Innovation @ Merage - UCI Paul Merage School of Business : Research Papers, People/Culture

Does Globalization Lead to Innovation?

admin — Thu, 23 Oct 2008 21:38:00 GMT

Abstract: Competition is supposed to spur innovation. But the authors of this study found that the opposite is true for domestic firms in emerging economies. They examined 27 “transition” economies across eastern Europe and central Asia to understand how globalization — foreign direct investment, trade, and increased competition with firms operating in their home countries — affects markets and the likelihood that incumbents will develop new products and technologies. The authors looked at data from the 2002 and 2005 Business Environment and Enterprise Performance Survey.

Published: January 2008

Authors: Yuriy Gorodnichenko, Jan Svejnar, and Katherine Terrell

Link: strategy+business

Flowers and Plants in the Workspace Promote Innovation, Ideas

admin — Mon, 28 Jul 2008 22:44:00 GMT

Key Findings Shed Light on Environmental Psychology of the Workplace

In today’s economy, it is more important than ever for businesses to gain the competitive edge. Constant fluctuations in unemployment, productivity, consumer confidence and other major economic factors make it imperative for businesses to implement the right strategies to stay ahead of their competition.

According to business experts, the key to gaining the competitive edge in the modern economy is easy to understand – a happy, productive workforce. And, while sometimes the easiest notions can be the most difficult to achieve, a recent scientific study conducted at Texas A&M University finds that nature can hold the secret to business success. The research demonstrates that workers’ idea generation, creative performance and problem solving skills improve substantially in workplace environments that include flowers and plants.

“Our research shows that a change as simple as adding flowers and plants can be important in the most meaningful way to businesses in the modern economy,” said Dr. Roger Ulrich, lead researcher on the project. “People’s productivity, in the form of innovation and creative problem solving, improved – which in certain circumstances could mean the difference between mild and great business success.”

Research Findings: Overall and Men vs. Women

In an eight-month study, the Texas A&M University research team explored the link between flowers and plants and workplace productivity. Participants performed creative problem solving tasks in a variety of common office environments, or conditions. The conditions included a workplace with flowers and plants, a setting with sculpture and an environment with no decorative embellishments.

During the study, both women and men demonstrated more innovative thinking, generating more ideas and original solutions to problems in the office environment that included flowers and plants. In these surroundings, men who participated in the study generated 15% more ideas. And, while males generated a greater abundance of ideas, females generated more creative, flexible solutions to problems when flowers and plants were present.

“We know the importance of learning, for example, how natural surroundings affect drivers, school children, and hospital patients,” said Ulrich, who has conducted extensive research on the effects of environments on psychological well-being, stress and health. “To businesses, it should be equally as important to understand what features can improve performance at work and make employees more productive.”

Background: Dr. Roger Ulrich

The Impact of Flowers and Plants on Workplace Productivity Study was conducted by Roger Ulrich, Ph.D., Behavioral Scientist, Director of the Center for Health Systems and Design, Texas A&M University in College Station, Texas. Dr. Ulrich is a professor of landscape architecture and is an internationally recognized expert on the influences of surroundings on human well-being and health. His interests concern applications of environment-behavior knowledge to healthcare buildings, landscape architecture and urban design.

For The Impact of Flowers and Plants on Workplace Productivity study, Dr. Ulrich worked in cooperation with Professor Dr. James Varni, who also is internationally recognized for his research in psychology and medicine. The research lends weight to growing scientific evidence that flowers and plants, as well
as other aspects of nature, have a beneficial impact on state of mind and emotions. The Society of American Florists worked in cooperation with the Texas A&M University research team, bringing an expertise of flowers and plants to the project.

The Impact of Flowers & Plants on Workplace Productivity: Methodology

Researchers at Texas A&M University recruited 101 participants to take part in The Impact of Flowers and Plants on Workplace Productivity study. During the eight-month scientific study, participants took part in emotional, creativity and attentional demand protocols, in conditions that were carefully controlled, yet were similar to those in many office workplaces. Subjects were asked to perform a series of tasks in one of three environmental office conditions, selected at random: with fresh flowers and plants; with abstract sculpture; or with no embellishments at all. Throughout each session, subjects self-rated their moods four times, executed two creativity tasks and completed one attentional demand test. Researchers measured the number of ideas participants generated, their ideas’ originality and flexibility, and other responses, using data extracted from the tests, which included Torrance Tests of the Creative Thinking and
Profile of Mood States.

