Definition of group and group members’ innovation
In the business world, innovation is defined as new products, services, or work processes that help a firm gain a competitive advantage (Schilling, 2008). Creative theorists (e.g., Amabile, 1999; Amabile, Conti, Coon, Lazenby, & Herron, 1996) defined innovation as the successful implementation of creative ideas within an organization. Based on this definition, we define group innovation as the new and useful products and procedures that the group successfully implements. Similarly, group members’ innovation refers to the successful exploitation of new and useful ideas of the individual within a group. According to Cumming and Oldham (1997), when employees generate novel and useful products or procedures, they are essentially providing the firm with options. Employee innovations enable a firm to choose from a broader array of products or procedures for development and later implementation. This variety provides the firm with flexibility with which it can respond to external demands and opportunities. Thus, employee innovations can be the inputs for a firm to innovate. Based on this argument, if the group considers their members’ innovation as incomplete implementation of creative ideas, members’ innovation will be the inputs for further innovation of the group. On the other hand, if group members’ innovation is considered as complete implementation, it may become an innovation of the group.
However, group and group members’ innovation does not arise from any one source, but rather from linkages between multiple sources (Schilling, 2008). These sources of innovation can be divided into two: those at the individual level and those at the group level. At the individual level, several authors suggest that individual creativity (Heye, 2006; Schilling, 2008) and self-leadership (DiLiello & Houghton, 2006) are important antecedents of innovation. Knowledge management (Aulawi et al., 2009; Muhammed et al., 2008) and culture (Janssen et al., 2004) are the antecedents at the group level. In addition, previous conceptual papers also suggest that organizational culture may substantially influence individual creativity and self-leadership (D’Intino et al., 2007; Manz & Sims, 1989). In the next sections, we will present the links between these factors and the innovation of group members.
Effects of creativity and self-leadership on innovation among group members
While innovation is the successful implementation of novel ideas, creativity is defined as the ability to produce novel, potentially useful ideas about firms’ products, practices, services, or procedures (Shalley & Gilson, 2004). In this study, creativity refers to group members’ ability to produce ideas that are useful and novel for their group. Given this definition, novelty is not considered an absolute term (novel versus not novel) but rather a continuum, with ideas possessing different degrees of novelty, from somewhat new and incremental to radically new and original (Madjar, 2005). Organizational creative theorists (e.g., Scott, 1995; West, 1990) have argued that individual’s creativity is important in itself and can be conceptualized as a necessary first step or precondition required for innovation. A member with high ability to generate new and useful ideas is more likely to create their own innovation, which in turn contributes to group innovation (Woodman et al., 1993). Underlying this theoretical view, ability in generating new and useful ideas increases the likelihood of producing innovation. Hence, we expect creative group member to produce novel products or work processes. Therefore, we test the following hypothesis:
Creativity positively affects group members’ innovation.
Anderson et al. (2004) stated that creativity alone is insufficient for developing an innovation. Also, individuals must have a certain level of internal force that pushes them to persevere in the face of challenges in creative work (Shalley & Gilson, 2004). A previous case study in Thailand has shown that community product producers with a high level of ambition, self-determination, ability to work under pressure, and at the same time be optimistic to respond positively to any challenge are more likely to be successful innovative entrepreneurs (Thanathikom, 2005). The characteristics expressed above are consistent with the self-leadership construct.
According to Pearce and Manz (2005), self-leadership is essential in those organizations that need continuous innovation. Self-leadership is defined as the process of influencing or leading oneself through the use of specific sets of behavioral and cognitive strategies (Manz & Neck, 2004). Behavioral strategies include encouraging the positive, desirable behaviors that lead to successful outcomes, while suppressing the negative, undesirable behaviors that lead to an unsuccessful outcome (Neck & Houghton, 2006). Cognitive strategies include creating feelings of self-determination and formation of constructive thoughts such as positive self-talk (Neck & Houghton, 2006). In this study, we define self-leadership as a group member’s ability to lead themselves through the use of behavioral and cognitive strategies.
