CLIMATE CONTROL:
THE ROLE OF MANAGEMENT CONTROL SYSTEMS IN STIMULATING ORGANIZATIONAL CLIMATE AND INNOVATIVENESS.
by
Willem Mendel S1536443
First supervisor: Dr. T.L.J. Broekhuizen Second supervisor: Prof. Dr. W.A. Dolfsma
University of Groningen Faculty of Economics and Business
ABSTRACT
Organizations need to be flexible, adaptive and innovative to meet the changing demands of today’s environment.The working atmosphere (organizational climate) within an organization has proven to be an important factor in meeting these criteria. This study raises the question whether and how the management control system (MCS) influence innovative performance as well as the organizational climate for innovation. The study surveyed 46 respondents from 7 different organizations representing 6 different industries, to examine the influence of the MCS on the organizational climate and innovativeness of the organization. The results indicate that two reward-related elements of MCS contribute to creating an organization climate supportive of innovation: a reward system which emphasizes individual incentives and one that encourages risk taking. Second, a MCS characterized by loose budgetary tightness and the use of non-financial measures in performance evaluation has a direct positive influence on the innovativeness of the organization. The findings of this study point out that the design of the MCS can influence innovativeness and the organizational climate for innovation.
ACKNOWLEDGEMENT
This master thesis is the result of a ten months study in the fields of organizational climate and management control and was conducted as a final project of my MscBA in Strategy and Innovation at the University of Groningen. I would like to use this opportunity to thank a number of people for their support during the process of writing my thesis.
First of all I would like to thank my thesis supervisor, Dr Thijs Broekhuizen, for his support and valuable feedback. His quick responses and concise answers to questions helped me to find the right direction and enabled me to improve the quality of my thesis.
I would also like to thank Mr Jan Lahuis for giving me the opportunity, freedom and all necessary support to do my research. Furthermore I would like thank all those who assisted and helped me get into contact with organizations to collect my data. Special thanks go to Dr Luc De Schryver for his help in processing the data.
TABLE OF CONTENTS ABSTRACT ... 3 ACKNOWLEDGEMENT ... 4 TABLE OF CONTENTS ... 5 1. INTRODUCTION ... 7 1.1 Research topic ... 7 1.2 Problem definition ... 9 1.3 Research question ... 10
1.4 Theoretical and managerial relevance ... 11
1.5 Organization of the paper ... 11
2. LITERATURE REVIEW ... 13
2.1 Organizational climate ... 13
2.2 Constructs of organizational climate ... 20
2.3 Management control systems ... 23
2.4 Conceptual model and hypotheses ... 27
3. METHODOLOGY ... 40
3.1 Research design ... 40
3.2. Sample and data collection ... 40
3.3 Quantitative part: Instrumentation and measurements ... 42
3.4 Qualitative part: Critical incidents approach ... 47
3.5 Construct validity and reliability of quantitative part ... 48
3.6 Common method variance ... 52
4. RESULTS ... 54 4.1 Structural model ... 54 4.2 Hypotheses testing ... 56 4.3 Qualitative results ... 57 5. DISCUSSION ... 61 5.1 Discussion of results ... 61 5.2 Managerial implications... 63
5.3 Limitations and future research ... 65
5.4 Conclusion ... 67
REFERENCES ... 69
APPENDIX ... 90
Appendix 2 – List of job-titles participants ... 91
Appendix 3 – Equations and calculations ... 92
Appendix 4 – Mediation relationship ... 93
Appendix 5 – Individual qualitative ‘help’ response. ... 94
1. INTRODUCTION
1.1 Research topicCompetitive pressures and rapid technology advances increase the need for organizations to continuously adapt, improve, and innovate (Brown & Eisenhardt, 1995). Firms with greater innovativeness have shown to be more successful in responding to changing environments and developing new capabilities to achieve better performance (Montes, Moreno, & Fernandez, 2004; Chen, Huang, & Hsiao, 2010).
Ekvall (1997) has illustrated that organizational climate (or working climate) plays a key role in determining the outlook or prospects of innovation and change taking place within organizations. One of the factors that influence the organizational climate is the management control system (MCS) (Isaksen, Lauer, Ekvall, & Britz, 2000). Management control has recently been linked to innovation and entrepreneurship (Davila, Foster, & Oyon, 2009), which is, opposed to what is stated in traditional management control literature,
The management control system can be described as the formal routines and procedures managers use to maintain or alter patterns in organizational activities to motivate people to achieve organizational objectives (Simons, 1995). The MCS affects the day-to-day operations of the organization as it aids management in steering an organization toward its strategic objectives and competitive advantage.
innovation productivity, steer the behavior of employees towards innovation, and help to ensure that their ideas are effectively translated into innovations.
The work of Isaksen et al. (2000) shows us that there is a direct link between a MCS and the organizational climate in the form of systems, policies, and procedures. Organizational climate in this case is defined as the shared perception of the way things are done and the typical patterns of behavior that characterize life in the organization. And while they state that the management controls system asserts direct influence, they leave open how strong this influence is and how it can be channeled in such a way that it promotes an organizational climate supportive of innovation.
The relationship between organizational climate and organizational outcomes in terms of productivity, creativity, and innovativeness has consistently been discussed in articles. For example, Lauer (1994), Ekvall (1996), and Isaksen and Ekvall (2007) indicate that climate has an influence on decision making, communication, teamwork, problem solving, and numerous other organizational processes. By exerting influence on these processes, climate ultimately influences the performance and well-being of the organization.
The overall well-being of the organization in this case includes factors such as “the ability to generate and implement change, produce new products and services, tap the creative talents of its people, and produce sustainable and profitable growth” (Isaksen & Ekvall, 2007, p. 35).
1.2 Problem definition
Research has shown that companies with a favorable organizational climate achieve higher levels of interaction and flexibility as well as higher innovative productivity (James, Choi, Ko, McNeil, Minton, Wright, & Kim, 2008). For organizations to be able to actively manage their organizational climate, they need to be aware of which factors influence the organizational climate and how to use them to their advantage. In their model of organizational change (Figure 2), Isaksen et al. (2000) illustrate that besides the external environment, there are 10 internal variables or factors that assert influence on the organizational climate. One of the internal (transactional) factors that influence the organizational climate is “systems, policies and procedures.” These are the mechanisms that facilitate work and provide structure for the organization and include pay practices, rewards and recognition policies, performance appraisals, budgets, and financial controls; they closely resemble the MCS of the organization.
