ФАКТОРЫ ВЛИЯНИЯ КОРПОРАТИВНОЙ КУЛЬТУРЫ НА ИННОВАЦИОННУЮ И ПРЕДПРИНИМАТЕЛЬСКУЮ АКТИВНОСТЬ РОССИЙСКИХ МЕНЕДЖЕРОВ

Первакова Е.Е.

Доцент, кандидат экономических наук, докторант Академии народного хозяйства и государственной службы при Президенте Российской Федерации.

ФАКТОРЫ ВЛИЯНИЯ КОРПОРАТИВНОЙ КУЛЬТУРЫ НА ИННОВАЦИОННУЮ И ПРЕДПРИНИМАТЕЛЬСКУЮ АКТИВНОСТЬ РОС-СИЙСКИХ МЕНЕДЖЕРОВ

Аннотация

Статья посвящена описанию способов влияния корпоративной культуры на эффективность инновационной и предпринимательской деятельности.  В работе приводятся результаты эмпирического исследования автора о приоритетности различных факторов корпоративной культуры для поддержки инновационного и предпринимательского поведения сотрудников российских компаний.

Ключевые слова: корпоративная культура, инновационная активность сотрудников.

Pervakova Е.Е.

Associate professor, Candidate of Economic Sciences, doctoral candidate of Academy of National Economy at the Government of RF

CORPORATE CULTURE FACTORS INFLUENCING THE RUSSIAN MANAGERS INNOVATIVE AND ENTREPRENEURIAL ACTIVITY

Abstract

This article describes how the corporate culture influences the effectiveness of the innovative and entrepreneurial activity. The report presents the results of the author’s empirical study of the priority of the various corporate culture factors in order to support innovative and entrepreneurial behavior of the Russian companies’ employees.

Keywords: corporate culture, innovative activity of personnel.

There are many factors that make a company truly innovative: an innovation strategy, a leadership vision for a business, a deep understanding of the client, employee talent, but more important than any of these elements separately is the corporate culture. It is a set of behavioral patterns, meanings and values that characterize the members of the organization (Robbins S, Stephen P, 1994 ).

The leading consulting firms’ studies (Jaruzelski B, Loehr J., 2011), allow us to focus on two common corporate culture factors of the world leading innovative companies - the strong relationship with their customers and pride for their products. This means not only focusing on the client in the ordinary sense, but also including the consumer in the very process of innovation, needs analyzing and active want formation, taking into account the opinion of consumers when selecting the options and debugging samples.

The aim of our study was to identify the corporate culture factors that influence the innovative and entrepreneurial activity of companies’ personnel according to Russian managers.

During the first phase of the study (2009-2010) a series of in-depth interviews and focus groups with the owners, managers and HR specialists were held to identify the main barriers for the initiation and implementation of innovation in Russian companies, as well as to define a set of corporate culture factors, which have the greatest impact on innovative and entrepreneurial activity of the company employees (Lyapina S.V. Pervakova Y.Y 5, 2009).

Among the main barriers for the creation of innovative, including the entrepreneurial, climate inside of the organizations the following were named:

- the employees’ habit that the initiative is punishable;

- the perception of the initiatives as a danger of take-over by the management;

- the lack of common ideology;

- the lack of effective vertical communication in the organization;

- the internal competition;

- the unfavorable psychosocial climate, conflicts, poor working conditions;

- the weakness and lack of competence of the initiator of innovative proposals;

- the lack of financial motivation system of the innovative activity

As a result of the first stage the list of the following 13 corporate culture factors were determined. According to the opinion of the focus groups, these factors have the positive impact on the company employees’ innovative activity and contribute to the growth of the business projects number inside of the company:

