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Creative climate
Creative climate and learning and organization
organization factors: their factors
contribution towards innovation
639
Meriam Ismail
Private Education Department, Ministry of Higher Education, Malaysia Received November 2003
Revised July 2005
Accepted July 2005
Abstract
Purpose – The purpose of this study is to explore the effects of two independent variables, creative
climate and learning organization, on innovation separately and simultaneously.
Design/methodology/approach – The methodology used was multiple regression analysis
executed on the data collected. Apart from that, the study also used T-tests to compare the means
of variables between the randomly selected local organization and MNCs. ANOVA was also conducted
to compare the means of the variables between three different employee categories of job levels,
namely the top, middle/lower management and supporting staff.
Findings – The results indicated that both learning culture and creative climate contributed 58.5
percent to the explanation of the observed variances in the innovation construct. The learning
organization culture separately was found to have a significantly stronger relationship with
innovation (r ¼ 0.733) than did the organizational creative climate (r ¼ 0.473). This implied a larger
contribution from the learning organization variable towards innovation. The findings also showed
that there were no significant differences in the mean scores (P . 0.05) among the three organizational
job levels included, namely the top management, middle/lower management and staff, in the members’
perceptions of innovation, creative climate and learning culture. The study also found no significant
differences in the mean scores (P . 0.05) among the small, medium, large and very large
organizational population sizes in the members’ perceptions on innovation, creative climate and
learning culture.
Originality/value – The study involved a sample of 18 private organizations selected at random
from a list of 165 organizations across various core businesses. The instrument used for innovation is
developed by the researcher, validated by post hoc factor analysis involving 259 respondents.
Keywords Creative thinking, Working practices, Learning organizations, Strategic leadership
Paper type Research paper

Introduction
Having a creative working climate (or environment) within an organization which
relates to a suitable working culture facilitating an environment that will enhance
organizational power is an idea that has been put forward during the middle 1980s and
late 1990s by several scholars such as, Ekvall et al. (1983), Ekvall and
Tangeberg-Anderson (1986), Zain (1995), Zain and Rickards (1996) and Amabile and
Conti (1999). Organizational climate is regarded as an attribute of the organization, a
conglomerate of attitudes, feelings and behaviors which characterize life in Leadership & Organization
organizations and exists independently of the perceptions and understandings of the Development Journal
Vol. 26 No. 8, 2005
members of the organizations (Ekvall, 1996, p. 105). It is conceived as an organizational pp. 639-654
reality in an “objective” sense. Creativity on the other hand, is a thinking process which q Emerald Group Publishing Limited
0143-7739
helps generate ideas (Majaro, 1992). DOI 10.1108/01437730510633719
LODJ Research on innovation has also identified a number of human, social and cultural
26,8 factors which are crucial for effective operation of innovation at the organizational
level (OECD, 1997). These factors according to OECD (1997) are mostly centered
around learning; it is learning by organizations as a whole (diffusion of knowledge to a
broad range of key individuals within them) which is critical to an organization’s
innovative capabilities. By the end of the 1990s, the idea of learning at the
640 organizational level and knowledge management had been closely linked to innovation
(Argyris and Schon, 1978; Drucker, 1988; Garvin, 1993; Nonaka and Takeuchi, 1995;
Watkins and Marsick, 1996). This stream of research, also called the
neo-Schumpeterian approach, stems from earlier scholars such as Polyanyi (1966)
and Nonaka (1991) who view innovation in terms of an interaction between market
opportunities and the organization’s knowledge base and capabilities. A learning
organization is a system in the organization that is capable of changes that require
members to act upon the change and which needs learning to do so. It is one in which
learning and work are integrated in an ongoing and systematic fashion to support
continuous improvement; this learning will have to occur at all levels within an
organization, individual, group, organization and global (Watkins, 1996, p. 91).
Innovation on the other hand is the process of creating commercial products (or
services) from inventions. It includes both technological and non-technological
innovation. The non-technological innovation discussed in the present study is focused
on organizational innovation. It is included together with technological innovation (TI)
since organizational innovation occurs as part of TI, according to Damanpour and
Evans cited by Van de Ven and Angle (1989).