Self-leadership theorists (e.g., DiLiello & Houghton, 2006; Houghton & Yoho, 2005; Neck & Houghton, 2006) have suggested that creativity and innovation are the predictable outcomes of individual self-leadership. However, research on the relationship between self-leadership, creativity, and innovation is still at the nascent stage. As Neck and Houghton (2006) pointed out, additional research is needed to further clarify the relationship between self-leadership, creativity, and innovation.
Carmeli et al.’s (2006) research found that the self-leadership skill is an antecedent that positively affects innovative behavior. They argued that individual’s self-leadership is necessary for the innovation process because innovation in the workplace is a complex process that often entails difficulties, obstacles, and frustration. Not only does the creative individual face a demanding situation in which substantial efforts are required to complete all stages of the innovation process, she or he may also face resistance regarding their efforts and action. This is because people tend to embrace stability and resist insecurity and uncertainty. Hence, given self-leadership’s conceptualization as a determinant of innovation, we expect self-leadership to directly affect innovation of group members. Thus:
Self-leadership positively affects group members’ innovation.
Besides self-leadership being a direct influence on innovation, it may also indirectly influence innovation through creativity. According to Houghton and Yoho (2005), self-leadership may mediate the impact of an organization’s leadership approach on the creativity of their members. Pearce and Manz (2005) argued that when employees are encouraged to lead themselves in defining problems, making decision, solving problems, and identifying opportunities and challenges both now and in the future, their creativity is encouraged. In contrast, if employees are left to focus on implementing what they are directed to do, then creativity is not encouraged. In addition, Manz and Neck (2004) stated that individuals who have high levels of self-leadership seem likely to evaluate existing standards, and have the ability to set or modify them, thereby fostering creativity and innovation. DiLiello and Houghton’s (2008) study supported the theoretical views above. They found that self-leadership significantly and directly affects practiced innovation through creative potential. They concluded that self-leadership is a primary factor for facilitating creativity at all organization levels. Thus, we also expected self-leadership to affect innovation of group members through creativity:
Self-leadership positively affects group members’ innovation through creativity.
Creativity mediates the relationship between group culture and group members’ innovation
Somewhat surprisingly, although many authors (e.g., Caldwell & O’Reilly, 2003; McLean, 2005) have indicated that group culture influences individual creativity as an important resource for innovation, there has been relatively little empirical examination on the mediator role of creativity. Group culture is defined as the way in which members in a group are expected to think and behave in relation both to their tasks and to other people (Cooke & Rousseau, 1988). Caldwell and O’Reilly (2003) stated that group culture might enhance innovation in groups through norm. According to O’Reilly and Caldwell (1985) and Caldwell and O’Reilly (2003), norms provide social information that individuals use to understand and interpret what they experience at work, including such broad things as the perceived significance of the work. Norms that exist in a group not only shape specific behavior, but also influence much more general type of activities in which a group member engages. Evidence suggests that the group culture that values innovation, active risk taking, and open debate might motivate and direct group members toward creative ideas, which in turn increases the likelihood of an innovation being generated (Hurley, 1995; Tesluk, Farr, & Klein, 1997). According to this study, the values and norms mentioned above that are shared by a group members are defined as constructive culture. A number of authors hold the view that the constructive culture of an organization can be seen as a critical facilitator of individual innovation (Ahmed, 1998; Mumford, 2000; Mumford & Simonton, 1997). In contrast, the Thai cultural context is a low constructive culture. As Aeimtitiwat (2006) found, top management in Thai firms may have no willingness to take risks from too many solutions. Multiple approaches that may lead to increasing cost, workforce, and time are undesirable for Thai firms. Moreover, failure of projects may be considered as a mistake in Thai enterprises. Thus, in the community products business, there is the possibility that a groups’ constructive culture affects group members’ innovation. From these theoretical views and evidence, we predict that the degree by which group members perceive the group culture as supportive of risk taking, learning by trial and error, and open communication based on trust would encourage group member’s creativity thereby fostering innovation.
