactional leadership Pieterse et al., 2010 Influence-base leadership Krause, 2004

Leader member exchange Scott & Bruce, 1994; 1998 Supervisor relationship quality Yuan & Woodmann, 2010 Stimulating-leadership

behaviors De Jong & Den Hartog, 2007

External work contacts De Jong & Den Hartog, 2005

ORGANIZAT

IONAL L

E

VEL

Organizational climate Imram et al., 2010; Scott & Bruce, 1994

(Perceived) Support for innovation

Scott & Bruce, 1994; Yuan & Woodmann, 2010

Corporate entrepreneurship strategy

Åmo & Kolvereid, 2005

Innovation strategy De Jong & Den Hartog, 2005 Provision of a clear vision De Jong & Den Hartog, 2007 Innovation as job requirement De Jong & Den Hartog, 2007 Pay

Ramamoorthy, N., Flood, P. C., Slattery, T., & Sardessai, R., 2005 Desire for employee innovation Åmo , 2005

Reward system Eisenberger & Armeli, 1997; Baer, Oldham & Cummings, 2003 Use of creativity techniques Leonard & Swap, 2005

JOB ROL E L E VEL

Job autonomy Ramamoorthy et al., 2005

Job demands /

Perceived obligation to innovate

Janssen, 2000; Ramamoorthy et al., 2005; Yuan & Woodmann, 2010 Functional flexibility Dorenbosch et al., 2005

Role orientation Axtell et al., 2000; Dorenbosch et al., 2005

Job tenure Dorenbosch et al., 2005

Job control Axtell et al., 2006

Influence in work place Janssen, 2005 Psychological and structural

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25 Job design

Dorenbosch et al., 2005 Job complexity Oldham & Cummings, 1996 Job dissatisfaction Zhou & George, 2001

Firstly, innovative work behavior can be understood as a complex model influenced by numerous factors on an individual level. Particularly the early research on innovative work behavior treated individual innovativeness as a facet or trait of personality (De Jong, 2006). Some researchers argue, for instance, that individuals who have an intrapreneurship personality or are proactive in their behavior, display higher levels of innovative work behavior than others in their workplace (e.g. Åmo & Kolvereid, 2005; Seibert et al., 2001). Proactive behavior has been stressed as an important influencer on innovative behavior by many academics who deliberately demonstrated the positive link between the different levels of proactive behavior such as personal initiative or self-efficacy and innovative work behavior (Farr & Ford, 1990; Seibert et al., 2001). Other personal characteristics affecting innovative work behavior that have found much attention in literature are, for instance, tolerance of ambiguity (Barron & Harrington, 1981), extroversion (Barrick & Mount, 1991) or intrinsic motivation (Yuan & Woodman, 2010). A second stream of research investigated the impact of cognitive features, such as problem-solving style (Scott & Bruce, 1994) or production ownership (Dorenbosch et al., 2005) of employees, finding significant correlations between these factors and innovative work behavior. Production ownership is a prominent example in literature which is seen as an underlying cause for proactive motivation and understood as the extent to which employees feel concern for tasks that go beyond their operational role at work (Dorenbosch et al., 2005). Hereby, employees who feel higher levels of responsibility for problems arising in their workplace are considered to more likely engage in innovative activities or change in their work environment.

The second category of factors determining innovative work behavior that emerged from research in recent years, is referring to group or team level determinants. Teams or work groups play a crucial role within an organizational setting. As a matter of fact, no individual can innovate alone in an organization, or at some point, new products, processes or approaches coming along with innovations will have an effect on others in a work group (De Jong, 2006). Team support, team role breath and team method control are among the concrete factors shown

Table 1: Table of Determinants of Innovative Work Behavior

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to have a significant influence on individual innovation, affected by the way team members perceive the interaction, communication and work process with each other (Axtell et al., 2000). Despite its importance for the innovativeness of an individual, however, determinants on a team level have not been covered as vastly as other antecedent levels in literature and research remains scarce (Axtell et al., 2000).

Relationship factors in the wider organization are considered to build up the third category in the range of innovative work behavior antecedents. Hereby, research in this field of study mostly focused on the relationship characteristics between leaders and subordinates driven by the motivation to find ways to influence employees’ work behavior and more effectively using their potential in the context of business management (De Jong, 2006). Within this view, several leadership styles, such as transformational, participative, transactional or supportive leadership, have been found to be significantly promoting innovative work behavior (Scott & Bruce, 1994; Axtell et al., 2000; De Jong, 2006). Employees in organizations in which management executives follow a participative leadership style for instance, are given much more autonomy and furthermore, are encouraged to take part in the decision-making process in an increased manner (Axtell et al., 2000). Autonomy and a proactive participation of employees in turn, have a proven positive relation to dimensions of innovative work behavior, as it induces individuals to get creatively involved in the innovation process and encourages their ownership (De Jong & Den Hartog, 2010; Axtell et al., 2000).

