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Study: Corporate culture drives innovation

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Published: Nov. 24, 2008 at 10:35 PM

MINNEAPOLIS, Nov. 24 (UPI) -- Innovation -- integral to the growth, success and wealth of firms and nations -- is determined by corporate culture, U.S. researchers said.

Rajesh Chandy of the University of Minnesota's Carlson School of Management said what predicts the increase of radical innovation -- and the profits that often ensue -- is corporate culture.

"Firm level factors are more important than anything else -- even location -- in predicting radical innovation," Chandy said in a statement.

Chandy and co-authors Gerard Tellis of the University of Southern California and Jaideep Prabhu of Cambridge University show that among traditional drivers of innovation such as government policy, labor, capital and culture at the country level -- the strongest driver of radical innovation across nations is corporate culture.

The researchers also found that the commercialization of radical innovations is a stronger indicator of financial performance than other popular measures such as patents.

The study, published in the Journal of Marketing, found innovation appears to be a function of the degree to which a company fosters a supportive internal structure headed by product champions and bolstered by incentives. This is determined by the extent to which that organization is able to change quickly, keeping an eye on the markets of the future.

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