Top management influence on innovations: effects of executive characteristics and social culture

Journal of Management, Fall, 1993 by Richard C. Hoffman, W. Harvey Hegarty

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Cohen, J. & Cohen, P. (1983). Applied multiple regression/correlation analysis for the behavioral sciences, 2nd ed. Hillsdale, NJ: Lawrence Erlbaum. Business organizations in mature, industrial economies have a growing interest in innovation for competitive advantage in global markets (Bartlett & Ghoshal, 1989; Business Week, 1990). When innovation is considered a source of competitive advantage, it represents a strategic change (Cooper & Schendel, 1976) and becomes part of the firm's strategy (Ettlie, Bridges & O'Keefe, 1984) and; therefore, top management's responsibility. Little attention has been paid to the interaction between innovation and the strategic management of organizations.

Previous research on organizational innovations has established that key actors such as staff (Moch & Morse, 1977) and technical (Fennell, 1984) experts/champions are critical to the success of innovations. Little research exists on the role of top managers in influencing innovations. This study explores the effect of selected executive characteristics and social culture on top management's influence on innovations. Executive characteristics are both important sources of influence on strategic decisions (Hambrick, 1981) as well as critical to those who champion innovations (Ettlie et al., 1984; Moch & Morse, 1977). The strategic innovation processes within organizations may vary across cultures because cultures/nations differ: in values associated with innovation (Hofstede, 1980); in their modes of strategy formulation (Schneider, 1989); and in their rate of innovative activity (National Science Board, 1989; Shane, 1992). This study seeks to provide a better understanding of the relationships among top management, culture, and innovation.

Relevant Prior Literature

The role of top management in strategic innovations is conceptualized as an influence process. Strategic decisions and innovations are usually adopted (Bigoness & Perreault, 1981; Jemison, 1981) or championed (Howell & Higgins, 1990) via influence processes. Drawing on both the literatures of strategic management and organization theory, managerial influence is conceptualized as a function of managerial, organizational, and environmental (e.g., culture) variables. The ensuing review first develops the major connections between innovation and each of the following: strategy, culture, and executive characteristics. Then specific relationships between selected executive characteristics and influence on innovations as well as the moderating effect of culture on these relationships are described in the next section.

Strategy, Innovation, and Top Management

In this section we argue that innovations are frequently sources of strategic changes for firms. In such instances, top managers may influence or champion innovations. Furthermore, different types of innovations may be subjected to different influence processes.

Business strategy delineates the firm's competitive position vis-a-vis other firms offering similar goods or services. Innovations represent something new for the firm or its markets. Within organizations, innovations seem to parallel the three strategic choices (Miles & Snow, 1978), made by top managers concerning new or improved products, technological processes (Cooper & Schendel, 1976; Ettlie et al., 1984; Meyer & Goes, 1988; Normann, 1971), and administrative structures (Kimberly & Evanisko, 1981). Consequently, innovations represent strategic changes for firms (Cooper & Schendel, 1976). Recent research supports the connection between firm strategy and innovation (Ettlie et al. 1984; Spital & Bickford, 1988). In this study we focus on two types of innovations relevant to the firm's strategy: new product/markets (PM) and administrative (ADM) structures.

Key actors or champions in the strategic innovation process include members of the top management team who are chiefly responsible for developing and implementing the firm's strategy (Hambrick, 1981). Champions are individuals who informally emerge to influence or promote an innovation within organizations (Howell & Higgins, 1990), often, because they have the expertise, resources, or other characteristics to affect the innovation.

Previous studies examining key actors in the innovation process have focused primarily on the role of staff/technical experts (Bigoness & Perreault, 1981; Ettlie et al., 1984; Fennell, 1984; Moch & Morse, 1977). However, support from executive champions (Maidique, 1980) is also needed to allocate resources (Hage & Dewar, 1973); to provide vision, structure (Quinn, 1985), formal guidance (Haggerty, 1981); and to speed up innovation adoption (Witte, 1977). Champions versus non-champions tend to possess different values, leadership styles, and use a variety of influence tactics (Howell & Higgins, 1990). To the extent these values and behaviors differ across cultures, (Hofstede, 1980; Ronen & Shenkar, 1985), cultural differences can be expected in champions' influence on innovations.