ANTECEDENTS OF CREATIVE OUTCOMES IN WORKING ENVIRONMENT – AN ANALYSIS OF COMPANIES IN VIETNAM

CHAPTER INTRODUCTION 1.1 Research background Nowadays, in the highly competitive marketplace, ability of making new ideas, better ways, and creative things is one of the main factors of a company‟s survival Creativity is not only considered as an arsenal of a manager but also a competitive disadvantage of a company Creativity is the production of novel and useful ideas in any domain and successful implementation of creative ideas within an organization lead to innovation (Amabile et al, 1996) From perceiving the important role of creativity, the need for organizations to be more competitive have fostered the interest of researchers and practitioners to better understand creativity in organizations Some researchers have tried to portray the relationship between individual creativity and organizational innovation (Amabile, 1996, Mumford et al., 2002) as well as demonstrate the relationship between individual, team and organizational aspects of creativity (Woodman et al., 1993) To encourage creativity organizations need to create a climate that supports and enables the creative thinking of employees (Amabile, 1988) In other words, organizations must try to remove barriers that might impede creativity and enhance the factors that enable creativity According to the componential theory, creativity is determined by the effects of one extra-individual (outside the person) component and three intraindividual (inside the person) components on creative cognitive processing The extra-individual component is the external work environment, consisting of several features of the organizational climate, the work group climate, managerial behaviors, and task constraints – including time pressure for getting the work done The theory focuses on an indirect route by which the work environment might influence creativity – through influences on the intraindividual components However, although it is not explicitly predicted by the theory, a direct effect of time pressure is suggested by a metaphor in the most recent revision of the theory (Amabile, 1996) According to this metaphor, doing a task or solving a problem is like getting through a maze; the comparison derives from Newell, Shaw, and Simon‟s (1962) notion that creativity depends on the exploration of the maze of available cognitive pathways Although satisfactory outcomes can be attained by following a straight path (a familiar task algorithm) out of the maze, creative solutions require exploration of unfamiliar territory One recent laboratory study designed to examine the applicability of this maze metaphor revealed that people who allocate more time to exploratory task behaviors are more likely to produce work that is rated by observers as creative (Ruscio, Whitney, & Amabile, 1998) From the preceding discussion, clearly, no one can deny the fact that making creativity is of great importance to developing of both individual and organization In the nearly years, there are many fundamental changes for organizations in Viet Nam The Vietnamese government has invested much funds and effort for the development of national economy As a result, the number of companies in Viet Nam has increased dramatically in recent years The accession of Viet Nam into WTO in 2007 has also posed a big challenge to Viet Nam business management Successful implementation of new programs, new product introductions, or new services depends on a person or a team having a good idea and developing that idea beyond its initial state has become a challenge for Vietnam organizations as competition has become harsher How is the work environment for creativity in Vietnam‟s organizations? Which factors influence Creative Outcomes in the Vietnam‟s organizations? Is this positive or negative effect? How can improve the work environment for creativity in the Vietnam‟s organizations? This research is conducted in Ho Chi Minh City, Vietnam Acknowledge the results of previous researches on the individual and organizational creativity, my study only concentrates on the influence of work environment to creativity in Vietnam‟s organization In this paper, we report a study analyzing the factors of organizational environment influence to creativity The present study will review the literature related to the framework of the study, the methodology utilized for data analysis and discussion of recommendations 1.2 Research objectives In this study, the author examines, gives comment and understands the influence of work environment in organizational to Creative Outcomes in Vietnam More specifically, it is targeted at measuring Organizational Innovation Climate (including Organizational Encouragement, Supervisory Encouragement, Workgroup Support, Freedom, Sufficient Resources, Challenging Work, and Organizational Impediments) affect to Creative Outcomes It also aims at finding out the factors contribute to the making creativity in Vietnam organization The effort is made to help business manager in the improvement of their organizational innovation climate Accordingly, the study aims to answer these below research questions: Question 1: What are Creativity and Innovation? What are differences between them? Question 2: Why are Creativity and Innovation important? Question 3: How many factors effect to making creative thinking in organizations? What are these factors? How measure them? Question 4: How is the work environment for creativity in Vietnam‟s organizations? Question 5: Which factors influence Creative Outcomes in the Vietnam‟s organizations? Question 6: How can improve the work environment for creativity in the Vietnam‟s organizations? 