Innovation and ethics in organizational change management

Innovation and Ethics

An Analysis of What Drives Innovation and How Ethics Play a Role

"the race for the survival of the world is not the strongest, but the most adaptive."

Samsung Vice Chairman and CEO Jong-Yong Yun

Innovation is at the top of nearly every organizations priority list, yet it is probably one of the misunderstood concepts of the current generation of business leaders. Every organization can feel the need to change, the changing external environment demands that they do. Some observers of business trends have commented that the "knowledge economy" of the 1990s and 2000s is evolving into the "creativity economy" as companies from the United States, Europe, and Japan are reaching new heights in creativity, imagination, and innovation (Daft, 2010). This trend is changing the landscape for management and the next generation of future leaders must ensure that innovation lies at the heart of what drives them. Management must be fully aware of the vehicles of innovation so that they can provide the top-down support that is necessary to foster innovation from a customer driven perspective. Ultimately, the entire business model is focus on the consumer and, that famous saying, "People don't want a six inch drill, they want a six inch hole," really understanding what it is that the consumer wants in your particular area (Kester, 2009).

Problem Statement

This research will conduct an overview of research on innovation to try to determine how innovation applies to times of change and how ethics are related to the innovation process. It is hypothesized that maintaining an ethical code of conduct is a critical success factor in innovation and change management. The literature review will provide a background on innovation in general follow by a more targeted analysis of innovation and ethics.

Literature Review

One way to look at innovation would be through the lens of employee motivation. If employees are actively engaged with their organization and their particular industry, due to high levels of motivation, then it would seem reasonable to suspect that such an employee would be constantly scanning for opportunities to innovate. One study tests the assumptions that employee motivation is necessary for the organization to progress or achieve success (Manzoor, 2012). The primary focus of this research was to determine the contributing factors that can facilitate higher levels of employee motivation towards organizational goals.

The literature identifies many factors related to employee performance such as performance appraisals, employee motivation, employee satisfaction, compensation, training and development, and job security. There are multiple definitions and perspectives that have relevance for measuring the level of organizational effectiveness. However, most definitions include various forms of the effective utilization of resources to meet organizational objectives.

The main objective of the study is to analyze the impact of employees' motivation on organizational effectiveness. The sub-objectives of the study are (Mazoor, 2012):

• To determine the factors that increase employees' motivation

• To examine the relationship between employees motivation and organizational effectiveness

Employee motivation is the independent variable that is measured through recognition and empowerment and the dependent variable in the study is organizational effectiveness. This research collected data and found a significant correlation between job satisfaction and job recognition. There is also evidence to suggest that a lack of appropriate recognition reduces job satisfaction. This indicates that empowerment permits employees to formulate a greater role in the decision making process; by empower employees, not only do you give them more room to navigate without bureaucratic oversight, but you are also able to foster higher levels of organizational commitment (Manzoor, 2012).

Other studies have worked to examine the nature of job satisfaction and its correlative relationship with job turnover. Job satisfaction is correlated with employee motivation which is also correlated with innovation. One study examines specifically the trajectory of job satisfaction as it relates to causing worker turnover in a number within the hospitality industry; the study focused on 5,270 participants within the industry that worked at 175 different businesses (Liu, Mitchell, Lee, Holtom, & Hinkin, 2012).

The researchers uncovered an interesting relationship between turnover and job satisfaction. There was a higher turnover rate with job dissatisfaction, which has been proven by prior research in previously published studies and empirical evaluations. Yet, this research uncovered that even positive changes in job satisfaction did not directly lead to a decrease in individuals leaving their current positions (Liu, Mitchell, Lee, Holtom, & Hinkin, 2012). Therefore, hat job satisfaction alone is not the only factor in turnover rates, and that it has a multilevel influence on individual employees, signifying that its influence can increase or decrease depending n the individual's situation and temperament. The literature will continue to explore the relationship between job satisfaction and turnover rates because it shows the multifaceted nature of satisfaction influence on an employee's decision to stay, or leave to find other employment (Liu, Mitchell, Lee, Holtom, & Hinkin, 2012).