Pasmore (1988) and Isaksen et al. (2007) state that how the (management control) systems are implemented and what people think about them have an influence on the climate. However, what they leave unanswered is how significant this influence is and how it can be used to create a climate supportive of creativity and innovation.
formal and informal MCS can support and improve the innovative capacity of the organization (Davila, Foster, & Oyon, 2009).
As such, this study tries to explore how MCS will affect the organization in creating a supportive climate for innovation and how it will affect the innovativeness of the organization directly. By exploring and clarifying these issues, management and practitioners in the field can manage and organize their MCS, and therefore their business, in a more efficient way.
1.3 Research question
Since management control has an influence on the organizational climate for innovation, and climate influences innovation, this study focuses on exploring the intervening nature of the climate between the management control system design and organization innovativeness (see Figure 1).
Figure 1: Research model
Extant literature on climate and management control has mainly focused on a single institution or industry. This study follows the work of Isaksen and Akkerman (2011) and seeks to explore the existence of climate’s intervening nature across organizations. It explores the intervening nature of climate across a variety of organizations and industries to discover whether the same sort of relationships can be found. The following questions will be addressed:
Does the organizational climate act as an intervening variable and mediate the relationship between the management control system and innovativeness of the organization?
1.4 Theoretical and managerial relevance
The major focus of this study is to provide understanding as to what extent the management control system affects the organizational climate for innovation. By doing so, it shows that how the controls are used and designed is of importance to whether it acts as a stimulant or barrier to innovation. Secondly, the present study makes a contribution to the ongoing discussion on budget controls and shows that small organizations in this study, predominantly, faired best by using loose budget control.
For practitioners, the current study points out that when managers need to obtain innovative results, they should include a focus on deliberately creating a climate for innovation. When managing or creating such a climate for innovation in their organization, the managers should be aware that the reward system is factor of influence. Not only does the MCS influence the organizational climate, it can also influence the innovative outcomes of the organization directly. It shows that the MCS can be a valuable channel to communicate to managers and employees what is expected and what (innovative) behavior is supported and rewarded.
1.5 Organization of the paper
2. LITERATURE REVIEW
This part of this paper answers the main research questions from a theoretical perspective. It analyzes the organizational climate and management control literature and past studies to come up with hypotheses concerning the relationship between the two constructs and with innovativeness.
2.1 Organizational climate
The concept of organizational climate has been described and defined by various authors. Reichers and Schneider (1990, p.22) stated the following about organizational climate: “It is the shared perception of the way things are done around here,” or more precisely: “Climate is shared perceptions of organizational policies, practices, and procedures.” Others, such as Burke and Litwin (1992), refer to it as “the collective impressions, expectations, and feelings that members of local work units have that, in turn, affect their relations with their boss, with one another, and with other units” (p. 526).
What these definitions have in common is that climate can be observed from a workgroup/organizational level, and although it is measured as the perceptions of the individual employee, the aggregated perceptions form the organizational climate. Of equal importance is that culture and climate are two distinct constructs, although they are often used interchangeably. How they relate, and more importantly, how they differ are discussed in the section below.
2.1.1 Climate versus culture
(Schneider & Gunnarson, 1991). There have been significant discrepancies among different authors, as some continue to use the terms interchangeably (Schneider, 1991); others state that culture and climate overlap or that one encompasses the other (Denison, 1996); and a last stream of authors argue that the two concepts are distinct constructs (Glisson & James, 2002; James et al., 2008). The following section will provide some clarity on culture and climate as separate constructs.
In a review of 10 years of organizational climate and culture research, Denison (1996) tried to assess and summarize the differences between the two constructs. He came to the conclusion that culture was more a long-term, stable, and deep construct, whereas climate was something that was more amendable to change, controllable by management, and included aspects of the social environment that were consciously perceived by its organizational members. The differences between culture and climate are summarized in Table 1.
Table 1: Differences organizational culture & climate
Culture Climate
Definition “The value beliefs, history, traditions etc., reflecting the deeper foundations of the organization.”
“Recurring patterns of behavior, attitudes, and feelings that characterize life in the organization.”
Level of analysis
Organization Individual or shared perceptions of groups
Change Difficult to change Amenable to change and
improvement
Influence on MCS
Very limited Yes
What the organization values What organization members experience
Source: Akkermans, (2008) and Isaksen & Ekval (2007)
management control systems will be visible in the organizational climate. Secondly, from a managerial point of view, when one tries to reorganize or steer the organization in a new (more innovative) direction, organizational climate is much easier to change. This reasoning can be confirmed by quoting Thomson (1998, p. 240):
Changing the culture of an organization by tackling it head on as a single facet of organizational life is really, really tough. To go deep into cultural change you have to be talking about beliefs and values, and these go to the very soul of the organization and its people. It is much easier to change the climate and language of a business.
2.1.2 Units of analysis
To get a better understanding of the concept of climate in organizational research, one has to explore more closely the different levels of analysis involved in the climate construct. Units of analysis in climate research have been debated for more than two decades (James, 1982; James & Jones, 1974; Glick 1985). Originally, the organization was considered the natural unit of analysis in organizational climate research (Litwin & Stringer, 1968). After the distinction was made between psychological and organizational climate, different units of theory (individual and organizational) were suggested as being more appropriate for the two constructs (James & Jones, 1974; Glick 1985). More recently, a third set of climate constructs, alternately called “subsystem,” “group,” or “subunit” climate, was introduced (James et al., 2008), bringing the total to three levels of analysis, namely: individual, subunit (teams), and organizational units of theory.
his or her own well-being” (James et al., 2008, p. 20). When these individual perceptions are aggregated, based on the belief that individuals in the organization have a sense of “shared meaning,” the results are referred to as team (at the group level) or organizational climate (Isaksen & Akkermans, 2011). The reasoning behind aggregating individual data to a unit level is based on the assumption that these organizational social systems have their own climate, which can be demonstrated by ”identifying significant differences in climate between units and significant agreement in perceptions within units” (Patterson, West, Shackleton, Dawson, Lawthom, Maitlis, Robinson, and Wallace, 2005, p. 380).
2.1.3 Climate for creativity and innovation
Mumford and Gustafson (1988, p. 37) focus specifically on the link between climate and innovation, and they argue that organizational innovation depends on an organizational climate by stating: “Even when individuals have developed the capacity for innovation, their willingness to undertake productive efforts may be conditioned by beliefs concerning the consequences of such actions in a given environment.” As such, a strong climate for innovation may act as a method for focusing employee attention and creating a collective way of thinking and behaving that is supportive of innovation (Kazama, Foster, Hebl, West & Dawson, 2002).