1.3 Practical significances of the study The results of the study are practically meaningful for impulse innovation and creative process in Vietnam‟s organizations The study helps organization to master Organizational Innovation Climate and Creative Outcomes The results of the study will provide necessary measures to improve innovation and creative process, which results in improvement in performance and competition capability The study will also enrich necessary knowledge for people who want to have innovative as well as creative ideas especially in organization environment 1.4 Scope and approach The survey is carried out in Ho Chi Minh City, aiming at the following organizations: SaoViet Audit Ltd Co., HCMC Power Project Management Company, Power Engineering Consulting Joint Stock Company 3, Rebisco Ltd Co., Firmenich Vietnam Llc., Global Network Technology Ltd Co., Dutch Lady Vietnam Ltd Co and Bureau Veritas Vietnam The study is conducted in phase: pilot study and main study The purpose of pilot test is to test the content as well as the measurement of scales Then the main study is to test the hypotheses and research model 1.5 Research method The study was carried out within steps relating to two different methods: Qualitative method: The author would use the qualitative method by carrying out group discussions with five experienced people The purpose of this step is to adjust and amend the translated questionnaire suitable with the subjects and purposes of the study Quantitative method: Quantitative study would be carried out based on the data collected from the questionnaire Quantitative study is implemented to evaluate the scale, verify the theoretical model The scale is preliminarily tested the reliability and validity using Cronbach alpha and exploratory factor analysis carried out by the SPSS 20.0 software Multiple linear regression analysis and hierarchical regression would be used to test the proposed model and the hypotheses of the study 1.6 Structure of the thesis This study includes chapters: Chapter 1- Introduction, mentions about research background, research objectives and research scope and approach Chapter – Literature review provides theoretical and empirical background supporting for hypothesized research model Chapter – Research methodology, is about the methodologies that author used to conduct the research Chapter – Data analysis and findings, discusses about the analysis that author conduct to test hypothesis and to answer the research question Chapter - Conclusion and implication, is about the results, implication, and recommendation for future research CHAPTER LITERATURE REVIEW Achieving innovative organization has become the most important task in business recently The need for organizations to be more competitive has fostered the interest of researchers and practitioners to better understand creativity in organizations Some researchers have tried to portray the relationship between individual creativity and organizational innovation (Amabile, 1996, Mumford et al., 2002) as well as demonstrate the relationship between individual, team and organizational aspects of creativity (Woodman et al., 1993) To encourage creativity organizations need to create a climate that supports and enables the creative thinking of employees (Amabile, 1988) In other words, organizations must try to remove barriers that might impede creativity and enhance the factors that enable creativity Amabile et al (1996) identified five major work environment dimensions enhance or inhibit creativity in organization Those dimensions are Encouragement of Creativity (consists of Organizational Encouragement, Supervisory Encouragement and Work Group Supports), Autonomy or Freedom, Resources, Pressures (Challenging Works, Workload Pressure) and Organizational Impediments The aim of this paper is to find out and understand various factors that effect to climate for creativity in organization This paper will review the literature under each of those dimension headings and attempt to identify the characteristics and behaviors required in each to enhance organizational creativity Chapter defines and discusses the key variables in the hypothesized models The chapter is structured in the format of the conceptualization of each variable, concluding remarks after each conceptualization and their effect on Organizational Innovation Climate The theoretical framework is introduced to explain how work environment influence to creative ability in organization 2.1 The key words: Before coming to the main part of literature review, we need to clarify some key words as follow: Firstly, what is creativity? The Encyclopedia Britannica defines creativity as “the ability to produce something new through imaginative skill, whether new solutions to a problem, a new method or device, or a new artistic object or form” Besides, in the Wikipedia, definition of creativity as “the ability of a person to be creative, participate in creating or