Exploring the Relationship between Organisational Culture and Innovation: A Study of Multinational Subsidiaries

Despite the vast research on multinational corporations (MNCs), little is known about entrepreneurship in the subsidiary, especially about the supporting culture in the subsidiary (Birkinshaw, 1997). This study was conducted... [ view full abstract ]

Despite the vast research on multinational corporations (MNCs), little is known about entrepreneurship in the subsidiary, especially about the supporting culture in the subsidiary (Birkinshaw, 1997). This study was conducted to examine the relationship between organisational culture and innovation in MNC subsidiaries in the Irish ICT sector. A survey was undertaken, with data collected using a self-administered web-based questionnaire. The survey data was analysed using hierarchical regression analysis to investigate the ability of selected organisational culture dimensions to influence the number of innovations implemented. We found that, with subsidiary age controlled, the cultural dimensions of support for change, risk-taking, and trust and openness had a significant impact on the total number of innovations implemented, measured across product, process, organisational and marketing innovation. In conclusion, this study, by closely examining specific organisational culture dimensions, sheds new light on the little recognised issue of innovation-supportive culture in subsidiaries.