Published: October 2003

Organizational Ambidexterity

admin — Fri, 07 Mar 2008 08:27:00 GMT

What Happens to Your Stats When Every Player Is a Switch Hitter?

Switch hitters have a significant advantage. Whether it's lining up the best billiards shot or reaching to return a serve in tennis, they simply have more options. It is this ability to approach each situation from whichever side is most advantageous that gives ambidextrous players a higher probability of success.

Running a business is a lot like that. Sometimes the situation calls for a focus on short-term performance. You exploit existing opportunities and skills, cut expenditures on unproductive activities, and maximize efficiency. In short, you ensure that your management systems, activities, and resources are coherent and aligned in support of the current demands of the business environment. At other times what's needed is adaptability. You quickly reconfigure your activities in response to a change in the market, or explore emerging opportunities that have the potential to improve performance in the long term.

It's common for a company to do better in one area than the other, or even to actively pursue one over the other. But a focus on alignment without adaptability can stall a company's performance and leave it living off its glory days, while its competitors have moved on. And adaptability without alignment can be very expensive, as a company incurs the costs of experimentation without reaping the benefits of successfully implementing and marketing its results. Business analysts believe companies that excel in both domains have a greater chance of longevity and success, particularly in dynamic environments. Such companies have come to be called ambidextrous.

The trick is how to do both in the same company. Most attempts to resolve this dilemma treat alignment and adaptability as competing, incompatible goals that must be kept separate from each other. Often the two are assigned to separate business units, or to distinct groups within a business unit. Other business units focus some days on alignment, some days on adaptability.
All of these rely on structural, top-down allocation of resources by managers.

Cristina Gibson (University of California, Irvine) and Julian Birkinshaw (London Business School) see alignment and adaptability as complementary goals that can be achieved simultaneously at all functions and levels in each unit, given the right company environment. The company builds processes or systems that motivate and enable individuals to make their own judgments about how to divide their time between alignment and adaptability. Every individual both delivers value to existing customers and watches out for changes in the task environment. They call this contextual ambidexterity because it arises from the systems, processes, and beliefs within a company (its organizational context).

To investigate how context can give rise to ambidexterity, and whether ambidexterity indeed correlates with performance, the authors selected ten multinational firms from a wide variety of industries. They interviewed and surveyed 4195 individuals from 41 business units in these firms, including the top executives in each. Individual responses were aggregated to unit-level measures.

The business units clustered into four groups, with significant differences in performance between each group. The highly ambidextrous group had the best performance, followed by the moderately ambidextrous, adaptive, and aligned groups. The researchers found no trade-off between alignment and adaptability at the business unit level, and conclude that it is not necessary to sacrifice one for other.

The research shows that four aspects of organizational context are necessary for the development of ambidexterity: discipline, stretch, support, and trust. Discipline is individuals voluntarily striving to meet expectations and commitments. Stretch is individuals voluntarily striving for ambitious objectives. Support is individuals helping each other. And trust is individuals relying on each other's commitments. All four must be present and in balance to form a foundation for ambidexterity. A disproportionate focus on discipline and stretch can lead to burnout and disillusionment, while an excessive reliance on support and trust can lead to not enough work getting done.

It is the role of the senior executive to put into place the systems that create such a context. Discipline is encouraged by clear standards of performance and behavior; open, honest, and timely feedback; and consistent implementation of sanctions. Stretch results from shared ambition, collective identity, and finding personal meaning in contributing to the organization. Mutual support is encouraged by giving individuals freedom of initiative and access to each other's resources, and by the example set by senior management as they provide guidance and help to employees. And trust is created by fair and inclusive decision processes, and having competent, reliable co-workers.

Gibson and Birkinshaw stress that it is not enough simply to set up a supportive context that includes these four features. An effective leader is still needed to resolve possible conflicts among the four attributes. For example, a focus on discipline might inadvertently discourage risk taking and undermine trust. In addition, ambidexterity can take years to develop, during which senior executives must follow through and provide consistent support for both alignment and adaptability. It is particularly important for senior executives to model adaptable behavior, and also intervene to actively nurture and encourage the adaptability and new ideas of others.

