When R&D spending is not enough: The critical role of culture when you really want to innovate

Human Resource Management

Volumn 49, Issue 4, 2010, Pages 767-792

  Wang, Sheng ^a   Guidice, Rebecca M ^a   Tansky, Judith W ^b   Wang, Zhong Ming ^c  

^a UNIVERSITY OF NEVADA   (United States)

^b OHIO STATE UNIVERSITY   (United States)

^c ZHEJIANG UNIVERSITY   (China)

Author keywords

China; Innovation; Organizational culture

Indexed keywords

EID: 78649492671     PISSN: 00904848     EISSN: 1099050X     Source Type: Journal    
DOI: 10.1002/hrm.20365     Document Type: Article

References (141)

1. Ahuja, G., & Katila, R. (2004). Where do resources come from?. The role of idiosyncratic situations. Strategic Management Journal, 25(8/9), 887-907.
2. Altenburg, T., Schmitz, H., & Stamm, A. (2008). Breakthrough? China's and India's transition from production to innovation. World Development, 36(2), 325-344.
3. Amabile, T. M. (1988). A model of creativity and innovation in organizations. Research in Organizational Behavior, 10, 123-167.
4. Amabile, T. M., Conti, R., Coon, H., Lazenby, J., & Herron, M. (1996). Assessing the work environment for creativity. Academy of Management Journal, 39(5), 1154-1184.
5. Armstrong, J. S., & Overton, T. S. (1977). Estimating nonresponse bias in mail surveys. Journal of Marketing Research 3), 396-402.
6. Baer, M., & Frese, M. (2003). Innovation is not enough: Climates for initiative and psychological safety, process innovations, and firm performance. Journal of Organizational Behavior, 24(1), 45-68.
7. Bantel, K. A., & Jackson, S. W. (1989). Top management and innovation in banking: Does the composition of the top management team make a difference? Strategic Management Journal, 10(S1), 107-124.
8. Barney, J. B. (1986). Organizational culture: Can it be a source of sustained competitive advantage? Academy of Management Review, 11(3), 656-665.
9. Barney, J. B., & Wright, P. M. (1998). On becoming a strategic partner: The role of human resources in gaining competitive advantage. Human Resource Management, 37(1), 31-46.
10. Bliese P. D. (2000). Within-group agreement, non-independence, and reliability: Implications for data aggregation and analysis. In K. K. Klein & S. J. Kozlowski (Eds.), Multilevel theory, research, and methods in organizations: Foundations, extensions, and new directions, (pp. 349-381). San Francisco: Jossey-Bass.
11. Board, C. (2008). CEOs' top 10 challenges overall. HRMagazine, 53(1), 10.
12. Boulding, W., & Staelin, R. (1995). Identifying generalizable effects of strategic actions on firm performance: The case of demand-side returns to R&D spending. Marketing Science, 14(3), G222-G236.
13. Brandt, S. C. (1985). Entrepreneuring in established companies. Homewood, IL: Dow Jones/Irwin.
14. Brazeal, D. V. (1993). Organizing for internally developed corporate ventures. Journal of Business Venturing, 8(1), 75-90.
15. Brislin, R. W. (1980). Translation and content analysis of oral and written material. In H. C. Triandis, & J. W. Berry (Eds.), Handbook of cross-cultural psychology (Vol. 2, pp. 349-444). Boston: Allyn & Bacon.
16. Cable, D. M., & Judge, T. A. (1996). Person-organization fit, job choice decisions, and organizational entry. Organizational Behavior and Human Decision Processes, 67(3), 294-311.
17. Chandler, G. N., Keller, C., & Lyon, D. W. (2000). Unraveling the determinants and consequences of an innovation-supportive organizational culture. Entrepreneurship: Theory & Practice, 25(1), 59-76.
18. Chatman, J. A. (1991). Matching people and organizations: Selection and socialization in public accounting firms. Administrative Science Quarterly, 36(3), 459-484.
19. Child, J., Yuan, L., & Tsai, T. (2007). Institutional entrepreneurship in building an environmental protection system for the People's Republic of China. Organization Studies, 28(7), 1013-1034.
20. Cohen, J., Cohen, P., West, S. G., & Aiken, L. S. (2003). Applied multiple regression/correlation analysis for the behavioral sciences (3rd ed.). Mahwah, NJ: Lawrence Erlbaum Associates.
