The Impact of a Creativity‐supporting Work Environment on a Firm's Product Innovation Performance

Abstract

Many scholars and practitioners have suggested that a creativity‐supporting work environment contributes to a firm's product innovation performance. Although there is evidence that such an environment enhances innovative behavior at individual level, very few studies address the effect of a creativity‐supporting work environment on product innovation performance at firm level, and the results are inconsistent.This paper examines the relationship between a firm's creativity‐supporting work environment and a firm's product innovation performance in a sample of 103 firms. For measuring a firm's creativity‐supporting work environment, a comprehensive and creativity‐focused framework is used. The framework consists of 9 social‐organizational and 12 physical work environment characteristics that are likely to enhance employee creativity. These characteristics contribute to the firm's overall work environment that supports creativity. The firm's product innovation performance is defined by two distinct concepts: new product productivity (NP productivity), which is the extent to which the firm introduces new products to the market, and new product success (NP success), which is the percentage of the firm's sales from new products. In most firms, different knowledgeable informants provided the data for the variables.The results show that firms with creativity‐supporting work environments introduce more new products to the market (NP productivity), and have more NP success in terms of new product sales (NP success). NP productivity partly mediates the relationship between creativity‐supporting work environment and NP success. The mediation model shows that the two paths from a creativity‐supporting work environment to NP success are about equally important: the direct path between creativity‐supporting work environment and NP success has a coefficient of .22, and the coefficient of the indirect path via NP productivity is .23.The creativity‐supporting work environment framework can be used in managerial practice to enhance employee creativity for product innovation. It allows applying a flexible and broad approach by influencing both social‐organizational and physical characteristics of the work environment.