The Impact of Culture on Innovation: the moderating role of Human Capital

Abstract

Innovation plays an important role in developing the economy, to expand and sustain the high performance of firms, to maintain competitive edge in industry and improved the standard living and in creating a better quality of life. In Adhocratic culture, openness provides to employees and no fear of doing faults or getting things wrong to be done, human capital are the creative peoples and if democratic organizational culture is provided to them the organization can be find more innovative. The focus of current study was on the link between organizational cultures and innovation. Although the literature suggests the relevance of culture in increasing innovation, there is a lack of empirical evidence supporting this relation, which this study has explored. Our findings provide support for this relation. Furthermore we found that the organization culture can enhance product innovation, but that it can also inhibit it depending on the values that culture fosters. In particular we found that product innovation is positively associated to adhocracy cultures and has a negative relation to the hierarchical cultures.