21. Covin, J. G., & Miles, M. P. (1999). Corporate entrepreneurship and the pursuit of competitive advantage. Entrepreneurship: Theory & Practice, 23(3), 47-63.
22. Covin, J. G., & Slevin, D. P. (1991). A conceptual model of entrepreneurship as firm behavior. Entrepreneurship: Theory & Practice, 16(1), 7-25.
23. Damanpour, F. (1991). Organizational innovation: A meta-analysis of effects of determinants and moderators. Academy of Management Journal, 34(3), 555-590.
24. Damanpour, F., & Schneider, M. (2006). Phases of the adoption of innovation in organizations: Effects of environment, organization and top managers. British Journal of Management, 17(3), 215-236.
25. de Brentani, U., & Kleinschmidt, E. J. (2004). Corporate culture and commitment: Impact on performance of international new product development programs. Journal of Product Innovation Management, 21(5), 309-333.
26. De Dreu, C. K. W., & West, M. A. (2001). Minority dissent and team innovation: The importance of participation in decision making. Journal of Applied Psychology, 86(6), 1191-1201.
27. Dess, G. G., Lumpkin, G. T., & McGee, J. E. (1999). Linking corporate entrepreneurship to strategy, structure, and process: Suggested research directions. Entrepreneurship: Theory & Practice, 23(3), 85-102.
28. Dobson, W., & Safarian, A. E. (2008). The transition from imitation to innovation: An enquiry into China's evolving institutions and firm capabilities. Journal of Asian Economics, 19(4), 301-311.
29. Dougherty, D. (1999). Organizing for innovation. In S. R. Clegg, C. Hardy, & W. R. Nord (Eds.), Managing organizations: Current issues (pp. 174-189). Thousand Oaks, CA: Sage.
30. Drucker, P. (1985). Innovation and entrepreneurship. New York: Harper & Row.
31. Fiol, C. M. (1995). Thought worlds colliding: The role of contradiction in corporate innovation processes. Entrepreneurship: Theory & Practice, 19(3), 71-90.
32. Fitzgerald, C. A., Flood, P. C., O'Regan, P., & Ramamoorthy, N. (2008). Governance structures and innovation in the Irish software industry. Journal of High Technology Management Research, 19(1), 36-44.
33. Freel, M. S. (2005). Perceived environmental uncertainty and innovation in small firms. Small Business Economics, 25(1), 49-64.
34. Freeman, J., & Engel, J. S. (2007). Models of innovation: Startups and mature corporations. California Management Review, 50(1), 94-119.
35. Fritz-Enz, J. (2000). The ROI human capital: Measuring the economic value of employee performance. New York: American Management Association.
36. Garnier, J.-P. (2008). Rebuilding the R&D engine in big pharma. Harvard Business Review, 86(5), 68-76.
37. Gelfand, M. J., Bhawuk, D. P. S., Nishii, L. H., & Bechtold, D. J. (2004). Individualism and collectivism. In R. J. House, P. J. Hanges, M. Javidan, P. W. Dorfman, & V. Gupta (Eds.), Culture, leadership, and organizations: The GLOBE study of 62 societies (pp. 437-512). Thousand Oaks, CA: Sage.
38. George, J. M., & Bettenhausen, K. (1990). Understanding prosocial behavior, sales performance, and turnover: A group-level analysis in a service context. Journal of Applied Psychology, 75(6), 698-709.
39. Glick, W. H. (1985). Conceptualizing and measuring organizational and psychological climate: Pitfalls in multilevel research. Academy of Management Review, 10(3), 601-616.
40. Gorsuch, R. L. (1983). Factor analysis. Hillsdale, NJ: Lawrence Erlbaum Associates.
41. Greve, H. R. (2003). A behavioral theory of R&D expenditures and innovations: Evidence from shipbuilding. Academy of Management Journal, 46(6), 685-702.
42. Gudmundson, D., Tower, C. B., & Hartman, E. A. (2003). Innovation in small businesses: Culture and ownership structure do matter. Journal of Developmental Entrepreneurship, 8(1), 1-17.
43. Hauser, J., Tellis, G. J., & Griffin, A. (2006). Research on innovation and new products: A review and agenda for marketing science. Marketing Science, 25(6), 687-717.