№	Factor	Nature and way of influence (aspects)	Comments
1.	Transparency of goals	An employee understands and accepts the mission of the company, i.e. the purpose of the company in terms of common good, the benefits that the company brings to the society.	It should be noted that the mission declares the common good without mentioning the benefits of the individual.
2.	Solidarity in values	An employee knows and shares the true values of the executives and the company's shareholders, as well as their vision of the future.	Generally, this is the most difficult task, because these values have to be honest, positive, and able to inspire other people.
3.	Optimism	An employee believes in the future of the company, is confident about the right path chosen by the executives and believes in their ability to pass along successfully.	The progressive images of the future and the transition to a new quality of life are necessary.
4.	Democratic style of management	A leader has the authority, but his management style is not too authoritarian, i.e. he is ready to accept feedback and suggestions from subordinates.	However, when there is too much delegation of authority, lack of control over the chief’s decisions realization, it causes chaos and discourage an effective innovation.
5.	Well-run channel of communication and common ground rate with your chief	An employee has the ability to bring his innovative ideas to the company's management quickly and easily.	The culture of communication is of great importance, when the chief responds to the subordinates letters and requests without delay, and all decisions adopted at the meetings are being really controlled and implemented.
6.	Favorable working environment	A company has a dynamic, cheerful, professional and competent atmosphere.	It is important that there are no any conflicts between the major functional and service departments.
7.	Mutual assistance and cooperation	A mentoring is in practice in the company, you can consult with more experienced colleagues, discuss your ideas and find necessary help when implementing them.	An informal leadership is welcomed, if the informal leader has a good relationship with the executives.
8.	Project-team approach to objectives of development	A company has developed a team activity, it organizes teams for specific projects, and in this case, team composition can vary depending on the purpose of the various projects.
9.	Individual competition restriction	A company does not develop and welcome individual competition, but it encourages a team competition.
10.	Self-esteem and self-realization	An employee feels important, he feels that his opinion is valued, he is listened, and his chief shows a personal interest. The executives care about the working conditions of employees.	It is necessary to carry out the events during which employees can express their opinions and make work improving proposals
11.	Absence of vertical functional barriers	Horizontal flows of information are well established in the company, and there is a high level of communicative culture.	And there is a minimum of tiresome bureaucracy in obtaining management approvals.
12.	Justice	An employee initiated an innovation is sure that in case of successful implementation of his proposals his priority will not be shaded and he will get adequate material compensation.
3.	Responsibility	Employees are accustomed to not only participate, but also to take responsibility.

The second phase of the study (2011-2012) consisted of a questionnaire survey of companies’ owners and managers - MBA students about the importance of these corporate culture factors in order to stimulate the employees innovative activity and form an innovative business environment in the company. The main objectives of the study were

1. Identification of the most important factors affecting the efficiency of innovation and cost.

2. Verification of the hypotheses about the connection between the priorities in choosing the corporate culture factors and demographic characteristics of the respondents and their companies.

3. Study the possibility of reducing the number of factors based on the rigid correlation in the participants’ responses.

104 companies from various regions of Russia took part in the survey. The companies distribution by the size of business is shown in the table 1.

In the demographic part of the questionnaire the question about the company’s business sphere (type of business) was also formulated, and the respondents could choose several areas for their company. The results of the distribution by the type of business are listed in Table 2

Table 3 shows the distribution of respondents by the staff level in their companies:

To solve the first problem of our study, every participant was asked to mark those factors of corporate culture, which, in his opinion, have a significant impact on the innovative activity in the organization. Such kind of factoring in one questionnaire brought him one point. Finally the points for each factor from all the questionnaires were summed. The results are shown in Table 4

 Thus, all the factors of corporate culture can be divided figuratively into 4 groups. The first group included the most significant factors. The factor of "transparency of goals” had the highest score, which means understanding of the company mission and its purpose in terms of common good by the employees. This result allows making a conclusion that the desire to increase the meaningfulness and the common good of the activity is the main motive of innovative behavior. The group of highly significant factors also included: a favorable working environment (the company has a dynamic, cheerful, professional and competent atmosphere) and justice (the employee’s confidence in the recognition of his contribution and receiving adequate material remuneration). The last factor clearly shows the main barrier of innovative activity in the Russian business.

The second group includes factors of sufficiently high significance: the democratic style of leadership, well-ran channel of communication with the chief and mutual assistance, cooperation and the ability to take responsibility.

The third group includes factors of the average value: optimism, solidarity in values, project- team approach to problem solving.

Finally, the fourth group includes factors of low importance. These are individual competition restriction and well established horizontal flows of information. It should be noted that both these factors are very substantial in the works of Western scholars. So we can talk about their insufficient awareness in the Russian business community.

The survey participants were given the opportunity to expand the list of the corporate culture factors that influence the effectiveness of innovation. The following factors were suggested in addition:

- the willingness of employees to acquire new knowledge and develop individually and together with other employees;

- the availability of feedback when suggesting new ideas;

- the encouragement of the personal career development;

- the availability of career progression in a short time.

To solve the problem of studying the connection between the priorities in choosing the key characteristics of the innovative corporate culture factors and demographic characteristics of the companies and respondents some basic (null) hypothesis were formulated:

Hypothesis 1: the selection of key corporate culture factors of innovation organization does not depend on the companies’ field;

Hypothesis 2: the selection of key corporate culture factors of innovation organization does not depend on the size of the company;

Hypothesis 3: the selection of key corporate culture factors of innovation organization does not depend on the executive level of the respondent

The hypotheses were verified on the basis of statistical facilities within the Statistica program (Yeliseeva I.I., Yuzbashev М.М 2004). The method of comparing the factors frequencies in the survey total sample with the relevant frequencies in a smaller demographic sample was used.