Some aspects of job satisfaction are undoubtedly manipulated by the management and the organizational culture. However, it is likely that, like comparisons to previous job satisfaction levels at other positions, that cannot be manipulated by management. Even though some of these factors are uncontrollable, a manager's can effectively increase ability to elevate the level of satisfaction within their teams on the factors within their power. Furthermore, job satisfaction trajectory has to show positive improvements in order to curb increasing levels of turn over which can ultimately foster a commitment to innovation.

Other researchers have considered what may drive innovation form other perspectives. Although a great deal of attention has been given to the impact of individual personalities within a team dynamic, less attention has been directed towards the holistic influence of organizational culture and teams leaders. An estimated 60-68% of organizations use teams as part of their working structure, so the need for such an evaluation of the components of team success is essential. Another study found that "organization culture, team interactions, team efficiency and paternalistic leadership" were strong predictors of team innovation and cohesiveness (Wu, Wang, & Tsai, 2010).

A team can be defined as a group working towards a common goal in which a team leader has additional responsibilities outside of those of the usual leadership sphere: he or she does not merely set the agenda but has a constant 'coaching' role in training the members to solve problems, motivating them, inspiring them, and enabling them to grow (Wu, Wang, & Tsai, 2010). However, the definition of team leadership is heavily debatable and many management theories suggest that at times more democratic, hands-off, or participative approaches to team leadership may be demanded, even that the ultimate goal of a team is autonomy rather than a close relationship with the leader.

Some researchers takes a very positive view of the 'paternalistic' nature of team leadership in which the leader has a clearly hierarchical place above the rest of the team members but uses this role in a very beneficial way for the good of the team and its overall objectives. Organizational cultures can similarly reinforce such values as "mutual learning, interaction and participation by personnel, power-sharing, and internal cooperation" and such cultures are, according to the authors, more likely to produce productive teams (Wu, Wang, & Tsai 2010).

One study used a methodology as follows: 800 surveys were distributed to 70 teams within 20 different companies; the teams were surveyed in terms of their beliefs about leaders' "transactional leadership, transformational leadership, and patriarchal leadership" and the extent to which the organizational culture emphasized team spirit (Wu, Wang, & Tsai 2010). Overall, a transformational leadership style was found to be a facilitator of productivity, provided it was located an organizational culture which stressed team spirit. Ultimately, the organizational culture was found to be the main driver that increased both innovation and excellence on the part of the team. Furthermore, transformational leadership requires the support of the organizational culture to be effective.

Other research that can pertain to the creation of a culture of innovation can look at the importance of fostering global leadership skills (Maznevski & Distefano, 2000). Global organizations in particular need to recognize the core traits and skills of global leaders, and foster those traits in employees. One way of fostering global leadership is through the development of teams that allow individuals the opportunity to demonstrate leadership. Using a trait theory approach, one study analyzes the large body of research on the characteristics that are important for global leaders which includes factors such as knowledge, learning, adaptability, relationship management, and management of ambiguity are all identified as core global leadership traits (Maznevski & Distefano, 2000).

The global marketplace places special strains on leaders and leading in a global environment is more complex than leading in a domestic market. The claim is made that diversity, geographic distribution, and the task effect are core factors influencing global team success. Critical team processes include mapping, bridging, and integrating. Mapping refers to compositional differences, bridging refers to communication of those differences, and integrating refers to synthesizing the multiple approaches.

This research indicates how high-performance teams are needed in all global organizations. The specific functions of mapping, bridging, and integrating can be applied to a number of different organizational settings and cultures. From a human resources perspective, this information can be used to inform hiring decisions, and team resource allocation decisions. Managers will also benefit from an understanding of the core factors that influence the success of a global team. Understanding the traits of global teams through this research can help me to effectively lead and motivate others to the attainment of organizational goals.

Innovation and Ethics

The current targeting business ethics often is included in a broader emerging field of investigation known as corporate social responsibility (CSR) (Joyner & Payne, 2002). CSR can be broadly thought of as measure of organizations meet the primary objectives of their immediate stakeholders as well as the extended set of relevant stakeholders, society, and the environment in general (Ecchia, Dragone, Orsini, & Pasotti, 2007). There has been growing evidence that broadening the category of stakeholders and their objectives can has positive benefits to organizations. However, there has also been conflicting evidence presented that has indicated that socially responsible companies actually are valued less than control sample in the market in a longitudinal study (Becchetti & Ciciretti, 2009).