Research by Ekvall (1983; 1987; 1997; 2002) shows that a creative organizational climate can differentiate innovative organizations form stagnated ones, whereby innovative organizations score significantly higher on number of patents obtained, technical and market originality, business strategy, and success in developing new products and services.
Although it is clear that the innovativeness of an organization is dependent on a climate that supports innovation, the dimensions and variables that make up and influence such a climate are in need of more research and support (Isaksen & Akkermans, 2011). The next section will explore this more in depth.
2.1.4 Dimensions of organizational climate
carried out comprehensive literature studies and meta-analyses identifying the most important dimensions that predict innovation in organizations.
Table 2: Definition of climate dimensions
Dimension Definition
Positive interpersonal exchange A sense of “togetherness” and cohesion in the organization. Intellectual stimulation Debate and discussion of ideas is encouraged and supported in the
organization.
Challenge Jobs/tasks are challenging, complex, and interesting.
Flexibility and risk taking The extent of encouragement and support for new ideas and innovative approaches, and an orientation toward change.
Top management support Creativity is supported and encouraged at the upper levels of the organization.
Positive supervisor relations Supervisors are supportive of new and innovative ideas.
Positive peer group A supportive and intellectually stimulating peer group. Relationships characterized by trust, openness, humor, and good communication. Mission clarity Awareness of goals and expectations regarding creative performance Organizational integration The extent of interdepartmental trust and cooperation.
Participation Participation is encouraged and supported, and communication between peers, supervisors, and subordinates is clear, open, and effective.
Product emphasis Commitment to quality as well as originality of ideas Reward Orientation Creative performance is tied to rewards in the organization. Resources The organization has, and is willing to use, resources to facilitate,
encourage, and eventually implement creative ideas.
Autonomy Employees have autonomy and freedom in performing their jobs.
Source: Hunter et al. (2007)
are supported and used in the recent work of other scholars and climate measurement instruments. The dimensions are listed in order of most influential in respect to measures of creativity and innovation, according to Hunter et al. (2007).
Table 3: Overview of the most important climate dimensions for innovation
(*) Climate measurement instrument. PP = Positive Peer Group, PS = Positive Supervisor Relations, Re = Resources, Ch = Challenge, MC = Mission Clarity, Au = Autonomy, PIE = Positive Interpersonal Exchange, IS = Intellectual Stimulation, TM = Top Management Support, RO = Reward Orientation, Fl = Flexibility and Risk Taking, PI = Product Emphasis, Pa = Participation, and OI = Organizational Integration.
In total, 13 works were included in the review; each of them was tested on two criteria: 1) focus on environmental factors related to creativity and innovation, and 2) the work mentioning more than one dimension of climate. Besides theoretical framework of climate dimensions, also
Author Yr PI IS Ch Fl TM PS PP MC OI Pa PE RO Re Au
Abbey & Dickson ‘83 X X X X X X
Anderson & West (TCI)* ‘98 X X X
Amabile (KEYS)* ‘96 X X X X X X X X
Bear & Frese ‘03 X X X X X
Scot & Bruce ‘94 X X X X X
Ekvall (SOQ)* ‘07 X X X X X X X X X
Lapierre & Girou ‘03 X X X X X X X X
Lone et al. (OCM)* ‘11 X X X X X X
Oldham & Cummings ‘96 X X X X X
Mohamed ‘02 X X X X X X
Nystrom et al. ‘02 X X X X X
Siegel (SSSI)* ‘78 X X X X X X X X
Thamain ‘03 X X X X X X
measurement instruments identified by Mathisen and Einarsen (2004) were added. They identified the Situational Outlook Questionnaire (SOQ), Team Climate Inventory (TCI), KEYS, and Siegel scale of Support for Innovation (SSSI) as instruments focusing on environments for creativity and innovation. This study added one recently developed instruments, the Organizational Climate Measure (OCM). Although the instruments does not enjoy the same support as the established instruments, it is interesting to see whether the more recently developed instrument support the dimensions identified by Hunter et al. (2005).
The results of the literature review show that most of the dimensions identified by Hunter et al. (2005: 2007) are also supported by recent literature and the measurement instruments. Positive interpersonal exchange, top management support, and positive supervisor relation receive much support, relatively. Dimensions producing relatively small effect sizes, such as reward orientation and resources, are correspondingly used to a lesser extent in recent theoretical frameworks and instruments. Although it is desirable, and perhaps necessary, to provide employees with sufficient resources and to recognize creative work, resources and recognition are apparently not as important as providing challenging work in an intellectually stimulating environment that is supported by top management (Hunter et al., 2007). It will be interesting to see how these findings relate to the impact of the management control on the organizational climate, as both reward orientation and allocation of resources likely make up important parts of the MCS.
2.2 Constructs of organizational climate
Schminke, 2009). More specifically, it establishes and puts into context the relationship between the MCS and organizational climate.
As discussed above, organizational climate can be seen as an intervening variable that affects individual and organizational performance. Based on the work of Burke and Litwin (1992) and Ekvall (1996), Isaksen and Ekvall (2007) illustrate in their “model of change” (Figure 2) the most important organizational factors that affect climate.
Figure 2: Model of Change
The four factors at the top of the model are mission & strategy, leadership behavior, organizational culture, and structure & size. Isaken and Ekvall (2007) refer to them as the transformational variables because any change within them is likely to be caused by an interaction with the external environment and will involve new behaviors within the organization.
The remaining elements of the model are generally referred to as transactional variables; they are aimed at preserving and implementing that which has been decided at the transformative level in the organization. Rather than strategic factors, some might call these more tactical elements (Isaksen & Ekvall, 2007). The six elements consist of resource & technology, management practice, task requirement, individual skills & abilities, individual needs, motives & styles, and lastly, systems, policies & procedures. These systems, policies and procedures are described by Isaksen & Ekvall (2007) as:
1992; Ekvall, 1996), empirical support still has to follow to prove this relationship exists. As such, this research explores and produces evidence on how management can use and design certain elements of the MCS to influence and create a supportive climate for innovation.
