Is organizational culture an antecedent of firm's innovation?

The current importance of innovation as a source of competitive advantage has boosted interest in identifying its main determinants. Currently, one of the key elements both for enhancing or inhibiting innovation is considered to be organizational culture, depending on which values and behavior are encouraged. However, empirical research on this issue is still very scarce and has examined culture-related variables separately rather than as a whole by studying the effect of distinct cultural archetypes on innovation. The present study reviews previous literature and then analyzes the relationship between two types of organizational culture and innovation by using data collected from 446 Spanish firms. The findings show that there is a significant relationship between the type of organizational culture and innovation. In particular, adhocracy cultures have a positive effect while hierarchical cultures negatively affect innovation. Furthermore, we studied which characteristics of both adhocracy and hierarchy cultures had the greatest effect on innovation and found that the most important factor was the values shared by the firm's personnel. Finally, culture has a major influence in innovation when all the values composing that culture are internally coherent. Our findings contribute to the literature and have implications for practitioners. (c) 2011 ACEDE. Published by Elsevier Espana, S.L. All rights reserved.