Objective of the study

The general objective of the present study was to determine the levels of creative
climate factors and learning organization factors based on the perceptions of the
employees from participating organizations, to observe their relationships and
examine any contribution of those factors to the explanation of the observed variances
in innovation within the organizations concerned. These included local organizations
and multinational corporations (MNCs).

Definition of terms
Technological innovation comprises of implemented technologically new products and
processes and significant technological improvements in products and processes
(OECD, 1997, p. 47). The term “implemented” here means introduced on the market
(product/service innovation) or used within a production process (process innovation).
The sub factors within this TI component are related to technology transfer (which
includes technology assimilation) and diffusion of innovation which facilitate TI.
Technological transfer is “the transmission of technology from those who possess it to
those who do not (within an organization)”. It involves the acquisition of technological
knowledge or know-how generated by one group or institution to be embodied in the
operations of the recipient organization. The technology could be tangible goods or
processes such as component parts or machinery or intangible know-how such as
advance knowledge of road building techniques and must be embodied into the
operations of the recipient organization.
 Technology assimilation is the acquisition, absorption and adaptation of Creative climate
technologies developed (through R&D or otherwise) outside of the firm (Wong et al., and organization
1999). Diffusion is the way TI is spread through market or market channels, including
different regions and to different industries/market and organizations (OECD, 1997). It factors
gives TI economic value. Hence, TI in this study is assessed by technology transfer and
diffusion factors.
Organizational innovation is a managerial innovation which includes the 641
implementation of advanced management techniques such as the quality assurance
program, International Standard for Organization (ISO 9000) or basic elements of TQM
within the organization for the purpose of developing significant improvement in the
production or delivery of goods or services (OECD, 1997, pp. 54-5). The basic pillars of
TQM are:
.
satisfying the customer;
.
effective management system/process such as ISO 9000 program;
.
teamwork practice; and
.
improvement tools for continuous improvement.

The component is being assessed by statements in the questionnaire relating to the ISO
9000 program implementation and its procedures. Justifiably, also for ease of use, the
term innovation which is widely referred to in this paper includes the two major
constructs of innovation namely TI and organizational innovation.

Statement of the problem

It is widely acknowledged despite achieving considerable success economically,
innovation practices in Malaysian private organizations still remain relatively
under-researched (Zain and Rickards, 1996; MASTIC, 1996). This statement is also
supported by Sta. Maria (2000) and Khairuddin (1999). Axtell et al. (2000) contend that
there is a large literature on creativity in general, but little relating to innovation per se.
Even though there has been a huge volume of research on innovation, with 3,085
publications on the diffusion of innovation out of which 2,297 are empirical works
(Rogers, 1983), surprisingly, good models and principles on innovation have yet to be
developed (Zairi, 1994). Thus the present study addresses the need for more work on
linking creative climate factors in order to analyze their influence on innovation within
the Malaysian organizational context.

Methodology
This particular study aimed to explore the effects of two independent variables,
creative climate and learning culture on innovation separately and simultaneously.
With that, a multiple regression analysis was executed on the data collected. This
analysis also made it possible to identify which individual factors of the independent
variables have significant influence on innovation. Apart from multiple regression
analysis, the study used T-test to compare the means of the variables between the
randomly selected local organization and MNCs. The study also used analysis of
variance (ANOVA) in an attempt to compare the means of the variables between the
three different employee categories of job levels within the organizations concerned,
namely the top management, middle/lower management, and supporting staff.
LODJ Sample
26,8 Eighteen sample organizations were obtained through random selection from a list of
165 private organizations within the city of Kuala Lumpur which had acquired ISO
9000 series. The respondents comprised of employees having at least an A-level or
equivalent academic qualification were selected through convenient sampling by the
organizations’ representatives. A total of 467 employees from three major levels of
642 employment namely top/senior management, middle/lower management/supervisory,
and the technical/administrative support staff were selected. Usable responses were
obtained from 259 respondents (56.5 percent).