be useful in a creative network of other people” Secondly, how about innovation? What is its meaning? Is it differing from creativity? A convenient definition of innovation from an organizational perspective is given by Luecke and Katz (2003) According to them, innovation is generally understood as the introduction of a new thing or method and innovation is the embodiment, combination, or synthesis of knowledge in original, relevant, valued new products, processes, or services” Innovation, it seems, typically involves creativity, but is not identical to it: innovation involves acting on the creative ideas to make some specific and tangible difference in the domain in which the innovation occurs For example, Amabile et al (1996) suggest that all innovation begins with creative ideas They define innovation as the successful implementation of creative ideas within an organization Thirdly and finally, we find down the meaning of Climate and Climate for creativity Climate is defined as the recurring patterns of behavior, attitudes, and feelings that characterize life in the organization Climate for creativity is that which promotes the generation, consideration, and use of new products, services, and ways of working (Isaksen, Lauer, Ekvall, & Britz, 2001) 2.2 Creativity versus Innovation In 1996, Oldham and Cummings cited that creativity is at the individual level, while innovation is at the organizational level Meanwhile, innovative is the ability to develop new products and services quickly, penetrate the market more effectively and easily According to Amabile et al (1996), creativity is the production of novel and useful ideas in any domain and innovation is the successful implementation of creative ideas within an organization Besides, at the individual level, through idea generation and implementation, creativity likely develops the innovative products at the organizational level The employees‟ creative outcomes positively influence organizational innovation and on the contrary, they are also affected by organizational innovation Next, according to Ensor et al (2001) and Heye (2006), creativity is the generation of ideas and innovation is the implementation of these ideas Innovation has been seen as a process that begins with two creative acts: idea generation and opportunity recognition The following chart summaries the innovation process: There were many studies that related to the relationship between individual and organizational creativity Current views on organizational creativity appear to focus largely on outcomes or creative products – goods and services A creative product has been defined as one that is both novel and original and potentially useful or appropriate to the organization (Amabile, 1996, Mumford and Gustafson, 1998) In 1993, Redmond et al showed that the individual creativities are the primary source of any new idea while Shalley and Gilson (2004) stated that creative outcomes provide the foundation for organizational innovation Hence, theoretically, the creative performance of employees provides the raw material needed for organizational innovation (Oldham and Cummings, 1996) At an individual level, Amabile‟s (1997) extensive body of research suggests that individual creativity essentially requires expertise (knowledge, proficiencies and abilities of people to make creative contributions to their fields), creative-thinking skills (cognitive styles, cognitive strategies and personality variables), and intrinsic task motivation (the desire to work on something because it is interesting, involving, challenging and rewarding) Her studies confirm that the higher the level that each of these three components, the higher and better the creativity In the research presented in 1998, Mumford and Gustafson show that many different factors contribute to the generation of creative products at both individual and organizational level In organizations including businesses, through new ideas, creativity make and develop innovation (Paulus & Nijstad, 2003) Additionally, creative ideas must have utility for not only organization but also business organizations They must establish an appropriate response to fill a gap in the production, marketing or administrative processes of the organization Organizational creativity is linked to a risky balance of complexity, compromise and choice The creative organization needs to be flexible while controlling risk, but at the same time provide the freedom to search for the „new‟ through learning and experimentation There is evidence that supports the view that an environment that is conducive to creativity is critical and is linked both to the culture, the climate, and the physical aspects of the environment There is a systems view of creativity which suggests that creative outcomes are produced in a creative environment, where creativity as a culture is encouraged and rewarded In this context, creativity is not confined to a few individuals, but all employees are encouraged to be creative for the benefit of the whole In organizations, creativity is facilitated when individuals are given maximum discretion in how they organize their work, when self-efficacy is strong, and when information is of high quality Individual and organizational creative development is supported by structures and processes that ensure permeable