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Innovation is Not Enough: Climates for Initiative and Psychological Safety, Process Innovations, and Firm Performance

Authors:
  • NUS Business School and Leuphana University Lüneburg

Abstract

This paper contributes to the discussion on contingencies of process innovations by focusing on and introducing organizational-level constructs of climate for initiative and psychological safety. We argue that process innovations, defined as deliberate and new organizational attempts to change production and service processes, need to be accompanied by climates that complement the adoption and implementation of such innovations. Our study of 47 mid-sized German companies examines the relation between process innovations, climates for initiative and psychological safety, and firm performance. Results show that climates for initiative and psychological safety were positively related to two measures of firm performance—longitudinal change in return on assets (holding prior return on assets constant) and firm goal achievement—and moderated the relation between process innovations and firm performance. Copyright © 2003 John Wiley & Sons, Ltd.
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Innovation is not enough: Climates for initiative and psychological safety, p...
Markus Baer; Michael Frese
Journal of Organizational Behavior; Feb 2003; 24, 1; ABI/INFORM Complete
pg. 45
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... Psychological safety has been found to increase performance (Baer and Frese, 2003;Edmondson, 1999) and has a direct impact specifically on task performance (Hirak et al., 2012). Further, when employees have periods of poor performance, they feel more comfortable seeking feedback when the workplace is psychologically safe (Schaubroeck et al., 2011). ...
... We showed that psychological safety plays a positive role in explaining the relationship between ethical leadership and wellbeing in high-demand hierarchical workplaces, which addresses a knowledge gap in the literature. Previous research acknowledges that the quality of an employee's relationship with their direct leader has a critical influence on perceptions of psychological safety (Baer and Frese, 2003;Edmondson, 1999;Kahn, 1990); however, few studies have established a direct link between leadership behaviors and psychological safety in hierarchical working environments. Our findings add to the literature that has found relationships between ethical leadership, psychological safety and wellbeing outcomes. ...
... For organizations, improving revenue and sales growth is of upmost importance, and revenue is a key performance indicator in many organizations. Psychological safety has been shown to play a pivotal role in organizational performance (Baer and Frese, 2003;Collins and Smith, 2006) and the results from this study are in line with these findings which show that ethical leadership positively influences self-reported performance through psychological safety in highdemand, hierarchical working environments. By improving employee wellbeing, through the development of psychologically safety, ethical leadership could make a significant impact on the organization's bottom-line. ...
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... But not all working environments feel safe enough for people to voice their concerns without fear of losing out on career opportunities or being socially sanctioned (Edmondson, 1999;Baer & Frese 2003). In a psychologically safe environment, team members feel free to seek and take on board feedback and engage in discussions that also include talking about mistakes which, all in all, lead to better job performance as well as possibilities of learning (Edmondson, 1999;Baer & Frese, 2003;Carmeli et al., 2014). Understanding mistakes not as failures but as chances to learn is only possible if people are allowed to admit their failures without fear (Pinnow, 2005;Hirak et al., 2012). ...
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