2.3 Management control systems
Now that the dimensions of organizational climate are elaborated on and the relationships are understood, tactics that influence and improve organizational climate can be developed. These tactics relate to the design and operationalization of the (formal) management control system in such a manner that they will enhance the organizational climate for innovation. However, before getting into detail and theorizing how the MCS should be operationalized, first the essence of the MCS is elaborated on. Furthermore, the findings in literature are discussed relating to whether or not a MCS is compatible with innovation and creativity.
Merchant (1982) argued that management control would not be necessary if all individuals in the organization would act in the best interest of the organization. In reality, however, many individuals are unwilling or unable to act in accordance with the organization’s set goals. As such, a control system is required to steer and direct the employees to favorable behavior that acts in the best interest of the organization. This control system can be defined as “the formal, information-based routines and procedures managers use to maintain or alter patterns in organizational activities” (Simons, 1995, p.5).
there to influence their decisions and the actions in such a way that they are largely consistent with the organizational goals (Flamholtz, 1979).
Central to every management control system is determining behavioral and/or output standards and putting into place mechanisms to ensure these standards are achieved (Merchant, 1985; Ford, 2005). Most of the mechanisms that are employed are diagnostic in nature; they require evaluation on whether and how well performance is achieving objectives and signal where problems may exist (Otley & Berry, 1980).
2.3.1 Managerial functions of MCS
In the absence of a control system that direct behavior towards organizational goals, individuals are more likely to make decisions and act in ways that are not in congruence with the organizational goals. As such, the primary function of control systems is to overcome conflict between the individual’s personal needs and goals and those of the organization. It can send unambiguous messages about what is appropriate behavior in certain situations and what is expected from employees (Bowen & Ostroff, 2004). The second managerial function of control systems is to coordinate efforts of diverse parts of an organization. Due to the complexity of organizational behavior, coordination is required to avoid employees working at cross-purpose. Control provides such coordination by communicating relevant information to each subunit. A third control system function is to help assure that organizational goals and objectives are achieved while at the same time permitting the decentralization of day-to-day activities. The fourth managerial function is to provide feedback by identifying when performance and behavior deviates from the predetermined path (Flamholtz, 1979).
Although all of the above functions could theoretically steer and direct the behavior of the employees toward effective, innovative behavior, the literature has been divided on whether the use of (formal) MCS promotes innovation.
2.3.2 Management control and innovation
and design of MCS can steer the behavior of employees toward innovation and help to ensure that their ideas are translated into effective innovations.
In the last decade our understanding of MCSs has evolved significantly from systems that imposed standardization and rejected innovation to systems that support organizations in their effort to respond and adapt to the changing environment (Davila, 2005).
The purpose of early forms of MCSs was to guide the organization to the implementation of its goals. This straightforward formulation of the MCS model became known as the “cybernetic” model (Ashby, 1960), in which the sole purpose of the implementation was to minimize deviations from expected performance. Because of its purpose, this cybernetic model of management control reinforces the extrinsic “command and control” relationships found in hierarchical organizations. Consequently, their use in implementing innovation strategies is limited to minor improvements. They are designed with intent to block innovation for the sake of efficiency and to make sure that the organizational processes accomplish the goals they are intended to achieve (Davila, 2005). Or as Goodale, Kuratko, Hornsby, and Covin (2011, p.116) put it, the MCS was “aimed at channeling and often restricting actions.”
Given the characteristics —uniformity and predictability— it is not a surprise that MCSs were traditionally perceived as stifling innovation and change (Amabile, Conti, Croon, Lazenby, & Herron, 1996; Ouchi, 1979). The model was at odds with the need for intense communication inside the organization and with outside parties to nurture existing ideas and to create new ideas (Tushman & O’Reilly, 1997). In support of these ideas, Damanpour (1991) empirically proved that control and formalization is detrimental to innovation.
Simons, 1987). Following these insights, new frameworks have started to show that the capability to innovate depends not only on informal processes, but also on the formal mechanisms that support them (Davila, 2005). In response to the cybernetic model, the idea of “enabling bureaucracy” emerged, which instead of using coercive controls that suppressed variation, supported the learning derived from exploring this variation (Davila, 2005). As such, the organizations are able, through constant interaction between the formalized mechanism and the user, to improve organizational processes and bring innovation into the learning routines (Davila, 2005; Davila & Foster, 2009).
The latter stream of literature identified an additional capability of MCS to facilitate innovation through what was labeled “adaptive routines,” the capacity to adapt to unexpected events (Weick, Sutcliffe, & Obstfeld, 1999). In this respect, “[MCS]…offer organizational members a stable framework to interpret and communicate when facing unexpected events” (Davila, 2005, p. 41).
The literature confirmed the new positive role for MCS in innovation when designed accordingly. As an alternative to the traditional “command and control” view, control systems are theorized to be “flexible and dynamic frames adapting and evolving to the predictable bends of innovation, but stable enough to frame cognitive models, communication patterns and actions” (Davilla, 2005, p. 42). It is believed that MCS can be instrumental to the success of new products and technologies and that they can provide (strategic) direction to the innovative efforts of employees and firms (Marginson, 2002; Morris, Allen, Schindehutte & Avila, 2006).
2.4 Conceptual model and hypotheses
transactional factors, the management control system. To achieve an innovation-oriented organizational climate and culture, it must be supported by a MCS that facilitates creativity and the development of new products and services (Lau & Ngo, 2004).
The conceptual model (Figure 3) builds upon the classification and operationalization of the management control systems of Ford (2005) by means of the three variables: performance review and appraisal, rewards, and outcome monitoring. Altogether, seven hypotheses are developed and tested on how the different management control elements, as classified by Ford, influence the organizational climate for innovation and innovativeness of the organization. The hypotheses are developed and formally stated below.
Figure 3: Conceptual model
2.4.1 Performance review and appraisal
Performance review and appraisal tools are often utilized for guiding employee behavior (Kerr, 1988). Management of the firm can use the performance measures to focus organizational attention, support strategic decision-making, and legitimate actions (Henri, 2006). This study will focus on two important and widely discussed elements of performance review, namely: (1) the time-dimension of performance review and (2) non-financial measures and subjective assessments.
Time-dimension. A comprehensive study of performance measurement is one reported by Hayes and Abernathy (1980). Their study focused on the time-dimension of performance measurement and found that when focusing on traditional (financial) measures of performance, such as monthly/annual profit and return-on-investment (ROI), managers are encouraged to adopt a short-term perspective (Shih & Yong, 2001). This “short-termism” creates an environment in which “No one feels he or she can afford failure or even momentary dip in the bottom line” (Hayes & Abernathy, 1980, p.68). Such an environment is detrimental to innovation, as it is shown that employees can only be encouraged to think creatively and come up with innovative and new ideas if they are not afraid of being criticized and punished. It is further indicated by Brand (1998) that for employees to be creative, they need to be in an environment where top management takes a long-term view and tolerates a few mistakes.