boundaries, value increasing complexity, and provide safe psychological spaces In general, individual creativity is concerned with the generation of ideas while team and organizational creativity is concerned with both the generation of ideas and the implementation of these ideas 2.3 The climate concept Over many years, the climate concept has been consistently described as employees‟ perceptions of their organizations These perceptions are assumed to be primarily descriptive rather than affective or evaluative (Schneider & Reichers, 1983) More recent work contradicts this view, suggesting strong evaluative or affective components (Patterson, Warr, & West, 2004) At the individual level of analysis, referred to as „psychological climate‟ (James & Jones, 1974), these perceptions represent how working environments are cognitively appraised and represented in terms of their meaning to and importance to the employees in organizations (James & Jones, 1974; James & Sells, 1981) Most empirical studies have used a synthetic unit of analysis, such as the work group, department, or organization (hence group, departmental, and organizational climate structures) Such climates have been operationally built by aggregating activity of individuals with appropriate level and using the mean to represent climate at that level 2.4 Organizational Climate The organizational climate theory was first introduced by Kurt Lewin in 1930 in psychological climate study There are proliferations of meanings regarding to the organizational climate definition According to Litwin, the climate itself is powerful, as it can influence the behavior of those who experienced the climate (Stringer, 2002) Ekvall (1996) who had intensively done research for creativity and innovation climate defines climate as an organization attribution, a conglomerate of attitudes, feelings, and behaviors which characterizes life in the organization and exist independently of the perception and understandings of the organization‟s members As stated by West & Ritcher (2008) climate refers to the perceptions of the work environment and the term climate can designate description and perception at the individual, group or organizational level of analysis As the organizational climate can designate the individuals, it is also believed to increase intrinsic motivation of the employees (Goepel, 2011, Ayranci, 2011, De Jong & Den Hartog, 2003 & Ahmed, 1998) According to Vallerand (1997) intrinsic motivation relates to the pleasure perception of doing 10 R2 (.210) is smaller than R2 (.233) It helps to ensure that the model is safer, because the accordance of research model would not be exaggerated Adjusted R-square was 0.210 mean that there are approximately 21% variance of Creative Outcomes were explained by independent variables: Organizational Encouragement, Supervisory Encouragement, Work Group Supports, Freedom and Sufficient Resources, Workload Pressure, and Organizational Impediments F Test that used in the variance analysis table was hypothesis test about the appropriateness of linear regression models in overall The aim of this test was testing the linear relationship between dependent variable and the independent variables In Anova table, the value of significant level was very small (sig = 0.000), therefore the regression model was suitable with data and can be used Table 19 ANOVA (Regression) Model Regression Sum of Squares 39.082 df Mean Square 6.514 F 10.251 Sig .000b Residual 128.995 203 635 Total 168.077 209 a Dependent Variable: CREA b Predictors: (Constant), FRSR, WL, OI, SE, OE, WGS Table 20 Coefficients (Regression) Coefficients Unstandardized Standardized Coefficients Coefficients Std Model B Beta Error (Constant) 1.555 454 OE 318 076 SE -.036 076 WGS 133 088 OI 129 046 WL -.018 059 FRSR 126 072 a Dependent Variable: CREA 370 -.041 135 202 -.023 139 a Collinearity Statistics t 3.423 4.184 -.475 1.512 2.799 -.308 1.752 Sig Tolerance 001 000 635 132 006 759 081 482 506 476 725 693 602 VIF 2.073 1.975 2.101 1.380 1.444 1.660 From Table 4.15, the variance inflation factors (VIF) of OE and WGS were 2.073 and 2.101 In regression analysis , multicollinearity refers to a situation 62 of collinearity of independent variables, often involving more than two independent variables, or more than one pair of collinear variables This can render ineffective the numerical methods used to solve regression equations, typically resulting in a "multicollinearity" error when regression software is used A practical solution to this problem is to remove some variables from the model Therefore, we did regression analysis again with excluding WGS (VIF=2.101) The results were: Table 21 Descriptive Stastistic CREA OE SE OI WL FRSR Std Deviation 89677 1.04614 1.02044 1.40162 1.11970 99035 Mean 4.6705 5.0262 4.9267 3.6857 4.5762 4.8119 N 210 210 210 210 210 210 Table 22 Model summary (b) (MRL) Model R a 473 R Square 224 Adjusted R Square 205 Std Error of the Estimate 79966 a Predictors: (Constant), FRSR, WL, OI, SE, OE b Dependent Variable: CREA Table 23 ANOVA (Regression) Model Regression Sum of Squares 37.629 Mean Square 7.526 639 df Residual 130.447 204 Total 168.077 209 F 11.769 Sig b 000 a Dependent Variable: CREA b Predictors: (Constant), FRSR, WL, OI, SE, OE The result showed that regression model is relatively consistent with the