The Role of Psychological Contract in Supporting Innovation Activity

Abstract

The article by Dr. Wolf discusses of the changing role of planning and control and risk taking as sources for innovation in the increasing capital orientation of many companies. Based on the earlier research they both are needed in the innovation process; there is a need for uncertainty and risk taking as sources for new ideas and innovation, while planning and control are required for handling and embracing uncertainty and making the innovation realized. In the zone of innovation there is a continuous search for balance of planning and control and chaos (figure 1). At the one extreme, planning and control and the low diversity of knowledge does not encourage learning and innovation. Overembeddedness of similar knowledge reduces the flow of novel information because redundant ties to the same type of knowledge mean that there are fewer links to partners who can potentially contribute to innovative ideas.