The good news is that there are multiple paths to achieving ambidexterity, so each company can start where it is and fill in what is missing. For example, one organization in the study started with good support and trust, then improved its discipline and stretch (through cost reduction, quality initiatives, personal commitments to strategic objectives, increased structure, and setting more ambitious goals). Others built adaptability skills on top of traditional models of alignment. Your implementation strategy can be idiosyncratic, made to fit the history and values of your particular organization.

Source: Gibson, C. B., & Birkinshaw, J., (2004). The antecedents, consequences and mediating role of organizational ambidexterity. Academy of Management Journal, 47:2, 209-226.

Managing the Melting Pot

admin — Fri, 07 Mar 2008 08:19:00 GMT

Leveraging the expertise of individuals from around the world by pulling together multicultural teams can often frustrate managers. Cultural differences inherent to these teams generate substantial obstacles which can threaten the effectiveness of the team and diminish an organization's return on its investment. Differences in communication techniques, language barriers and decision making strategies are commonly at the root of many problems.

Kristin Behfar, assistant professor at the Paul Merage School of Business at UCI, recently participated in a study to identify the challenges that lead to the breakdown of multicultural teams. Four key problem areas surfaced.

Direct versus indirect communication - In Western cultures communication is typically direct and explicit. In other cultures, the meaning may be embedded in the way the message is presented. In cross-cultural negotiations, the Westerner may have difficulty understanding the indirect approach leading to miscommunications.
Trouble with accents and fluency - While English is the language of international business, misunderstandings or deep frustration may occur because of a nonnative speaker's accent, lack of fluency or problems with translation or usage. These may also influence perceptions of status or competence which could lead to even bigger problems for the multicultural team.
Differing attitudes toward hierarchy and authority - Teams, by design, have a rather flat structure. This organizational structure may be uncomfortable for team members from hierarchical cultures where people are treated differently according to their status. In addition, hierarchical cultures tend to defer to superior persons for direction, while team members from an egalitarian culture might view this as a weakness.
Conflicting norms for decision making - The speed at which a decision is made and the amount of analysis required beforehand varies enormously from one culture to another. U.S. managers tend to make decisions very quickly and with relatively little analysis, while managers from other cultures may decline to share information until they understand the full scope of a project.

Choosing the right strategy to overcome these problems requires managers to consider the challenges and the conditions affecting the team. Even after a strategy is identified, they must be on the look out for complicating factors which may hinder progress or the team's ability to implement the selected strategy.

Adaptation - This strategy acknowledges cultural gaps openly and develops ways to works around them. It is best used to solve problems involving decision making differences, misunderstandings or stonewalling that have developed due to cultural rather than personal differences. Negotiating a common understanding can take time and team members must be exceptionally aware for this strategy to be effective.

Structural Intervention - Changing the physical shape of a team can eliminate problems by removing the barriers to success or facilitating a smoother delivery. Reorganizing a team deliberately or removing a hierarchical threat can eliminate emotional tensions related to fluency issues or prejudice. Even inhibitions created by perceived status differences can be eliminated. If the structural intervention chosen involves subdividing teams, managers need to be sure that the subgroups fit back together and that the subdivision itself does not work to strengthen preexisting differences.

Managerial Intervention - Setting norms early or bringing in a higher-level manager, provided hierarchies are respected, can effectively sort out problems. This strategy works best when violations of hierarchy have resulted in a perceived loss of face and when the absence of ground rules is causing conflict. Problems that are emotionally charged or that have resulted in a stalemate are best resolved using managerial intervention. This strategy however makes it difficult to empower a team and some team members may be sidelined or resistant to this approach.

Exit - To salvage an emotionally charged situation, where too much face has been lost on both sides, the strategy of removing a team member is sometimes best. It is especially effective with permanent teams that have a member who cannot adjust or is unable to contribute to a project. The downside of this strategy is that the talent of the removed team member is lost to the group as are the training costs involved.

Cultural differences can be very serious and severely impact a team's ability to function. The good news is, by avoiding single-culture biases and choosing the right strategy, the full potential of a multicultural team can be realized.