Research instrument
A self report questionnaire was used for this study which consisted of four component
sections. The first section which included a total of 50 items, contained statements
regarding respondents’ perceptions of organizational creative climate factors.
The second section contained items measuring the perceptions of respondents to the
learning culture dimensions. There were 43 items covering the seven dimensions.
The third section contained items measuring the respondents’ perceptions of the extent
of innovation construct. This construct contained a total of 32 items. Finally the fourth
section sought biographical information from respondents.
The section measuring organizational climate factors was the creative climate
questionnaire (CCQ) developed by Ekvall et al. (1983). The ten factors of the CCQ were:
(1) challenge/motivation;
(2) freedom;
(3) idea support;
(4) liveliness/dynamism;
(5) playfulness/humour;
(6) debates;
(7) trust/openness;
(8) conflicts;
(9) risk taking; and
(10) idea time.

The items consisted of statements which required respondents to determine the degree
to which the statements were true of the organizational creative climate occurring in
their organization. The four-point scale representing each statement was from 0 to 3. The
“0” represented a degree equivalent to “not at all applicable”, the “1” represented
“applicable to some extent”, the “2” represented “fairly applicable” and the “3”
represented “applicable to a high degree”. The CCQ was selected for usage in this case
study over other instruments because of the range of factors covering creative climate
within an organization, both stimulating and hampering innovation. It was also selected
because the factors were said to explain effects on productivity, job satisfaction, profit,
quality, innovation, and well-being which in turn would give performance impact on the
organizational resources both human and non-human (Ekvall, 1996). The CCQ has also
previously been applied in research both in Europe and Asia, in particular in a study
involving Swedish, German and Spanish organizations.
 The section measuring learning organization dimensions used the dimensions of Creative climate
learning organization questionnaire (DLOQ) developed by Watkins and Marsick and organization
(1996). The seven dimensions of learning organization with the relevant items were:
(1) continuous learning;
factors
(2) dialogue and inquiry;
(3) team learning; 643
(4) embedded systems;
(5) empowerment;
(6) system connections; and
(7) provide leadership.

In total there were 43 items for the seven dimensions. Within this, the instrument
requires the respondent to determine the degree to which the statement reflects the
approach practiced in the organization. Each statement was measured on a scale of
1-6 ranging from “1” representing “almost never” to “6” representing “almost always”.
The DLOQ was selected for usage in this study because it had been widely used in
innovation research in Malaysia and in the USA besides other parts of the world. It has
proved to be a reliable measure of learning culture.
The third section focused on innovation and contained two main constructs namely:
(1) TI (technological transfer, and diffusion of innovation); and
(2) organizational innovation focusing on basic elements of TQM and quality
assurance program such as ISO 9000 certification.

There were 32 items to cover the two constructs. The 32 items on the two constructs of
TI (24 items) and organizational innovations (8 items) were developed for this study
based on the guidelines provided by OECD (1997) and MASTIC (1996).The statements
required the respondents to determine the degree to which a statement is true. All the
items used rating scales on a continuum of 1-6.
The final part of the questionnaire contained biographical information on the
respondents. This included gender, age in years, job category, education background,
tenure of service with the organization, and the length of organization establishment in
years and total organization population size. This section contained eight items.

Measures
The following presents reliability estimates for each of the ten factors of the CCQ and
each of the seven dimensions of the DLOQ based on the pilot tests. The original
estimates of the CCQ were determined by Ekvall (1996). The Cronbach as for each of
the CCQ factors obtained from the pilot test in the present research were
challenge/motivation (0.78), freedom (0.68), idea support (0.83), liveliness/dynamism
(0.76), playfulness/humour (0.74), debates (0.78), trust/openness (0.55), risk taking
(0.68), idea time (0.72), and conflicts (0.61). The overall reliability for 50 items of the
CCQ was 0.94. The reliability estimates for the seven DLOQ dimensions were
continuous learning (0.83), dialogue/inquiry (0.89), team learning (0.87), embedded
systems (0.81), systems connection (0.88), empowerment (0.90), and strategic
leadership (0.92). The overall reliability of the learning organization variable
LODJ was 0.97. The overall reliability estimate for the overall innovation was 0.98. The three
26,8 constructs have proved consistently reliable with all the scales above the recommended
0.70 (Nunally, 1978).