44. He, Z.-L., & Wong, P.-K. (2004). Exploration vs. exploitation: An empirical test of the ambidexterity hypothesis. Organization Science. A Journal of the Institute of Management Sciences, 15(4), 481-494.
45. Hidalgo, A., & Albors, J. (2008). Innovation management techniques and tools: A review from theory and practice. R&D Management, 38(2), 113-127.
46. Hitt, M. A., Hoskisson, R. E., Johnson, R. A., & Moesel, D. D. (1996). The market for corporate control and firm innovation. Academy of Management Journal, 39(5), 1084-1119.
47. Hofstede, G. (1980). Culture's consequences: International differences in work-related values. Beverly Hills, CA: Sage.
48. Hornsby, J. S., Kuratko, D. F., & Zahra, S. A. (2002). Middle managers' perception of the internal environment for corporate entrepreneurship: Assessing a measurement scale. Journal of Business Venturing, 17(3), 253-273.
49. Huang, Y. (2003). Selling China: Foreign investment during the reform era. New York: Cambridge University Press.
50. Huber, G. P., Sutcliffe, K. M., Miller, C. C., & Glick, W. M. (1993). Understanding and predicting organizational change. In G. P. Huber, & W. H. Glick (Eds.), Organizational change and redesign (pp. 215-265). New York: Oxford University Press.
51. Hurley, R. F., & Hult, G. T. M. (1998). Innovation, market orientation, and organizational learning: An integration and empirical examination. Journal of Marketing, 62(3), 42-54.
52. IBM Global Business Services. (2006). Expanding the innovation horizon: The global CEO study 2006. Retrieved January 16, 2010, from
53. Ireland, R. D., Kuratko, D. F., & Morris, M. H. (2006). A health audit for corporate entrepreneurship: Innovation at all levels: Part I. Journal of Business Strategy, 27(2), 10-17.
54. Ireland, R. D., & Webb, J. (2007). A cross-disciplinary exploration of entrepreneurship research. Journal of Management, 33(6), 891-927.
55. James, L. R. (1982). Aggregation bias in estimates of perceptual agreement. Journal of Applied Psychology, 67(2), 219-229.
56. wg: An assessment of within-group interrater agreement. Journal of Applied Psychology, 78(2), 306-309.
57. Jaruzelski, B., & Dehoff, K. (2009). Profits down, spending steady: The global innovation 1000. Strategy & Business, 57, 1-14.
58. Jassawalla, A. R., & Sashittal, H. C. (2002). Cultures that support product-innovation processes. Academy of Management Executive, 16(3), 42-54.
59. Jefferson, G. H., Bai, H., Guan, X., & Yu, X. (2006). R&D performance in Chinese industry. Economics of Innovation & New Technology, 15(4/5), 345-366.
60. Johnson, D. (2001). What is innovation and entrepreneurship? Lessons for larger organisations. Industrial & Commercial Training, 33(4), 135-140.
61. Judge, T. A., & Cable, D. M. (1997). Applicant personality, organizational culture, and organization attraction. Personnel Psychology, 50(2), 359-394.
62. Kanter, R. M. (1982). The middle manager as innovator. Harvard Business Review, 60(4), 95-106.
63. Kanter, R. M. (1985). Supporting innovation and venture development in established companies. Journal of Business Venturing, 1(1), 47-60.
64. Kanter, R. M. (2000). A culture of innovation. Executive Excellence, 17(8), 10-11.
65. Katila, R. (2002). New product search over time: Past ideas in their prime? Academy of Management Journal, 45(5), 995-1010.
66. Katila, R., & Ahuja, G. (2002). Something old, something new: A longitudinal study of search behavior and new product introduction. Academy of Management Journal, 45(6), 1183-1194.
67. Katila, R., & Shane, S. (2005). When does lack of resources make new firms innovative? Academy of Management Journal, 48(5), 814-829.
68. Kelley, D., Peters, L., & O'Connor, G. (2009). Intra-organizational networking for innovation-based corporate entrepreneurship. Journal of Business Venturing, 24(3), 221-235.
69. Khazanchi, S., Lewis, M. W., & Boyer, K. K. (2007). Innovation-supportive culture: The impact of organizational values on process innovation. Journal of Operations Management, 25(4), 871-884.