Groups’ constructive culture positively affects group members’ innovation through creativity.
Self-leadership mediates the relationship between group culture and group members’ innovation
Although self-leadership theorists have stated that contextual factors can be encouraged or inhibit self-leadership (Houghton & Yoho, 2005; Manz, 1986; Pearce & Manz, 2005), there has been little effort to study the effect of organizational culture on self-leadership. Manz (1986) has stated that individual’s self-leadership is amenable to change rather than a fixed trait. Similarly, Pearce and Manz (2005) also suggest that individual self-leadership can be effectively encouraged through organizational reward and training. Based on self-leadership theory evolution, intrinsic motivation is a central part of self-leadership’s conceptualization of natural rewards (Manz & Neck, 2004). The intrinsic motivation can be increased depending on contextual conditions (Shalley, Zhou & Oldham, 2004). Hence, there is the possibility that constructive culture support of risk taking and learning by trial and error would positively affect the degree of intrinsic motivation of the individual and increase self-leadership, which in turn would foster individual innovation. In contrast, Thai entrepreneurs have a great deal of structuring of organizational activities, more written rules, less risk taking, which in turn contributes to a decrease in the ambitions of employees (Aeimtitiwat, 2006). To test this possibility, we conduct an exploratory analysis of the mediating effect of self-leadership on the relationship between a group’s constructive culture and group members’ innovation. Thus:
Groups’ constructive culture positively affects group members’ innovation through self-leadership.
Amabile (2000) and Miron, Erez, and Naveh (2004) argued that high congruence between a creative person and culture results in high level of innovative performance. According to Caldwell and O’Reilly (2003), when groups develop the norm that risk taking is both accepted and encouraged and that mistakes are expected when trying new things, creative individuals are likely to be willing to propose new and creative solutions to problems. This argument is supported by Miron et al.’s (2004) study which found that creative employees who worked in an innovative culture (high autonomy, risk taking, tolerance of mistakes) reached higher levels of innovative performance than creative employees in a low innovative culture. In a Thai context, previous evidence suggested that the innovation of Thai employees may be impeded because of the culturally low acceptance of failure (Wongtada & Rice, 2008) and moderately high uncertainty avoidance (Pornpitakpan, 2000). Thais tend to be concerned with security in life (as opposed to willing to take risks) and believe in experts and their knowledge (as opposed to generalists and common sense) (Pornpitakpan, 2000). Based on the argument above, group constructive culture may act as moderator, which can explain the variation in the relationship between group members’ creativity and innovation. Namely, when the level of a group’s constructive culture is low, it may lead to a decrease in the perceived opportunity of a member’s creativity, and subsequently the relationship between the two is likely to be weaker than when the group culture is perceived as supportive of creativity and innovation. To test this possibility, we conduct an exploratory analysis of the moderating effect of group’s constructive culture on the links between group member’s creativity and innovation. Thus:
Groups’ constructive culture moderates the relationships between group members’ creativity and innovation.
According to Mannheim and Halamish (2008), aspects of group culture often moderate the influences of leadership styles. Similarly, Alves, Lovelace, Manz, Matsypura, Toyasaki, and Ke (2006) and D’Intino et al. (2007) have claimed that cultural differences represent important concepts that may affect self-leadership. For example, people in high uncertainty avoidance cultures are more likely to lead themselves in the context of formal plans and rules, while people in low uncertainty avoidance cultures may be more innovative and flexible in their self-leadership. Because of this, organizations with high uncertainty avoidance tend to be more controlling and less approachable (Dickson, Den Hartog, & Mitchelson, 2003). In contrast, organizations with low uncertainty avoidance cultures value more flexibility, innovation, and job mobility (Dickson et al., 2003). In Pornpitakpan’s (2000) study, not only do the Thais appear as having a high uncertainty avoidance culture, they also are moderately collectivistic, in turn this contributes to a weak individual independence, and reliance on the group is expected. Therefore, in this study we propose that constructive culture in the group may play the role of moderator in the relationship between group members’ self-leadership and innovation. Yet, few studies have actually tested whether organizational culture empirically moderates self-leadership and individual innovation (DiLiello & Houghton, 2008), especially in the Asia Pacific region. To test this possibility, we conduct an exploratory analysis of the moderating effect of constructive culture on the self-leadership-innovation link:
Groups’ constructive culture moderates the relationships between individual self-leadership and innovation.