Post hoc factor analysis for the innovation items

To test whether the 32 items were appropriately constructed and used in the study
644 based on the reliability indices of the pilot test as well as based on the validation by the
two experts, a post hoc factor analysis was conducted on the items using the overall
respondents’ (N ¼ 259) responses to the instrument. The results of the analysis using
the rotation method, Varimax with Kaiser Normalization are presented in Appendix.
The factor analysis shows that the items were categorized into three components
where 13 items in component 1 were related to “technology transfer” followed by
11 items in component 2, closely related to “diffusion of innovation”. These 24 items
appropriately came into the TI category as was earlier decided. Finally, the last eight
items which fell into component 3 were justifiably representing organizational
innovation.

Analysis
The analysis procedures conducted were in line with the research questions being
posed. Before the data were analyzed, an exploratory data analysis EDA was
conducted. From the EDA it was found that both assumptions of normality and
homogeneity of variance were met for all the three variables. Following this,
collinearity diagnostics were conducted to examine whether the two independent
predictor variables, organizational climate for creativity and learning organization
dimensions were highly correlated. In examining the data for collinearity for N ¼ 259,
the analysis revealed that the two predictor variables have low collinearity (r , 0.45).
The research questions posed are as such:
RQ1. How does each of the ten factors of the creative climate variable relate with
the innovation construct in the sampled organizations?
RQ2. How does each of the seven dimensions of the learning organization variable
relate with the innovation construct in the sampled organizations?
RQ3. How do the differences in the members’ perceptions on creative climate, the
learning organization culture and innovation, among the employees compare
between the local organizations and the MNCs?
RQ4. What are the differences in the members’ perceptions on creative climate,
learning culture and innovation among the three levels of employee groups in
the sampled organizations?
RQ5. Is there any difference in the members’ perceptions on creative climate,
learning organization culture and innovation between small, medium, large
and very large sized organizations within the sampled organizations?
RQ6. To what extent do the factors of both creative climate and learning
organization variables jointly explain members’ perceptions on the observed
variances in innovation in the sampled organizations?
 RQ7. How much of the observed variances in the overall innovation construct are Creative climate
explained by the highly predictive factors identified under the reduced model and organization
and how good is the reduced model compared to the full model?
factors
RQ8. How do the factors from the creative climate, learning organization culture
jointly explain observed variances in the members’ perceptions on innovation
in the local organizations?
645
RQ9. How do the factors from the creative climate, learning organization culture
jointly explain observed variances in the members’ perceptions on innovation
in the MNCs?

Findings
The sampled organizations vary according to core businesses (from manufacturing,
telecommunication, finance and insurance, consulting, property developer, education
services, and engineering), population size and status. Thirteen organizations were
locally owned (and registered) while the rest were MNCs (Japanese, French, US and
British owned). Three organizations were small sized with 100 or less total employees,
one large with the number of employees between 1,000 but less than 1,999 people and
one very large sized with more than 2,000 employees. The remained were medium
sized with more than 100 but less than 1,000 employees.
From the total 259 respondents, 52.5 percent were males while 47.5 percent females.
While in the foreign MNCs organizations, 39 or 49.4 percent were males and 40 or 50.6
percent were females; the respondents from the local organizations, 97 or 53.9 percent
were male while 83 or 46.1 percent were female. Out of the sampled population of 259,
less than 1 percent or only 2 persons of the respondents were more than 51 years of age
while the remainder were below 50 years old. In addition almost half of the total
respondents (46.3 percent) were those whose tenure of work were less than five years.
More than half of the total respondents (52.1 percent) have acquired bachelors degrees
and above.