So instead of a fixation on “this month’s sales,” firms should hold a long-term perspective of evaluating managerial performance (Neely, 2005). Similar results were found in earlier studies by Banks and Wheelwright (1979) and Kaplan (1992). The above arguments underlie the following hypothesis:
Hypothesis 1: A long-term perspective in performance review and appraisal is positively associated with an organizational climate supportive of innovation.
Non-financial measures. As financial measures are often hard to apply to determine the value of long-term-oriented managerial actions, such as innovation, quality, or customer satisfaction, it is argued that “Non-financial measures of performance are more useful to help refocus managers on the long-term aspects of their actions” (Hemmer, 1996 p. 87-88; Banker, Potter, & Srinivasan, 2000). Anthony and Govindarajan (1998) suggest that firms with a more innovative strategy and a long-term view rely more on unconventional ways of evaluating managerial performance. For example, they rely more on non-financial measures and a subjective assessment of performance evaluation. Such non-financial measures in performance evaluation include market share, product quality, and customer and employee satisfaction. Ittner, Larcker and Rajan (1997) state that the relative weight placed on non-financial measures is greater in firms following an innovation-oriented strategy than in firms following a cost leader strategy.
measures have also demonstrated to improve communication and openness among organizational members. These two aspects have been proven to be important antecedents for an innovative organizational climate (Lau & Ngo, 2004; Lievens, Moenaert, & S’Jeggers, 1997). Therefore:
Hypothesis 2: Greater weight and importance given to non-financial measures and subjective assessment in performance evaluation is positively associated with an organizational climate supportive of innovation.
2.4.2 Reward system
Reward systems are used to motivate employee behavior to attain positive organizational outcomes. A well-planned reward system can be “an effective tool to reinforce the expected behaviors and to shape the development of the desired climate” (Saleh & Wang, 1993, p. 17). In their exploratory research, Saleh and Wang (1993) found significant differences between innovative and less innovative firms in the way they design and use reward systems. In the more innovative organizational climates, reward systems reward entrepreneurial behavior, such as risk taking, willingness to change, and long-term focus, and encourage openness, sharing of information, and group achievements. Innovative companies put less weight on individual rewards and consider team rewards to be more important.
increase workers’ motivation to exchange information, which in turn enhances creativity and innovation processes (Drake et al., 1999; Chen, Williamson, & Zhou, 2010). However, groups do not always fully capitalize on these opportunities due to obstacles, such as evaluation apprehension (i.e., fear that fellow team members will evaluate their ideas unfavorably) and free riding (Chen et al., 2010).
Nonetheless, several scholars (Chen et al., 2010; Drake et al., 1999; Toubia, 2006) have indicated that by improving collaboration, increasing cohesion, and establishing group identification, group-based rewards will encourage group members to share their ideas, build on each other’s ideas, and coordinate with each other to transform these inputs into creative (group) solutions. In doing so, an environment or organizational climate that is supportive of innovation and creativity is created.
Whereas the use of group-based rewards can lead to greater creativity, a greater focus on tournament or individual incentives can move an organization in the opposite direction. Besides the cost incurred for measuring individual collaborative efforts (which can weigh heavily on smaller organizations that are limited by time and financial resources), the use of individual incentives can lead to internal competition, discouraging group members to cooperate and share ideas. Therefore the established link between (individually focused) rewards systems and organizational climate for innovation leads to the following hypothesis:
Hypothesis 3: An incentive structure focused on individual performance is negatively associated with an organizational climate supportive of innovation.
development of a supportive organizational climate for innovation. They list several factors that many research studies consider important. One of them is: risk taking and tolerance for failure.
In search for an answer on how to promote an environment of innovation and change within groups in organizations, Caldwell and O’Reilly (2003) found that the strongest influence on group innovation come from factors such as support for new ideas and the promotion of subordinate risk taking by supervisors. According to Strathing and Nieboer (2010), the MCS can be used to create a clear understanding among team members of social expectations and behavior that is or ought to be conducted in a particular situation. As such, it can be conducive to creativity, for example, by generating social approval when trying new ways of doing things, by encouraging risk taking, and by tolerating mistakes.
Snow (2002) believes management can actively manage the organizational climate and affect the dimensions in a positive manner. One of the tactics management can use to improve responsibility is to “encourage calculated risk taking” (Snow, 2002, p. 396). This tactic of calculated or “reasoned” risk taking (Bock, Zmud, Kim, & Lee, 2005) is a way to improve the innovative climate and create a context were individuals are more likely to share new and creative ideas with each other. Based on the above, this paper hypothesizes that encouraging risk taking and tolerating mistakes will improve the organizational climate for innovation. This leads to the following hypothesis:
2.4.3 Outcome monitoring
Accounting-based budgetary controls are integral part of the MCS in most organizations and have been researched extensively in management accounting literature. One elements of budgetary control that received much attention is budgetary tightness, “the extent to which budgets imposes strict restrictions on how resources are allocated and how performance is evaluated” (Morris, 2006, p.474). In a tight control philosophy the organization puts much emphasis on meeting the budget and does not easily accept budget revisions during the year (Van der Stede, 2001). However, the literature is still inconclusive with respect to whether tight budgetary controls are good or bad for performance, encourage or discourage creative behavior, and increase or decrease employee’s perception of job pressure (Van der Stede, 2001).