For example, let’s examine closely the verification of the basic hypothesis about the independence of the selection from the size of the company for the factor 13 - (ability to take responsibility).

For the purpose of statistical analysis all the companies are divided into two larger groups: large companies - 44, small and medium-sized companies-50.

The relative frequency of factor mentioning in the basic sample is denoted m / n, where m is the number of questionnaires mentioning this factor, n is the total number of questionnaires. For the factor of  «responsibility» m = 64, n = 104.

The relative frequency of factor mentioning in the examined subsample denote as m₀/n₀. In the specific case the subsample of small and medium-sized companies is considered, n₀=50, m₀=23 (the number of "responsibility" factor mentioning among the representatives of small and medium-sized companies).

As a testing criterion for the basic (null hypothesis) the comparison of the value of Z

 (1)          , where

(2)    

 with a criterial value of Laplace function at a significance level of 0.95 is used. In case of the excess of Z value above the criterial value the null hypothesis is rejected.

For this specific example, the value of p = 0,565, Z = 1,82.

The value of the Laplace function at the rate of confidence 95% = 1.96. Therefore the value of Z is less than the value of the criteria, and the main hypothesis is accepted, i.e. the hypothesis about the independence of the "responsibility" factor selection from the size of the company.

Similar results were obtained for all factors of corporate culture. Thus, we can safely say that the selection of priorities among the corporate culture factors that affect the innovative activity doesn’t depend on the size of the company.

Similar results were obtained when testing the first hypothesis: it is fair to say that the priorities in the selection of innovative corporate culture factors does not depend on the companies’ field (type of business). In order to verify the hypothesis all companies have been divided into two enlarged samples: manufacturing and nonmanufacturing companies.

When testing the hypothesis about the dependence of the priorities in the selection of innovative corporate culture factors from the executive level of the respondents, all participants were divided into two large groups: 1) managers and specialists, 2) top-managers and business owners.

The hypothesis about the dependence of the selection from the executive level was not confirmed in any of the corporate culture factors. Thus, as the results of our pilot study, we can say that the selection of the priority factors of the innovative corporate culture does not depend on any demographic characteristics of the companies and the respondents. Thus all the hypotheses 1, 2 and 3 are true.

The third objective of the survey was the dependency check for the selection of the specific corporate culture factors and possible reduction of the factor space dimension. The solution of this problem was carried out on the basis of principal component method of the data factor analysis using the Statistica program (Gmurman V.Y,  2003]. The essence of the analysis is the partitioning of the factors for larger groups - components (Factor), inside of which there are factors that most often occur at the same time.

The most valid partition was obtained for the four components. The calculation of the factor loadings, that is, the values ​​of the correlation coefficients of each of the initial attributes for each component is shown in Table 5

By choosing the maximum in each row of the table, marked as *, we can determine which component should include this factor.

Thus, the factors can be divided into 4 groups of joint selection:

1. «Democratic style of management», «Mutual assistance and cooperation», «Justice».

2. «Transparency of goals», « Solidarity in values», «Optimism».

3. «Favorable working environment», « Project-team approach to objectives of development», «Self-esteem and self-realization».

4. «Absence of vertical functional barriers» and «Individual competition restriction».

“Well-run channel of communication and common ground rate with your chief” and "Responsibility" factors cannot be clearly associated with any of the aggregated groups.

We can say that the first group includes factors that characterize the relationships between employees and management, the second - mission and vision, the third – relationships with colleagues, and the fourth - the organizational structure. This allows to assume the possibility of reducing the number of factors in the performance of a larger study.

The next topic of this report is the presentation of our proven methods of company personnel innovative entrepreneurial activity development.

First of all, the company selects the initiative staff to be trained in creating, developing and implementing innovative business projects in their own company. We called this program “The corporate innovation university”. During the training the participants identify the problems of their organizations to transform them into the innovative business-project ideas; unite into business teams; develop conceptual design; make marketing plans and descriptions of their projects business processes; make an assessment of the resources needed and the stages of project implementation. During the next stage of training project teams collect data for commercial evaluation of their project business plans, calculate the project cost-effectiveness and risks, select a project financial scheme. During the third stage they present their business plans to the company management.

The business teams training is a necessary but insufficient condition for the business climate formation. The creation of innovative infrastructure is necessary, such as the Entrepreneurial Committee. It is a specially created advisory council to assess and support innovative business plans. It may include owners, executives, and internal and external experts. The Entrepreneurial Committee examines innovative business proposals and provide recommendations to the company management about the investment and support of the project implementation. (Zhuravlev A., Nestik T.A., 2011) As part of this report we would also like to tell you about the experience of corporate innovative training in one of the engineering companies in St. Petersburg. At the starting point of the innovative training project the organization provided the services on preparation drafts for the gas cleaning systems installation for various companies in St. Petersburg and other cities in the Russian Federation. The company staff was about 40 people and the total sales allowed to consider the company as a mid-sized.