Relationship between creative climate and innovation

From the correlation analysis carried out, it was observed that each of the ten factors of
the creative climate variable shared a significant ( p , 0.05) but low relationship with
innovation (r , 0.4), with the factor “Challenge” having the strongest relationship
(r ¼ 0.475). The overall relationship of the creative climate variable was r ¼ 0.473.
When the factors are regressed with innovation it was found that about 35 percent
significant contribution on innovation was accounted for by the creative climate
factors alone. This address RQ1.

Relationship between learning organization dimensions and innovation

In addressing RQ2, it was found that all of the seven dimensions have significant
moderate (r . 0.5) to high (r . 0.7) relationships with innovation. When the
dimensions of the learning organization were regressed with innovation, it was
observed that about 57 percent of the contribution towards innovation were accounted
for by the learning dimensions. As a check and balance, a post hoc factor analysis using
the rotation Varimax was conducted involving 43 items of the learning organization
variable (seven dimensions) and 32 items (three constructs) of the innovation construct
LODJ to observe whether the high correlation between the two variables (r ¼ 0.733) had
26,8 anything to do with the items of either variables are actually similar in nature. The
factor analysis showed that the 32 items of the innovation construct were grouped into
two components, undoubtedly, TI (technology transfer and diffusion of innovation)
and organizational innovation. While the 43 items of the learning organization variable
fell into another seven components but each component having different number of
646 items (details of the analysis are provided in Appendix).
A similar factor analysis was conducted involving the 50 items of the CCQ and the 32
items of the innovation questionnaire and the findings showed that the 50 items of the
CCQ fell into different components from the two components of the innovation items. At
the same time all the 93 items (43 of LO and 50 of the CCQ variables) were again analyzed
using factor analysis in order to observe the grouping of the items, whether they either of
the 93 items share similarities. The findings from the analysis using rotation Varimax
with Kaiser Normalization showed that 43 items were grouped into one large component
while the 50 items of the CCQ were grouped into another different large component.
Thus, it can be inferred from the findings that the 43 LO items and the 50 CCQ items did
not share similarities and were not highly correlated with each other.

Comparing creative climate, learning culture and innovation between local organizations
and MNCs
Three T-test analyses were conducted to compare the members’ perceptions of
organizational creative climate between local organizations and MNCs, members’
perceptions of learning organization between local organizations and MNCs, and the
members’ perceptions of innovation between the local organizations and MNCs. The
results showed that there was no significant difference in perceptions of creative
climate (P ¼ 0.266). Similarly no significant differences were observed in members’
perceptions on learning culture (P ¼ 0.753) as well as innovation (P ¼ 0.934) between
the local organizations and MNCs. This give indications that the creative climate, the
learning culture and innovation in the local organizations were more or less the same
with those in the MNCs. This addresses RQ3.