While there seems to be a link between budgetary control and innovative and entrepreneurial climate, there is disagreement among authors on what the link is and why it exists. Especially as it comes to budgetary tightness and its relationship to innovativeness, there are contradictory findings. Fischer (1995) underpins these contradictions, and argues that they are mainly due to a lack of clear definitions and specific operationalizations, which complicate the interpretation and replication of research findings. Below, the two opposing positions on budgetary tightness in the literature are discussed and summarized in Table 4.
objective financial criteria, such as Return on Investment (ROI). If managerial compensation, rewards, and promotions are tied to the achievement of short-term financial outcomes such as ROI, rational managers will take actions to achieve those outcomes. Managers will steer away from proposing risky investments (e.g., R&D) or championing (risky) new ideas, as these actions will put future earnings at risk (Hayes & Abernathy, 1980; Hitt et al., 1996; Hoskisso). Another argument is that financial controls may be partially incompatible with the early stages of a product’s life cycle because at this stage, more flexibility and a long-term view is required (Dent, 1990). Strict controls in the early stages make it difficult for managers to deliver “innovative, customer-responsive, and high-quality products” (Kaplan, 1983, p. 695). Finally, tight budget goals may discourage product-market experimentation, as they poorly adapt to the more uncertain nature of an innovator’s task (Ouchi, 1979). An emphasis on (tight) financial controls thus leads to a lower level of internal innovation (Hayes & Abernathy, 1980; Hitt et al., 1996, Rappaport, 1978).
excess (Dent, 1990). The tighter budgetary controls are in place to restrict these innovation excesses and risk taking initiatives within acceptable limits.
Another reason that innovators have tighter budgetary controls is based on the premise that innovating firms can better predict the financial returns of their investments in R&D. Shih and Young (2001) confirm the finding of Simons (1987) that as “prospector” type firms face lower financial results uncertainty,1 they should have tighter budgetary control than their competitors that face higher financial uncertainty. As Anthony and Govindarajan (1998, p.586) explain, with high financial results certainty, budgets can be used more as a control tool, as in such cases, budget goals depend to a great extent on managerial efforts. Whereas in high financial uncertainty, budgets should be used more as a planning tool, “given that in financial results uncertainty, whether budget goals will be met depends more on “luck”— uncontrollable factors.”
Middle ground. While the two previously discussed streams in the literature argue either
in favor of tight budgetary control or against it (loose controls) as means to support innovation and entrepreneurship, more recently there has been a call for intermediate levels of tightness designed into budgetary controls. To enhance creativity and innovation, budgetary control would seem to require financial discipline; otherwise, significant money is wasted on ill-conceived or inappropriate initiatives. But at the same time, organizations need to be flexible enough to accommodate new opportunities as they emerge (Morris et al., 2006).
1
Table 4: Overview pros and cons budgetary tightness
The concept of “balanced budgetary control” that reflects a middle ground seems most suitable to enhance the innovative organizational climate. Clear direction in budgetary control should specify performance standards and encourage experimentation to stimulate employee initiatives (Morris et al., 2006). However, this flexibility should only be allowed within a defined range to prevent “overzealous experimentation.” As such, this paper predicts that budgetary tightness has an inverted U-shape relationship with the organizational climate for innovation, such that the best organizational climate is reached for medium levels of budgetary tightness:
H5: There is a curvilinear relationship (inverted U-shape) between the degree of budgetary tightness and an organizational climate supportive of innovation, with the highest levels of innovative climate at medium levels of budgetary tightness.
Pros Tight budgetary/financial
control
Cons
(+) Control innovation excess and “overzealous
experimentation” within acceptable limits.
Dent (1990) Hayes & Abernathy (1980)
(-) Leads to short-termism.
(+) Tighter budgetary control more suitable for low financial uncertainty.
Simons (1987), Shih and Young (2001)
Dent (1990) (-) Financial controls may be partially incompatible with early stages of a product’s life cycle.
(+)There is a “threshold of sufficiency.”
Amabile (1998)
Ouchi (1979) (-) May discourage product-market experimentation. (+) Prevent significant money
being wasted on ill-conceived or inappropriate initiatives. Morris et al. (2006) Amabile (1998), Morris and Kuratko, 2002
2.4.4 Climate as intervening variable between MCS and innovativeness
As discussed in section 2.1.3, previous literature (Ekvall, 1983; 1987; 1997; 2002; Isaksen & Akkermans, 2011) has established that a creative organizational climate can differentiate innovative organizations form stagnated ones. This study will try to confirm this relationship in a different setting. Whereas prior studies investigated the influence of the organizational climate on creativity and innovation by means of the number of patents obtained, technical and market originality of products, and success in developing new products and services, this research will focus on the innovativeness of the organization. Using a self-report survey approach this study will be used to reestablish whether the general success in innovation (introduction of new products, services, and processes) and idea generation of the firm is dependent on a climate that supports innovation. Hence, the following hypothesis is proposed:
Hypothesis 6: An organizational climate supportive of innovation is positively associated with the ability of the organization to implement new ideas, products, services and processes.
innovative efforts of employees. However, there is more to the relationship between the MCS elements and innovativeness.
Whereas the above hypotheses were developed along the conventional thinking of direct relationships, the role of climate between the MCS elements and innovative performance deserves more discussion. As stated by Isaksen and Akkermans (2011, p. 166): “Climate is influenced by numerous antecedent factors and can be conceived as an intervening variable that affects organizational and psychological processes that, in turn, affect the overall productivity and well-being of an organization.” Some previous research has examined the intervening nature of the climate for innovation. Lau and Ngo (2004) studied the role that development culture and climate played between elements of the HR system, such as performance-based rewards and innovation outcome of the organization. They followed the procedures suggested by Baron and Kenny (1986) and used both hierarchical regression and path analysis concepts to confirm the mediating role of the development culture between the HR system and new product development. Although this study supported the intervening nature of climate, and while HR system overlaps partly with the MCS, it did not directly address the role of the MCS as a key antecedent variable.
Based on the above, it can beargued that an innovative organizational climate serves as an intervening factor between the MCS and innovativeness. This can be conceptualized as a mediating relationship; organizational climate acts as a partial mediator between all the MCS elements and innovativeness. Taking the above together, the final hypothesis is as follows:
3. METHODOLOGY
This chapter discusses the methods and procedures used in this study to empirically test the hypotheses. This chapter includes the rationale for the methodology and instrumentation, defines how the data has been collected and treated, and outlines the procedures.
3.1 Research design
This study used a multi-method approach by collecting both qualitative and quantitative data to examine the relationship between the MCS, organizational climate and innovativeness. The quantitative data is collected through an online survey and is mainly used to test the hypotheses. The qualitative data, also collected through an online questionnaire, is used as a means to further explain the quantitative results. The findings gained through examining the responses from participants may elaborate, supplement and explain the gained quantitative results. Both Isaksen & Ekvall (2007) and Akkermans (2008) assert that using these two methodologies in harmony will increase the overall strength of the data itself as well as the output.
3.2. Sample and data collection
formal management control mechanisms. According to Flamholtz (1979), smaller organizations are less likely to make use of such control mechanisms.