70. Khilji, S. E., Mroczkowski, T., & Bernstein, B. (2006). From invention to innovation: Toward developing an integrated innovation model for biotech firms. Journal of Product Innovation Management, 23(6), 528-540.
71. Kirkman, B. L., Lowe, K. B., & Gibson, C. B. (2006). A quarter century of culture's consequences: A review of empirical research incorporating Hofstede's cultural values framework. Journal of International Business Studies, 37(3), 285.
72. Kor, Y. Y. (2006). Direct and interaction effects of top management team and board compositions on R&D investment strategy. Strategic Management Journal, 27(11), 1081-1099.
73. Kotabe, M., Martin, X., & Domoto, H. (2003). Gaining from vertical partnerships: Knowledge transfer, relationship duration, and supplier performance improvement in the U.S. and Japanese automotive industries. Strategic Management Journal, 24(4), 293-316.
74. Kotler, P. (1997). Marketing management: Analysis, planning, implementation and control. (8th ed.). Upper Saddle River, NJ: Prentice Hall.
75. Kuratko, D. F., Ireland, R. D., Covin, J. G., & Hornsby, J. S. (2005). A model of middle-level managers' entrepreneurial behavior. Entrepreneurship: Theory & Practice, 29(6), 699-716.
76. Lassen, A. H., Gertsen, F., & Riis, J. O. (2006). The nexus of corporate entrepreneurship and radical innovation. Corporate Entrepreneurship and Radical Innovation, 15(4), 359-372.
77. Lau, C.-M., & Ngo, H.-Y. (2004). The HR system, organizational culture, and product innovation. International Business Review, 13(6), 685-703.
78. Lee, S.-H., Wong, P.-K., & Chong, C.-L. (2005). Human and social capital explanations for R&D outcomes. IEEE Transactions on Engineering Management, 52(1), 59-68.
79. Leonard, D., & Sensiper, S. (1998). The role of tacit knowledge in group innovation. California Management Review, 40(3), 112-132.
80. Li, H., & Atuahene-Gima, K. (2001). Product innovation strategy and the performance of new technology ventures in China. Academy of Management Journal, 44(6), 1123-1134.
81. Li, K., Hu, Y., & Chi, J. (2007). Major sources of production improvement and innovation growth in Chinese enterprises. Pacific Economic Review, 12(5), 683-710.
82. Lin, B.-W., Lee, Y., & Hung, S.-C. (2006). R&D intensity and commercialization orientation effects on financial performance. Journal of Business Research, 59(6), 679-685.
83. Lipparini, A., & Sobrero, M. (1994). The glue and the pieces: Entrepreneurship and innovation in small-firm networks. Journal of Business Venturing, 9(2), 125-140.
84. Luo, Y., & Peng, M. W. (1999). Learning to compete in a transition economy: Experience, environment, and performance. Journal of International Business Studies, 30(2), 269-295.
85. Lyons, R. K., Chatman, J. A., & Joyce, C. K. (2007). Innovation in services: Corporate culture and investment banking. California Management Review, 50(1), 174-191.
86. Marvel, M. R., & Lumpkin, G. T. (2007). Technology entrepreneurs' human capital and its effects on innovation radicalness. Entrepreneurship: Theory & Practice, 31(6), 807-828.
87. McLean, L. D. (2005). Organizational culture's influence on creativity and innovation: A review of the literature and implications for human resource development. Advances in Developing Human Resources, 7(2), 226-246.
88. Mehr, D. G., & Shaver, P. R. (1996). Goal structures in creating motivation. Journal of Creative Behavior, 30(2), 77-104.
89. Michael, S., & Pearce, J., II. (2009). The need for innovation as a rationale for government involvement in entrepreneurship. Entrepreneurship and Regional Development, 21(3), 285-302.
90. Mumford, M. D. (2000). Managing creative people: Strategies and tactics for innovation. Human Resource Management Review, 10(3), 313-351.
91. Naman, J. L., & Slevin, D. P. (1993). Entrepreneurship and the concept of fit: A model and empirical tests. Strategic Management Journal, 14(2), 137-153.
92. Neuman, G. A., Wagner, S. H., & Christiansen, N. D. (1999). The relationship between work-team personality composition and the job performance of teams. Group & Organization Management, 24(1), 28-45.