During the first phase of the training some major problems of the company from the perspective of the owners and senior management were identified. Those included the primary activity sales dip trend, slow project orders execution, and low staff innovative activity. Those issues had to be considered when selecting employees’ innovative ideas.

During the second phase 16 of the most initiative employees, ready, according to direction, to promote and implement innovative ideas, were identified.

Then the staff practical training began, during which about 20 original innovative business ideas had been brought forward. Most of those ideas were directly related to the company major activity. They were about increasing the sales growth through the addition of a complementary activity or costs reduction on the ground of restructuration. However among the all innovative ideas there were some proposals about creating entirely new areas, such as the introduction of objects environmental diagnostics services or mini-kindergarten set-up. As a result of the ideas fair and the discussion with the company's management four business ideas were selected and four business teams consisted of training participants were formed.

Two selected projects were aimed to the sales increase through the introduction of a new activity: switching to the gas cleaning systems installation on a turnkey basis, it means not only developing a technical project, but also the delivery and installation of the equipment and state projects approval services. Two other projects were aimed to the structure and production technology changing. One of them suggested a creation of database of the technological units, used in the projects, and the other - a new department creation - project managers service in the frame of the whole organization.

During the second phase of training the business teams participants were provided with knowledge of marketing and business planning. As a result they finalized their innovative ideas in the form of rapid business plans.

During the third phase of training the participants were trained on the investment projects commercial evaluation, audited business plans data and calculated the investment attractiveness of their innovation projects.

As a training result the director and the owners of the company were provided with the projects presentations. Later on, 3 out of 4 projects have been implemented.

The project results include the strengthening of the team spirit, innovation activity, self-esteem and other employees estimation level.

  Appendix 1   Table 1. Number of companies by size

Big companies	Medium-size companies	Small companies
44	28	22

  Table 2. Number of companies by type of business

Production	Services	Trade	Finance
40	44	20	11

  Table 3 Number of respondents by job level

Managers and specialists	Top-managers	Owners
67	16	17

  Table 4 Total score for each factor

Factor Number	1	2	3	4	5	6	7	8	9	10	11	12	13
Score	72	42	53	60	61	68	63	43	13	61	24	69	64

  Table 5 Correlation between factors and components of method of principal components

	Factor 1	Factor 2	Factor 3	Factor 4
Transparency of goals	-0,00688	0,7167 *	0,216865	0,121021
Solidarity in values	0,100058	0,681764 *	0,0183	0,093553
Optimism	0,333419	0,54183 *	0,291435	-0,30321
Democratic style of management	0,797482 *	-0,11767	0,121938	0,022833
Well-run channel of communication	0,41341	0,018383	0,467962	0,314049
Favorable working environment	-0,04185	0,098933	0,809042 *	-0,01197
Mutual assistance and cooperation	0,690968 *	0,287297	0,016404	0,096427
Project-team approach to objectives of development	0,247828	-0,108	0,550444 *	0,211489
Individual competition restriction	0,09638	-0,05	0,202308	0,734471 *
Self-esteem and self-realization	0,046222	0,292233	0,629863 *	-0,04455
Absence of vertical functional barriers	0,070652	0,398717	-0,10187	0,66808 *
Justice	0,515071 *	0,374301	0,162526	0,077274
Responsibility	0,169445	0,285088	0,415945	0,037719

References

1. Gmurman V.Y., Theory of Probability and Mathematical Statistics.: Moscow, "High School", 2003

2. Jaruzelski B., Loehr J., Holman R. (2011), The Global Innovation 1000. Why Culture is Key?: Strategy + business (Booz & Company)

3. Zhuravlev A., Nestik T.A. Co-creation as a resource of the organization: state and prospects of research, Institute of Psychology, Russian Academy of Sciences, 2011.

4. Yeliseeva I.I., Yuzbashev М.М. General Theory of Statistics - Moscow: Finance and Statistics, 2004. - Chapter 11.

5. Lyapina S.V. Pervakova Y.Y. Snesareva Y.V. Corporate culture and innovation in the company. // Innovations N 12 (134) 2009. c 45-54

6. Pervakova Y.Y. The influence of corporate culture on productivity and business efficiency. Chapter 4 M: Maks Press 2012

7. Robbins S, Stephen P. Essentials of organizational behaviour. Prentice-Hall, Inc. New Jersey, 1994.