Effect of organizational factors on employees’ generation of innovative ideas

Abstract

Purpose – The purpose of this paper is to measure the relationship between the organizational factors that affect innovation performance and the idea generation of employees. Factors examined include: appropriate use of rewards inside the organization, management support for developing new ideas, the tolerance in accepting failures and taking risks, allocation of resources and specially the free time, and finally the organizational structure and the related centralization of decision making. Design/methodology/approach – The purpose of the study is achieved through an empirical quantitative study on the software development industry of Egypt. Findings – Results indicate that, while all factors proved to be significantly correlated with employees’ innovative ideas generation; the availability of innovation based rewards, action based managerial support and decentralized decision making proved to be the most important factors contributing to the increase of innovation ideas generated and shared by employees. Results also indicate that managers and leaders generate more ideas than junior employees. Originality/value – Understanding the organizational factors that contribute to the employee’s generation of innovative ideas enables organizations to adapt their practices towards maximizing the contribution of their employees to more successful organizational innovation.