The second criterion was the suitability of the organizations for this particular study. As the study focusses on both management control and organizational climate, some organizations were more suitable than others. To establish a reliable observation of the organizational climate between four and ten employees per organization needed to complete the SOQ questionnaire. Those same employees needed to be familiar with the MCS; therefore only organizations with a reasonable management layer were suitable for this study. By visiting the corporate websites, the above criteria were checked, and results from the Chamber of Commerce database were filtered.
This resulted in a net sample of 46 subjects spread over seven organizations, which means that the response rate of organizations was 5.4%. From those seven organizations, a total of 57 employees received an invitation to participate in the questionnaire, of which 46 completed both questionnaires (response rate 80.7%).
The organization sizes ranged from a minimum of 75 up to a maximum of 600 employees. In the sample, the seven organizations represented six different industries. The different industries are listed below in Table 5.
Table 5: Industry frequency
Because confidentiality was promised to the participants, the names of the different organizations and employees will not be presented. Instead Table 6 summarizes the participants’ management positions, differentiating between management levels and management functions. A list with all the job titles of the participants is presented in Appendix 2.
Table 6: Management level and positions
3.3 Quantitative part: Instrumentation and measurements
The purpose of this section is to present a description of the measure used in the study to assess dimensions of the MCS, organizational climate and innovativeness.
3.3.1 Organizational climate questionnaire
Although there are a variety of tools used to measure the organizational climate, the Situational Outlook Questionnaire (SOQ), will be the preferred choice of instrument2. The SOQ is a multi-method measure that utilizes both quantitative and qualitative methods to yield powerful results. It assesses the climate and context for change, creativity, and innovation within
2 Work by Hunter et al. (2007) recommended the use of well-developed and well-researched instruments in studies
of climate. While KEYS, TCI, and the SOQ were all identified as meeting these criteria, this study aims to measure organizational climate (SOQ) as opposed to team climate (TCI). Furthermore, as Isaksen and Ekvall’s (2007) scales show evidence of good validity and reliability, this study chooses to use the SOQ to measure the organizational
Management position Middle Top Total
an organization using a nine-dimension model. These dimensions are Challenge and Involvement, Idea-Time, Idea-Support Playfulness and Humor, Conflict, Freedom, Trust and Openness, Debate, and Risk Taking (for a description of the dimensions see Table 7) (Isaksen & Ekvall, 2007). The dimensions of the SOQ have been illustrated to be able to discriminate between best- and worst-case work environments (Isaksen et al, 2001), most and least creative teams (Isaksen et al., 2001), and levels of perceived support for innovation (Isaksen et al, 2001; Isaksen & Akkermans, 2011).
The SOQ is a questionnaire with 53 closed-ended questions on a 4-point Likert scale and three open-ended items. Each of the 53 items corresponds to one of the nine dimensions. To create an individual score, the closed-ended questions are scored by grouping the scores for each item under corresponding dimension (Akkermans, 2008). Averaging the score will result in a personal dimensional score that represents the individual’s perception of the organizational climate.
Table 7: SOQ climate dimensions and inter-reliability
Dimension Definition ۷܀܀
Challenge/ Involvement
The degree to which people are involved in daily operations, long-term goals, and visions. High challenge/involvement implies better levels of engagement, commitment, and motivation.
.95
Freedom The degree of independence shown by the people in the organization. High levels of freedom imply more perceived autonomy and ability for individual discretion.
.92
Trust/Openness The emotional safety in relationships. In high trust/openness situations, people feel more comfortable sharing ideas and being frank and honest with each other.
.84
Idea-time The amount of time people can, and do, use for elaborating new ideas. When idea-time is high, people can explore and develop new ideas that may not have been included in the original task.
.87
Playfulness/ Humor
The spontaneity and ease displayed within the workplace. Good-natured joking and laughter and a relaxed atmosphere (lower stress) are
indicators of higher levels of playfulness and humor.
.91
Conflict The presence of personal and emotional tension (a negative dimension). When conflict is high, people engage in interpersonal warfare, slander, and gossip, and even plot against each other.
.87
Idea-support The way new ideas are treated. In high idea-support situations, ideas and suggestions are received in an attentive and professional manner by bosses, peers, and subordinates. People listen to each other and encourage initiatives.
.89
Debate The occurrence and open disagreement between viewpoints, ideas, experiences, and knowledge. In the debating situation, many different voices and points of view are exchanged and encouraged.
.94
Risk taking The tolerance of uncertainty and ambiguity. In a high risk-taking climate, people can make decisions even when they do not have certainty and all the information desired. People can go out on a limb and take a gamble on some of their new ideas.
.91
3.3.2 Inter-rater reliability SOQ
Since the data for this study was aggregated from a seven organizations, active in different industries, a test of inter-rater reliability (IRR) will be performed to assess the degree to which the organizational climate could be considered a meaningful and shared social-psychological variable (Patterson, Payne, & West, 1996). The reason for doing so is to ensure that the measure consistently taps shared climate perceptions within each climate dimension rather than aggregates of different individual perceptions (Isaksen & Akkermans, 2011).
The IRR was calculated with the formula of James, Demaree, and Wolf (1993) (see Appendix 3) in order to determine if there is sufficient level of agreement among the different respondents. It is generally agreed upon that a r୵ at or above .70 is an indication of support for judgments being sufficiently homogeneous for within-group aggregation. As the r୵ for all nine
dimensions meets the threshold criteria, it can be concluded that the perceptions are sufficiently homogenous for within-group aggregation (Table 7).
3.3.3 Management control & innovativeness questionnaire
The previous subsection described the SOQ in detail and explained the rationale for using this climate measure in this study. This section will explain how this study measured the concept of management control and innovativeness.The MCS and innovativeness constructs were measured with a 7-point Likert scale (see Table 8). The scales were adapted from a series of items used to tap management control practices in previous studies.
Budgetary tightness. An item focused on the ability of managers to revise budgets when they were finalized was used to measure the degree to budgetary tightness used by organizations in their outcome monitoring (Shih & Yong, 2001). Respondents rated the item on a scale that ranged from 1: not at all, to 7: very.
Individual incentives. The focus on individual rewards was measured by a single item based on work of Drake et al. (1999). Respondents expressed their agreement to statements that reflect the extent to which exceptionally well-performing individuals received higher rewards (1: not at all, 7: very much).
