Inside the Box - Cultures of Innovation in a Mature Industry

Abstract: Innovation has been regarded a crucial means by which organizations adapt to the changes in the environment. Previous studies have identified organizational culture as a key factor that influences innovation, suggesting that a culture with certain characteristics can lead to superior innovation performance. This culture is referred to as “innovation culture”, a notion which has recently enjoyed great popularity and drawn considerable attention from researchers and practitioners. However, seeing the concept of innovation culture as self-explanatory and therefore taking it as given, the existing literature assumes a static causal relationship between culture and innovation, whereas it has not provided explanation of how culture influences innovation. By means of a case study at three different subsidiaries of a Swedish multinational company in the corrugated packaging industry, this thesis aims to extend our understanding of the culture-innovation relationship by answering the question: “How does organizational culture influence innovation?”. Based on culture dynamics theory and organizational adaptation theory, this thesis proposes a dynamic and interactive view on the culture-innovation relationship. Using organizational archetype theory as a theoretical lens, it suggests the notion of “innovation dynamics” to illustrate how culture shapes organizations’ innovation processes into different patterns and reveals the underlying dynamic interaction between culture and innovation activities. Moreover, by drawing attention to different functional subcultures and the dynamic interaction between them, this thesis highlights the role of subcultures in organizations’ innovation processes. The findings depict a spiral model of the culture-innovation relationship in which culture and innovation mutually influence each other and alternate between cause and effect. They also suggest that instead of a single unitary innovation culture, there are cultures of innovation within an organization. This thesis contributes to the innovation culture and the innovation management literature and theory of organizational archetypes. By offering a nuanced understanding of the role of culture in innovation, it also provides managerial implications for practitioners in the field of innovation management.