Comparing creative climate, learning culture and innovation among the three
organizational job levels and organizational size
Two ANOVAs were conducted. One was to determine any significant differences
among the three groups of employee job levels, i.e. top, middle and staff in their
perceptions of creative climate, learning culture and innovation. The other analysis
was carried out to determine any significant differences in members’ perceptions of
creative climate, learning culture and innovation among the small, medium, large and
very largely populated organizations.
Findings from the analyses revealed that there were no significant differences
among the three employee job levels in creative climate (P ¼ 0.545), in the learning
organization (P ¼ 0.267) and in innovation (P ¼ 0.793). Similarly, there were no
significant differences among the small, medium, large and very large sized
organizations in creative climate (P ¼ 0.332), in learning culture (P ¼ 0.347) and in
innovation (P ¼ 0.703). Results from the ANOVAs indicated that the creative climate,
learning culture and innovation were equally perceived by the three groups which
indicated that all employees share similar ideas on creative climate, learning culture
and innovation in each organization. Similarly, all employees in either the small, Creative climate
medium, large or very large sized organizations seemed to perceive creative climate,
learning culture and innovation similarly in their organizations. This explanation
and organization
addresses RQ4 and RQ5, respectively. factors
Interaction of creative climate and learning culture factors on overall organizations
In addressing RQ6-RQ9, multiple regression analyses were conducted. A regression 647
analysis was conducted involving both sets of the independent variable and their
17 factors together to determine the joint contribution of both variables on the observed
variances in innovation.
The analysis revealed that the 17 factors together have significant contribution of
58.5 percent (R 2 ¼ 0.585, F ¼ 19.980, P ¼ 0.000) to the observed variances in
innovation. This addresses RQ6. The results are shown in Tables I and II.
Three factors from the learning organization were identified as the factors having
high predictive powers. This result was obtained by conducting stepwise multiple
regression analysis. A similar result was obtained when a forward multiple regression
was conducted where the three factors identified in hierarchical order were “Embedded
Systems” (b ¼ 6.120, P ¼ 0.000), “Systems Connection” (b ¼ 0.313, P ¼ 0.000), and
“Continuous Learning” (b ¼ 0.125, P ¼ 0.035). With this finding, the regression
equation for the full model is obtained. Using the stepwise multiple regression results,
the equation of the model obtained is:
Innovation ¼ 29:370 þ 2:055ðEmbedded systemÞ þ 1:608ðSystem ConnectionÞ

þ 0:622ðContinuous learningÞ:
In determining whether the reduced model is as good as the full model, the three factors
with high predictive powers together with the ten factors of the creative climate were
regressed with innovation variable. The findings showed that the 13 factors
contributed as much as 58.0 percent (R 2 ¼ 0.580, F ¼ 26.005, P ¼ 0.000) to the
explanation of the observed variances in innovation. A test was conducted to confirm
that the reduced model was almost as good as the full model. This addresses RQ7.

Std. error of
Model R R2 Adjusted R 2 the estimate

Factors from both sets of CCQ and LO variables 0.765 0.585 0.556 19.76
Note: Model summary of the multiple regression analysis of both sets of the independent variables,
creative climate and learning organization with innovation Table I.

Table II.
Model Sum of squares Df Mean square F Sig. ANOVA – creative
climate factors and
CCQ and LO factors Regression 132616.6 17 7800.979 19.980 0.000 learning organization
Residual 94096.553 241 390.442 dimensions with
Total 226713.2 258 innovation
LODJ Interaction of creative climate and learning culture factors on local organizations and
26,8 MNCs
A third regression analysis followed by the fourth regression were conducted to
determine the extent of the joint contribution of both sets of the independent variables
to the explanation of the observed variances in innovation for the 13 local
organizations and for the five MNCs, respectively. It was found that 60.2 percent
648 (R 2 ¼ 0.602, F ¼ 14.427, P ¼ 0.000) of the factors have significant contribution to the
explanation in the observed variances in innovation for the local organizations and 67.6
percent (R 2 ¼ 0.676, F ¼ 7.476, P ¼ 0.000) to the explanation for the MNCs. The
findings are shown in Tables III-VI, respectively.
The factors “Systems Connection” (b ¼ 0.045, P ¼ 0.000) followed by “Embedded
Systems” (b ¼ 2.961, P ¼ 0.004) were identified as having high predictive powers on
innovation for the local organizations, while “Strategic Leadership” (b ¼ 0.422, P ¼ 0.007)
followed by “Team Learning” (b ¼ 0.338, P ¼ 0.044) were identified to be highly
predictive of innovation for the MNCs. Additionally, there were two creative climate
factors as well, namely “Challenge” (b ¼ 0.302, P ¼ 0.037) and “Debates” (b ¼ 0.287,
P ¼ 0.046). It is interesting to note that none of the creative climate factors have influence
on innovation in the local organization but in the MNCs the situation was more balanced.