Encouraged risk taking. The encouragement of risk taking in the incentive system was measured by a single item scale following Cabrales, Medina, Lavado, and Cabrera (2007). The item asked respondents to rate the degree to which faults or errors made due to risk taking were tolerated within the organization on a 7-point scale (1: not at all, 7: very).
Long-term view. Long-term view of performance review was measured by one item on a 7-point Likert scale (1: not at all, 7 completely), derived from a management control survey of Shih and Yong (2001).
3.4 Qualitative part: Critical incidents approach
The qualitative part of this study consisted of two open‐ended questions using a critical incidents approach:
• Consider a recent situation in which the use or design of a management control system (pay practices, rewards and recognition policies, performance appraisal, budget or financial controls) of the organization really helped you and/or your colleagues move innovation forward. In the space below, please describe the specific system and how it assisted innovation.
• Consider a recent situation in which the use or design of a management control system (pay practices, rewards and recognition policies, performance appraisal, budget or financial controls) of the organization provided a barrier to you and/or your colleagues in moving innovation forward. In the space below, please describe the specific system and how it hindered innovation.
These two open-response formats follow the critical incidents technique (CIT) as introduced by Flanagan (1954) in the human resource management literature. Flanagan (1954) described the critical incidents as stories that reflect especially good or bad performance on a job. The CIT has become a widely used qualitative research method and today is recognized as an effective exploratory and investigative tool (Buterfield, Borgen, Amundson, & Maglio, 2004).
situations, this study uses it in combination with CIT to get insights into which specific elements of the MCS hinder or support the creation of an organizational climate that supports innovation. Analyzing these two open-ended questions will provide additional insight in specific elements of the MCS that affect organizational climate and innovativeness of the organization.
3.5 Construct validity and reliability of quantitative part
Using SmartPLS 2.0 (Ringe, Wende, & Will, 2005) the validity and reliability of the latent constructs was assessed with Partial Least Squares Structural Equation Modeling (PLS) (see Table 8). As the PLS approach is more suitable for small samples, it is the preferred choice over other covariance-based methods such as LISREL and AMOS (De Vries & Broekhuizen, 2012).
Following Fornell and Larcker (1981), this paper estimated the measurement model before examining the structural model relationships. In establishing the measurement model, one item (RISK2) was dropped since it had a low loading (SL<.35), while three others (BUD2, BUD3, BUD4) were dropped because they did not load significantly on their underlying construct.
other studies (e.g., Isaksen & Ekvall, 2007) that proved the reliability and validity of SOQ climate scales, this study did not drop any climate items.
Discriminant validity was assessed by comparing the square roots of the latent constructs’ AVEs to the inter-construct correlations. High correlations between constructs indicate a lack of discriminant power between two constructs. Table 9 indicates that the square root of “innovativeness” AVE exceeds the inter-correlations with the other latent constructs, supporting discriminant validity. As discussed above, the AVE of the climate construct is low, corresponding to an equally low square root of the AVE. However, as none of inter-correlations with organizational climate are high (all below .45), it is fair to assume discriminant validity is supported.
Table 8: Measurement Model Results
Construct and item wording Item SL CR Cα t-value
Budgetary tightness (Shih & Yong, 2001; Morris et al., 2006)
How easy is it to revise budgets once they are finalized? BUD1 n/a
Budgets are set at a level that is difficult (rather than easy) to achieve. BUD2 *
To what extent are budgets regarded as targets that must be met? BUD3 *
To what extent do employees get a certain amount of budget slack to make appropriate autonomous decisions?
BUD4 *
Long-term (Shih & Yong, 2001)
To what extent do annual evaluation of managerial performance stresses short-run measures of performance? (reverse coded)
LONG n/a
Individual incentives (Drake et al., 1999)
To what extent do individuals who perform exceptionally well receive more money than other individuals in the same team/workgroup?
INDIV n/a
Tolerate risk taking (Cabrales et al., 2007)
To what extent are faults and/or errors made due to risk taking tolerated in the organization?
RISK1 n/a
To what extent is there a reward/incentive system in place that encourages risk taking (using new and innovative ideas with the goal of improving performance)?
RISK2 *
To what extent are non-financial measures, such as market share and product development, used to assess performance rather than financial measures, such as reported income?
NONFI n/a
Innovativeness (Akkermans, 2008) .95 .89
How successful is the company in implementing new ideas to obtain results? INNO1 .96 101.48
In general, how successful is the organization in innovation (introduction of new products, services and/or (productions) processes?
INNO2 .95 71.98
Organizational climate (Isaksen & Ekvall, 2007) .80 .74
Challenge/Involvement CHAL .88 27.16 Conflict CONF .36 3.17 Debate DEBAT .48 3.63 Freedom FREE .49 3.83 Idea-support IDEA-S .81 15.50 Idea-time IDEA-T .60 7.55 Playfulness/Humor PLAY .47 3.61
Risk taking RISK-T .65 9.17
Trust TRUST .69 10.48
3.6 Common method variance
Since most researchers agree that common method variance (CMV) (i.e., variance that is attributable to the measurement method rather than to the constructs the measures represent) is a potential bias in behavioral research (Podsakoff, MacKenzie, Lee, & Podsakoff, 2003), common method bias is checked for using several procedures as prescribed by Podsakoff et al., (2003). To begin with, several procedural remedies (temporal, proximal, and methodological) were followed. First, while it was not possible to obtain data from different sources, a remedy was found by separating the measurement of the predictor and criterion variable. This was done by creating both a temporal and a psychological separation between the constructs (the predictor and criterion variable were measured in two separate questionnaires). Second, by placing the performance variables after the predictor variables, the possibility of consistency artifacts was diminished. Furthermore the constructs were methodologically separated by letting the respondents complete them under different response formats (different Likert scales).
Table 9: Mean, standard deviation, and correlations
Variable Mean SD 1a 2 3 4 5 6 7
1. Organizational climate 1683 251 .15
2. Individual incentive 3.80 1.33 .21* n/a
3. Risk taking 4.06 1.56 .45** .16 n/a
4. Long term 3.69 1.55 .27 -.22 .35 n/a
5. Non-financial 3.89 1.61 .22 -.30 .22 .37** n/a
6. Budgetary tightness 4.19 1.51 -.10 .33 -.18 -.15 -.21 n/a
7. Innovativeness 4.14 1.55 .38* .01 .32 .13 .47** -.35** 0.82
Finally, evaluation apprehension and social desirability were reduced by protecting the respondents’ anonymity and assuring them that there is no right or wrong answer and that they should answer questions as honestly as possible.