Another crucial determinant of individuals’ innovative behavior is the quality of their relationship to their supervisors or leaders (Yuan & Woodman, 2010; Scott & Bruce, 1994). It is an important aspect of the immediate work environment of the employee that directs his or her feelings and beliefs about the possible performance and image outcomes of his or her innovative behavior (Yuan & Woodman, 2010). Through increasing quality of leader-member exchange, a formal and impersonal relation between a supervisor and subordinate can turn into a mature interaction marked by trust, respect and mutual affection which in turn can lead to greater autonomy for the employees and support for their innovative decisions (Scott & Bruce, 1994). However, determinants on the relationship level not only encompass the leader-employee relationship as influential of innovative work behavior. De Jong (2006) for instance emphasizes the relation between the frequency and diversity of external work contacts and innovative work behavior, arguing that increased contact with external groups or individuals might serve as a substantial source for innovative inspiration or resources.

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Determinants of innovative work behavior that are emerging from an organizational context or that are bound to an organizational context, have found substantial attention among the recent years’ researchers (e.g. Scott & Bruce, 1994; Yuan & Woodman, 2010; Axtell et al., 2000; De Jong, 2006). Particularly the importance of organizational climate and perceived support for innovation have been argued to be deterministic for the individual innovative behavior of employees (Yuan & Woodman, 2010; Scott & Bruce, 1994). Organizations with a proactive innovative climate use “expectancies” and “instrumentalities” (Scott & Bruce, 1994) to signal their employees that being innovative is a desirable image, use reward systems to recognize their innovative efforts and furthermore display an orientation towards the pursuit of creativity and innovative change throughout the organization. A proactive climate is proven to positively influence innovative work behavior, as it not only displays an overall organizational desire for employee innovation but also legitimates an environment for experimentation and allows for trial and error (Yuan & Woodman, 2010). Employees who perceive their environment as one that is supportive for innovative behavior, for instance through its dedication to a specific innovation and entrepreneurship program, will perform higher levels of innovative work behavior (De Jong, 2006; Scott & Bruce, 1994).

Related to organizational factors that determine individual innovation, job role level characteristics are shown to be deterministic for the motivation to act innovatively (Axtell et al., 2000). As previously mentioned in the context of participative leadership, autonomy within the job context plays an important role in igniting the creativity and innovative behavior of employees (Axtell et al., 2000). Furthermore, a multifunctional job design, for instance, is argued to be enhancing the innovative work efforts of employees, as it triggers a high variety of tasks and skills (Dorenbosch et al., 2005). Functional flexibility “broadens the concern for work issues beyond the immediate tasks” (Dorenbosch et al., 2005, p. 139) and moreover encourages the production ownership of individuals in their work environment. In this line, the perceived obligation to innovate as a job requirement adds to the achievement of higher levels of individual innovation (Yuan & Woodman, 2010; Ramamoorthy et al., 2005). Other examples of factors regarding the job role of individuals that are proven to be positively related to innovative work behavior are job control (Axtell et al., 2000), psychological and structural empowerment within the job role (Pieterse et al., 2010) or job tenure (Dorenbosch et al, 2005). Though both streams of IWB literature, the one focusing on IWB dimensions and the other that is occupied with the exploration of IWB determinants, have gained much attention by scholars, there have been only a few studies that tried to establish a link between the two. Axtell et al.

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(2000) addressed the research gap existing in this field and dedicated part of their study to examine if particular IWB determining factors have an increased influence on particular IWB dimensions. As a result of their research they contested that individual factors have a stronger influence on the first dimensions of innovative work behavior, particularly on the idea generation dimension, whereas team factors and organizational factors affect the implementation dimension the most. However, Axtell et al.’s research remains unaccompanied in literature and research coverage on the link between IWB dimensions and antecedents is very little to non-existent to the author’s knowledge.

After having clarified the term innovative work behavior, illustrated its dimensions and elaborated on potential factors influencing this construct, it is important to consider the findings with regard to its relevance for this research.

The above depicted theory on IWB shows that for an overall understanding of innovative work behavior, hence the answer to the research question of this study, it is required to fully acknowledge innovative work behavior as an extensive, complex construct that comprises several dimensions and can be determined by numerous external factors. West and Farr’s (1989) categorization of individual, team, relationship, organizational and job role level determinants of innovative work behavior, indicates that influential factors in an organization can originate in various sources. Thus, the accurate assessment and in a further step, the conscious manipulation of innovative work behavior, demands for the examination of an organizational work environment for these categorized factors. Whereas organizational factors such as the support for innovation or an individual innovation enabling climate are more likely to be recognized as influential factors by the management, IWB determinants founded in the relationship or individual categories seem to be less apparent. The overview in table 1 amplifies the extensiveness of factors that might have an influence on the work behavior of employees and therefore presents potential channels through which an organization like Philips, for instance, might succeed in positively affecting the work behavior of organizational members via corporate innovation and entrepreneurship programs.

III.3 Corporate Innovation and Entrepreneurship

Having expressed the importance of an innovation supporting organizational climate for the individual innovation of employees in the last sections of this thesis, in the following, present studies on how to operationalize innovative work behavior within the framework of a corporate innovation program are going to be discussed.

Encouraging innovative work behavior in the workplace : how does the Philips Masterclass Program influence the innovative work behavior of its participants?

Master Thesis