Std. error of
Model R R2 Adjusted R 2 the estimate

Factors from both sets of CCQ and LO variables 0.776 0.602 0.560 20.72
Note: Model summary of the multiple regression analysis of both sets of the independent variables,
Table III. creative climate and learning organization with innovation in the local organizations

Table IV.
ANOVA-creative climate Model Sum of squares Df Mean square F Sig.
factors and learning
organization dimensions CCQ and LO factors Regression 132616.6 17 6194.520 14.427 0.000
with innovation (local Residual 69559.495 162 429.380
organizations) Total 174866.3 179

Std. error of
Model R R2 Adjusted R 2 the estimate

Factors from both sets of CCQ and LO variables 0.882 0.676 0.585 16.60
Note: Model summary of the multiple regression analysis of both sets of the independent variables,
Table V. creative climate and learning organization with innovation in the MNCs

Table VI.
ANOVA – creative Model Sum of squares Df Mean square F Sig.
climate factors and
learning organization CCQ and LO factors Regression 35028.030 17 2060.472 7.476 0.000
dimensions with Residual 69559.495 61 275.620
innovation in MNCs Total 174866.3 78
The MNCs provided a challenging climate for their members and this suggests that the Creative climate
MNCs provided sufficient scope for members to generate novel solutions and the members and organization
in return, respond positively towards this environment (Ekvall, 1996). The members were
intrinsically rewarded by their need to seek achievements. A climate of “Debates” was also factors
present where the MNCs were practicing the exchanging of ideas verbally or otherwise
and interact into conversations more often among individual members or teams (Ekvall,
1996). This climate of “Debates” is expected to have a positive influence on “Team 649
Learning” and this was obviously so, as shown by the results above. In other words a
climate of “Debates” seemed to occur concurrently with the presence of “Team Learning”
which involved mastering the practices of dialogue and discussions. This is a common
feature for innovation. This addresses RQ8 and RQ9.
Conclusions
The results reported above show that there were no differences observed in members’
perceptions of creative climate, learning organization culture and innovation between
MNCs and local organizations. Additionally there were no differences in participants’
perceptions of creative climate, learning organization culture and innovation among
the three job levels in the sampled organizations. Finally, there were no differences in
participants’ perceptions on creative climate, learning organization culture and
innovation among the small, medium, large and very large sized organizations.
In summary, it can be concluded that for this particular study, the learning organization
variable with its seven dimensions makes a more significant contribution towards
explaining innovation than the ten factors of the organizational creative climate. However,
there was a considerable amount of significant contribution from the creative climate
factors towards innovation, about 35 percent when the multiple regression analysis was
done separately involving just the climatic factors. This showed that there was a certain
amount of creativity present within participants which contributed to innovation. This
creativeness was mostly generated by having a challenging environment (challenge) and a
climate of trust and openness (trust) present in the organizations. A climate of challenge
and motivation provides emotional involvement of the members of the organizations in the
operations and goals as what Ekvall (1996) has described. Giving employees opportunities
to find and solve challenging problems and implement solutions intrinsically rewards
their need for achievement. A climate of trust and openness provides emotional safety in
relationships where everyone in the organization dares to put forward ideas and opinions
in the presence of high level of trust (Ekvall, 1996).
The learning dimensions of “Embedded Systems”, “Systems Connection” and
“Continuous Learning” were also identified as having significant predictive powers on
innovation activities occurring within the organization as compared to the other four
learning factors. “Embedded Systems” means a systematic effort implemented by the
organizations to capture the intellectual capital of the individuals in a permanent
manner and is best done by capturing learning in the organizational memory (Watkins,
1996). By embedding knowledge and information into the organizational memory is to
take actions (without restructuring the norms) on any detection of errors, or any match
or mismatch identified by the individuals in the organization (Argyris and Schon, 1978)
for the improvement of the organizations’ core business. “Systems connection” means
scanning the organizations’ markets in the internal and external environments and be
able to adjust the working systems within the organization (make necessary changes)
to suit with the inside and outside requirements. “Continuous learning” means putting
LODJ emphasis on continuous individual learning of employees to upgrade their skills in
26,8 order to perform better at the tasks at hand.
The two creative climate factors “Challenge” and “Debates” and two learning
factors which were “Strategic Leadership” and “Team Learning” have considerable
significant influences on innovation in the MNCs, while only the learning organization
factors of “Embedded Systems” and “Systems Connection” have significant influences
650 on innovation in the local organizations. The local organizations were in general
lacking in the presence of creative climate compared to the MNCs.

