Organizational Culture, Innovation, and Competitive Performance: A Multilevel Dynamic Model

We develop a dynamic evolutionary model of innovation culture and its organizational effects at three levels. At the frontline level, informal bottom-up innovation ideas are driven by unplanned interactions governed by cultural norms, as frontline employees sort themselves into idea generator or implementor behaviors. Management cannot directly control innovation interactions and thus culture, but it can imperfectly nudge it by influencing a sharing norm at the second level. At the third level, the culture influences the innovation performance and productivity of the firm and is thus relevant for the organization’s competitiveness. This modeling approach disentangles how top-down strategy interacts with implicit frontline dynamics of cultural evolution, in the context of innovation. Unguided culture does not lead to maximum firm performance. Management guidance may or may not improve performance, and industry competition may select higher-performing cultures, which then spread through the industry under some circumstances. We characterize under which conditions management has a strong influence on culture and performance and under which conditions performance is driven more by forces outside of management’s control. This paper was accepted by Alfonso Gambardella, business strategy. Supplemental Material: The online appendix is available at https://doi.org/10.1287/mnsc.2024.05087 .

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Publication Details

Journal
Management Science
Published
2025-03-06
DOI
https://doi.org/10.1287/mnsc.2024.05087
Citations
5
Primary Topic
Cultural Differences and Values
Type
article
Field-Weighted Citation Impact
9.75
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article

Organizational Culture, Innovation, and Competitive Performance: A Multilevel Dynamic Model

Stylianos Kavadias, Konstantinos Ladas, Christoph H. Loch
5 citations
Management Science
Cultural Differences and Values
9.75
article

Organizational Culture, Innovation, and Competitive Performance: A Multilevel Dynamic Model

Stylianos Kavadias, Konstantinos Ladas, Christoph H. Loch
article en
5 citations

Abstract

We develop a dynamic evolutionary model of innovation culture and its organizational effects at three levels. At the frontline level, informal bottom-up innovation ideas are driven by unplanned interactions governed by cultural norms, as frontline employees sort themselves into idea generator or implementor behaviors. Management cannot directly control innovation interactions and thus culture, but it can imperfectly nudge it by influencing a sharing norm at the second level. At the third level, the culture influences the innovation performance and productivity of the firm and is thus relevant for the organization’s competitiveness. This modeling approach disentangles how top-down strategy interacts with implicit frontline dynamics of cultural evolution, in the context of innovation. Unguided culture does not lead to maximum firm performance. Management guidance may or may not improve performance, and industry competition may select higher-performing cultures, which then spread through the industry under some circumstances. We characterize under which conditions management has a strong influence on culture and performance and under which conditions performance is driven more by forces outside of management’s control. This paper was accepted by Alfonso Gambardella, business strategy. Supplemental Material: The online appendix is available at https://doi.org/10.1287/mnsc.2024.05087 .

Management ScienceVol. 71(11)
Peking University (CN), University of Cambridge (GB), IESE Business School (ES), Universidad de Navarra (ES)
Openalex Percentile: Top 2%
Cultural Differences and Values
9.75
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Organizational Culture, Innovation, and Competitive Performance: A Multilevel Dynamic Model — Stylianos Kavadias, Konstantinos Ladas, et al. · Management Science (2025) | TGRS Research Map | TGRS