93. Nohria, N., & Gulati, R. (1996). Is slack good or bad for innovation? Academy of Management Journal, 39(5), 1245-1264.
94. Oden, H. W. (1997). Managing corporate culture, innovation, and intrapreneurship. Westport, CT: Quorum Books.
95. OECD. OECD reviews of innovation policy: China. (2008). Paris: Author. Retrieved January 16, 2010, from
96. O'Reilly, C. A., Chatman, J., & Caldwell, D. F. (1991). People and organizational culture: A profile comparison approach to assessing person-organization fit. Academy of Management Journal, 34(3), 487-516.
97. O'Reilly, C. A., & Chatman, J. A. (1996). Culture as social control: Corporations, cults, and commitment. Research in Organizational Behavior, 18, 157-200.
98. Organ, D. W., Podsakoff, P. M., & MacKenzie, S. B. (2006). Organizational citizenship behavior. Thousand Oaks, CA: Sage.
99. Pelz, D. C., & Andrews, F. M. (1976). Scientists in organizations: Productive climates for research and development. Ann Arbor, MI: Institute for Social Research.
100. Peng, M. W. (2001). How entrepreneurs create wealth in transition economies. Academy of Management Executive, 15(1), 95-108.
101. Peng, M. W., & Heath, P. S. (1996). The growth of the firm in planned economies in transition: Institutions, organizations, and strategic choice. Academy of Management Review, 21(2), 492-528.
102. Price, R. M. (2007). Infusing innovation into corporate culture. Organizational Dynamics, 36(3), 320-328.
103. Psacharopoulos, G. (1985). Returns to education: A further international update and implications. Journal of Human Resources, 20(4), 583-604.
104. Romer, P. M. (1986). Increasing returns and long run growth. Journal of Political Economy, 94(5), 1002-1037.
105. Rothwell, R. (1994). Towards the fifth-generation innovation process. International Marketing Review, 11(1), 7-31.
106. Rule, E. G., & Irwin, D. W. (1988). Fostering intrapreneurship: The new competitive edge. Journal of Business Strategy, 9(3), 44-47.
107. Schein, E. H. (2004). Organizational culture and leadership. San Francisco: Jossey-Bass.
108. Schultz, T. W. (1961). Investment in human capital. American Economic Review, 51(5), 1035-1039.
109. Schumpeter, J. A. (1934). The theory of economic development. Cambridge, MA: Harvard University Press.
110. Shane, S. (1992). Why do some societies invent more than others? Journal of Business Venturing, 7(1), 29-75.
111. Sharma, P., & Chrisman, J. J. (1999). Toward a reconciliation of the definitional issues in the field of corporate entrepreneurship. Entrepreneurship: Theory & Practice, 23(3), 11-27.
112. Smith, K. G., Collins, C. J., & Clark, K. D. (2005). Existing knowledge, knowledge creation capability, and the rate of new product introduction in high-technology firms. Academy of Management Journal, 48(2), 346-357.
113. Stopford, J. M., & Baden-Fuller, C. W. F. (1994). Creating corporate entrepreneurship. Strategic Management Journal, 15(7), 521-536.
114. Sully de Luque, M., & Javidan, M. (2004). Uncertainty avoidance. In R. J. House, P. J. Hanges, M. Javidan, P. W. Dorfman, & V. Gupta (Eds.), Culture, leadership, and organizations: The GLOBE study of 62 societies. Thousand Oaks, CA: Sage.
115. Sun, L.-Y., Aryee, S., & Law, K. S. (2007). High-performance human resource practices, citizenship behavior, and organizational performance: A relational perspective. Academy of Management Journal, 50(3), 558-577.
116. Svyantek, D. J., & Bott, J. P. (2004). Organizational culture and organizational climate measures: An integrative review. In J. C. Thomas (Ed.), Comprehensive handbook of psychological assessment: Industrial and organizational assessment (Vol. 4, pp. 507-524). Hoboken, NJ: Wiley.
117. Tan, J. J. (2001). Innovation and risk-taking in a transitional economy: A comparative study of Chinese managers and entrepreneurs. Journal of Business Venturing, 16(4), 359-376.
118. Tan, J. J., & Litschert, R. J. (1994). Environment-strategy relationship and its performance implications: An empirical study of the Chinese electronics industry. Strategic Management Journal, 15(1), 1-20.
