The effect of organizational support for creativity on innovation and market performance: the moderating role of market dynamism

Abstract

PurposeRecent technological and social changes have challenged manufacturing firms to remain competitive in increasingly dynamic markets. A way of facing these challenges is to foster organizational structures that encourage creativity. Although the general importance of organizational creativity for market success is undeniable, few studies on manufacturing firms have provided a nuanced view of how this relationship is affected by firm-external factors (e.g. different levels of market dynamism) and whether and how this leads to greater market success.Design/methodology/approachThis research uses survey data from 255 chief executive officers (CEOs) and top managers of manufacturing firms in Germany. The authors performed different regression analyses to test for direct, mediation, moderation and moderated mediation effects.FindingsThe findings show that, in highly dynamic markets, organizational support for creativity indeed helps manufacturing firms to remain competitive by positively influencing firms' innovation performance, which subsequently results in improved market performance. By contrast, in markets with low dynamism, organizational support for creativity has no impact on firms' innovation and market performance.Research limitations/implicationsFrom a theoretical perspective, this study introduces market dynamism as a novel, so-far underexplored firm-external factor that moderates the relationship between organizational support for creativity and innovation and market performance. This research thus enhances the understanding of the dynamics of organizational creativity and its effects on innovation and market performance in an organizational context of manufacturing firms.Practical implicationsIn general, this research emphasizes the importance of establishing a creativity-supporting environment to enhance innovation and market performance. Most importantly, this relationship depends on whether firms are active in highly dynamic or stable markets. Managers should thus consider the level of (future) market dynamism when making decisions about creativity-supporting work environments.Originality/valueThis research provides novel insights into how organizational support for creativity influences innovation and market performance in the manufacturing industry and introduces market dynamism as an important moderating factor.

Internal corporate social responsibility in times of uncertainty: does working from home harm the creativity link?

“…Employees are, therefore, characterized as creative when they identify problems, find solutions or ideas, evaluate these and, subsequently, implement them (Carmeli et al, 2013). As employee creativity is one of the most relevant determinants of an organization's long-term performance (Munir and Beh, 2019;Baccarella et al, 2021;Taleb et al, 2023), investigating the relationship between creativity and ICSR seems a worthwhile endeavor. Brammer et al (2015) investigated the effect of external CSR actions on employees' individual creativity in the Spanish telecommunications industry.…”

“…Specifically, exploiting humans’ creative potential (i.e. their ability to provide novel and useful ideas) has become an ongoing endeavor to find success through innovation (Gong et al , 2013; Baccarella et al , 2021).…”

Work from anywhere and employee psychological well-being: moderating role of HR leadership support

“…Firms can gain competitive advantage if they build, integrate and reconfigure the internal as well as external resources and abilities to addressing these market conditions (Fu et al. , 2015; Baccarella et al. , 2021).…”

“…From this perspective, the firms need to develop HR abilities so firms can reconfigure and transform their HR system and practices to fit with the new dynamic work requirements (Khatri et al, 2017). Firms can gain competitive advantage if they build, integrate and reconfigure the internal as well as external resources and abilities to addressing these market conditions (Fu et al, 2015;Baccarella et al, 2021). This concept is in consonance with DCV theory (Teece et al, 1997), which is defined as "a high-level routine (or collection of routines) that, together with its implementing input flows, confers upon an organization's management a set of decision options for providing significant outputs of a particular type" (Winter, 2003, p. 991).…”

Guest editorial: Creativity management and manufacturing firms' performance

“…different levels of market dynamism) and whether and how this leads to greater market success. The article The Effect of Organizational Support for Creativity on Innovation and Market Performance: The Moderating Role of Market Dynamism, by Baccarella et al (2021), addresses this research gap by providing a deeper understanding of the role of organizational support for creativity in driving strong market performance in highly dynamic markets. The overall aim of this research was to examine whether and how organizational support for creativity helps manufacturing firms remain competitive in environments with different levels of market dynamism.…”