How does organizational structure affect innovation in a global Chinese organization? The moderating role of collectivism and power distance
Innovation, the production of new and useful ideas, is an essential component of human adaptation and progress, as well as business success. Organizations attempt to foster the type of innovation that they want by creating organizational structures, such as centralization. Research shows centralization promotes innovation in China, while lowering it in the West. Organizations can also influence their innovation by creating structures to enhance their ability to absorb and utilize new knowledge (knowledge integration). However, there are still questions regarding how knowledge integration’s effects may vary between cultures. We examine these dynamics in a study of a large, multi-national, Chinese clean-energy company. Our findings indicate that organizational structures’ effect on innovation depends on the level of collectivism and power distance. Our research displays the significance of considering these cultural variables during attempts to foster innovation.