119. Tang, L., & Koveos, P. E. (2004). Venture entrepreneurship, innovation entrepreneurship, and economic growth. Journal of Developmental Entrepreneurship, 9(2), 161-171.
120. Tellis, G. J., Prabhu, J. C., & Chandy, R. K. (2009). Radical innovation across nations: The preeminence of corporate culture. Journal of Marketing, 73(1), 3-23.
121. Teng, B.-S. (2007). Corporate entrepreneurship activities through strategic alliances: A resource-based approach toward competitive advantage. Journal of Management Studies, 44(1), 119-142.
122. Tower, C. B., Sebora, T. C., Hartman, E. A., & Cornwall, J. R. (1993). Measurement of organizational innovation: A process approach. Journal of Business and Entrepreneurship, 5(2), 23-26.
123. Tsai, W., & Ghoshal, S. (1998). Social capital and value creation: The role of intrafirm networks. Academy of Management Journal, 41(4), 464-476.
124. Ulijin, J., & Brown, T. E. (2004). Innovation, entrepreneurship and culture: A matter of interaction between technology, progress and economic growth? An introduction. In T. E. Brown, & J. Ulijin (Eds.), Innovation, entrepreneurship and culture: The interaction between technology, progress and economic growth (pp. 1-38). Northampton, MA: Edward Elgar.
125. Van de Ven, A. H. (1986). Central problems in management of innovation. Management Science, 32(5), 590-607.
126. van der Panne, G., van der Beers, C., & Kleinknecht, A. (2003). Success and failure of innovation: A literature review. International Journal of Innovation Management, 7(3), 309-338.
127. Verhaeghe, A., & Kfir, R. (2002). Managing innovation in a knowledge intensive technology organisation (KITO). R&D Management, 32(5), 409-417.
128. Vermeulen, P. A. M. (2005). Uncovering barriers to complex incremental product innovation in small and medium-sized financial services firms. Journal of Small Business Management, 43(4), 432-452.
129. Walcott, S. (2003). Chinese science and technology industrial parks. Burlington, VT: Ashgate.
130. Wang, Z.-M., & Wang, S. (2008). Modeling regional HRM strategies in China: An entrepreneurship perspective. International Journal of Human Resource Management, 19(5), 945-963.
131. Wolff, A. W. (2007). China's drive toward innovation. Issues in Science and Technology, 23(3), 54-62.
132. Woolley, J., & Rottner, R. (2008). Innovation policy and nanotechnology entrepreneurship. Entrepreneurship Theory and Practice, 32(5), 791-811.
133. Xin, K. K., & Pearce, J. L. (1996). Guanxi: Connections as substitutes for formal institutional support. Academy of Management Journal, 39(6), 1641-1658.
134. Yang, J. Y., & Li, J. (2008). The development of entrepreneurship in China. Asia Pacific Journal of Management, 25(2), 335-339.
135. Zahra, S. A., Ireland, R. D., Gutierrez, I., & Hitt, M. A. (2000). Privatization and entrepreneurial transformation: Emerging issues and a future research agenda. Academy of Management Review, 25(3), 509-524.
136. Zahra, S. A., Kuratko, D. F., & Jennings, D. F. (1999). Guest editorial: Entrepreneurship and the acquisition of dynamic organizational capabilities. Entrepreneurship: Theory & Practice, 23(3), 5-10.
137. Zhang, J. (2003). The development of high-tech enterprises in China's universities. Wuhan, China: Huanzhong Science and Technology University Press.
138. Zhang, Y., Li, H., Hitt, M. A., & Cui, G. (2007). R&D intensity and international joint venture performance in an emerging market: Moderating effects of market focus and ownership structure. Journal of International Business Studies, 38(6), 944-960.
139. Zhao, S. (2008). Application of human capital theory in China in the context of the knowledge economy. International Journal of Human Resource Management, 19(5), 802-817.
140. Zhao, Z., & Yang, H. (2008). Management practices in high-tech environments and enterprises in the People's Republic of China. Chinese Economy, 41(3), 17-33.
141. Zien, K. A., & Buckler, S. A. (1997). Dreams to market: Crafting a culture of innovation. Journal of Product Innovation Management, 14(4), 274-287.