Discussions and recommendation

The findings reflect the lack of influence of the eight organizational creative climate
factors (besides challenge and trust/openness) on innovation in the sampled
organizations (particularly in the local organizations), and the lack of influence of
four other learning dimensions (besides embedded systems, systems connection and
continuous learning) on innovation among employees in the organization. There was
no influence of creative climate factors on the local organizations which indicated that
the 13 local organizations did not precipitate the necessary creativity in individual
employees which was necessary for generating innovation. This suggests that the local
organizations should be looking into ways of improving organizational climate which
would encourage more creativity among employees by emphasizing the ten creative
climate factors. Changing the climate to one which is creative, is one of the most
difficult task to do for top management according to Majaro (1988) and Roffe (1999).
However, the local organizations should make efforts towards it.
Although the learning culture seemed to be contributing substantially towards the
innovation in the organizations, the organizations should be improving learning on these
areas: by giving emphasis in giving more empowerment to its members, and by
encouraging dialogue and inquiry to occur among the members. It is argued that the present
study can be developed further by examining the effects of the two sets of independent
variables on separate innovation constructs, TI and organizational innovation.

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652 Appendix 1

Technological innovation Organizational innovation

Items Factor 1 Factor 2 Factor 3

Technological transfer (assimilation)

1. Absorpcap5 0.790 0.204 0.230
2. Absorpcap6 0.728 0.265 0.358
3. Absorpcap4 0.727 0.377 0.109
4. Absorpcap9 0.723 0.396 0.197
5. Absorpcap2 0.722 0.250 0.347
6. Absorpcap8 0.715 9.207E-02 0.301
7. Absorpcap10 0.701 0.392 0.160
8. Absorpcap3 0.678 0.184 0.387
9. Absorpcap7 0.677 0.311 0.325
10.Absorpcap14 0.669 0.285 0.322
11.Absorpcap11 0.666 0.280 0.256
12.Absorpcap1 0.653 9.702E-02 0.416
13.Absorpcap13 0.577 0.486 0.323
Diffusion of innovation
14.Diffussion3 0.259 0.786 0.170
15.Diffussion2 3.683E-02 0.780 9.114E-02
16.Absorpcap17 0.136 0.751 0.242
17.Diffussion1 .279 0.744 0.239
18.Absorpcap19 0.338 0.642 0.294
19.Absorpcap16 0.200 0.624 0.192
20.Diffussion5 0.406 0.614 0.346
21.Absorpcap18 0.392 0.607 0.238
22.Diffussion4 .379 0.585 0.363
23.Absorpcap12 0.402 0.566 0.225
24.Absorpcap15 0.436 0.548 0.255
Organizational innovation
25.ISO2 0.284 0.264 0.823
26.ISO3 0.308 0.216 0.819
27.ISO1 0.283 0.305 0.794
28.ISO7 0.271 0.209 0.791
29.ISO6 0.384 0.201 0.776
30.ISO8 0.317 0.277 0.759
31.ISO4 0.277 0.349 0.749
32.ISO5 0.333 0.437 0.520
Eigenvalue 17.121 2.284 1.978
Table AI. Cumulative percent variance 53.502 7.139 6.182
Results of post hoc factor
analysis of the innovation Notes: N=259; Extraction method: principal component analysis; rotation method: Varimax with
construct Kaiser Normalization
Appendix 2 Creative climate
and organization
factors

653

Table AII.
Results of the post hoc
factor analysis for
learning organization
(LO) and innovation
items (N ¼ 259)
LODJ
26,8

654

Table AII.