significance level of 0.05 The output in table 4.17 shows the value of adjusted R2 (.205) is smaller than R2 (.224) It helps to ensure that the model is safer, because the accordance of research model would not be exaggerated Adjusted R-square was 0.205 mean that there are approximately 20.5% variance of Creative Outcomes were explained by independent variables: Organizational Encouragement, Supervisory Encouragement, Freedom and Sufficient Resources, 63 Workload Pressure, and Organizational Impediments In Anova table, the value of significant level was very small (sig = 0.000), therefore the regression model was suitable with data and can be used Table 24 Coefficients (Regression) Model (Constant) Unstandardized Coefficients Std Error B 1.806 424 Standardized Coefficients Beta Collinearity Statistics t 4.260 Sig .000 Tolerance VIF OE 351 073 410 4.828 000 528 1.894 SE -.010 074 -.012 -.137 891 534 1.874 OI 111 045 174 2.486 014 777 1.288 WL 007 057 008 115 908 750 1.333 FRSR 147 071 162 2.086 038 627 1.595 a Dependent Variable: CREA The variance inflation factors (VIF) in table 4.19 were scrutinized and all were found to be within the range of 1.333-1.894 Therefore, multicollinearity and autocorrelation were well within acceptable limits and not unduly influencing the regression estimates (Hair et al, 2006) The Sig of factors shows that three factors have statistical significant impact on Creative Outcomes They are Organizational Encouragement, Freedom & Sufficient Resources and Organizational Impediments with standardized coefficients range from 0.162 to 0.410 Based on the results shown in table 4.19, a regressions equation with standardized coefficients is established as following: CREA = 0.410OE + 0.162FRSR + 0.174OI In which: CREA : Creative Outcomes; OE : Organizational encouragement; FRSR : Freedom and Sufficient Resources OI : Organizational Impediments 64 Table 25 Levels of importance of factor Standardized coefficient Beta Variable Level of importance (the more larger, the more important) Organizational Encouragement 0.410 Organizational Impediments 0.174 Freedom and Sufficient Resources 0.162 Conclusion: Creative Outcomes was biggest affected by Organizational Encouragement (β = 0.410) The employees cannot making new, creative ideas if they don‟t receive encouragement from their organization Next, having free feeling and ready resources will increase the novel, creative thinking (β = 0.162) The element Organizational Impediments is positively associated with Creative Outcomes (β = 0.174) The factor Work group supports and Challeging Work have no meaning in the regression model, therefore, they don‟t influence to creative outcomes Table 4.21 gives the assumptions and results of the empirical analysis the influence of the factors to Creative Outcomes in the model The above results are basis for give out the implications in order to help managers improve their work environment for creativity Table 26 Assumptions and results of the empirical analysis the influence of the factors to Creative Outcomes in the model No Factors Variables Assumptions Results of the empirical analysis Organizational OE (+) (+) SE (+) (-) Encouragement Supervisory Encouragement Work group supports WGS (+) No effect Freedom FRSR (+) (+) and Sufficient Resources Challenging work CW (+) No effect Workload Pressure WL (-) (+) Organizational Impediments OI (-) (+) 65 4.3.3 Testing hypothesis The standardized regression coefficients obtained from the model are used to test the hypotheses stated in the part 4.3.2 As shown in Table 4.19, the detailed explanation about the test results of each of the hypotheses is presented below: Table 27: Testing H1a, H1d, H2b Hypotheses Relationship Standardized coefficient Beta H1a OE -(+)  CREA 0.410 0.000 is supported H1d FRSR -(+)  CREA 0.162 0.038 is supported H2b OI (+)  CREA 0.174 0.014 is supported Sig Testing hypotheses Hypothesis 1a: Organizational Encouragement increases the level of Creative Outcomes The standardized regression coefficient of Organizational Encouragement support on Creative Outcomes is 0.410 (sig = 0.000 < 0.05) This means that Organizational Encouragement is directly proportional to Creative Outcomes with 95% level of confidence Therefore, the hypothesis 1a is strongly supported Hypothesis 1d: The Freedom and Sufficient Resources increase the level of Creative Outcomes The standardized regression coefficient of Freedom and Sufficient Resources on Creative Outcomes is 0.162 (sig = 0.038 < 0.05) This means that Freedom and Sufficient Resources is directly proportional to Creative Outcomes with 95% level of confidence Therefore, the hypothesis 1d is supported Hypothesis 2b: The organizational impediments increase the level of Creative Outcomes The standardized regression coefficient of Organizational Impediments on Creative Outcomes is 0.174 (sig = 0.014 < 0.05) This means that Organizational Impediments is directly proportional to Creative Outcomes with 95% level of confidence Therefore, the hypothesis 2b is supported but not 66 the same with conceptual model, the relationship between Organizational Impediments and Creative Outcomes is positive Based on the equation, the summary of hypotheses cited in tables 4.22, the research model is revised and presented as in Figure Figure The revised research model (Significance: ** p