Effect of group knowledge management on group members’ innovation
Beckman (1999) defined knowledge management as the formal process that concerns access to experience, knowledge, and expertise that creates new capabilities, enables superior performance, encourages innovation, and enhances customer value. To the countries in the Asia Pacific, Peng (2002) and Peng et al. (2008) argued that institution-based knowledge management is the key process that is needed for building differentiated competitive advantage in international business. In this study, we treat the local wisdom as institution-based knowledge. Because Thai local wisdom, such as the knowledge of how to weave silk cloth, to mold pottery, and to carve, is the tacit knowledge that has been passed on from generation to generation. It is an identity and validity for producer groups in Thailand. We define knowledge management as the practice that involves groups’ acquiring, capturing, sharing, and using local wisdom and knowledge to enhance their performance and innovation. According to Du Plessis (2007), knowledge management plays an invaluable role in the process of innovation in many ways. First, it provides a focus in the organization on the value of tacit knowledge and assists in creating the environment for tacit knowledge creation, sharing, and leverage to take place. Second, it assists in converting tacit knowledge to explicit knowledge (e.g., handbook and database). Third, it facilitates collaboration in the innovation process. Fourth, it assists in identifying gaps in the knowledge base and provides processes to fill the gaps in order to aid innovation.
At the individual level, only Muhammed et al.’s (2008) study has shown that organizational knowledge management will help increase an individual’s understanding of the people (know-who), locations (know-where), and timing (know-when) aspects necessary to complete the task, which in turn affects individual innovation. They argued that knowing who the stakeholders are and understanding their needs and expectations can positively contribute to making the outcomes novel and interesting for them. Knowing where he/she can get appropriate resources to accomplish the task, and knowing when to use such information and take appropriate actions can help the individual ease the task of performing those creative actions. In addition, organizational knowledge management is a contextual factor that enables or deters behavior related to how individuals manage their knowledge (e.g., creation, sharing, and application) (Muhammed et al., 2008). An outcome of managing knowledge effectively at the individual level is to have the right knowledge at the right time, so that appropriate values can be added, and workers can enact creative actions (Muhammed et al., 2008). Thus, we expect groups’ knowledge management to positively affect group members’ innovation:
Groups’ knowledge management positively affects group members’ innovation.
Most existing literature suggests that organizational knowledge management influences individual creativity, rather than affects directly on individual innovation. As Mumford (2000) argued, in the knowledge management process, an individual will receive new information and get to share a product idea or a way of doing things with other persons. This will help increase comprehension and further improve the new ideas of the individual. Similarly, several authors argued that firms’ knowledge management could affect their members’ creativity by: (1) increasing individuals’ quantity and quality of information (Roffe, 1999), and (2) stimulating individuals to think critically and creatively (Lindsey, 2006) and possibly dealing directly with cognitive biases (Houghton, Simon, Aquino, & Goldberg, 2000). In addition, previous studies have shown that knowledge sharing positively affects individual creativity (Teigland & Wasko, 2003) and constructive controversy among team members can facilitate risk taking that, in turn, promotes innovation (Tjosvold & Yu, 2007). Based on the argument and results above, creativity may act as mediator in the linkage of groups’ knowledge management and group members’ innovation. Thus:
Groups’ knowledge management positively affects group members’ innovation through creativity.