Interrelation Between Organizational Trust and Organizational Innovativeness from a Context Perspective

The paper explores the interrelation between organizational trust, which is defined as an attitude combined from affective and cognitive components (McAllister, 1995), and organizational innovativeness, an organizational  capability to create new ideas, experiment and engage in creative processes and which is operationalized as a five-dimensional construct consisting of product, market, process, behaviour and strategy innovativeness (Wang and Ahmed, 2004). We study the interrelation from the perspective of innovation context and take Lithuania as a case of a low innovation context and Finland as a high innnovation one according to Global Innovation Index 2013. The research problem we tackle is whether different components of organizational trust can result in different organizational capability to engage in creative and innovative processes.

 The empirical data for this study were collected by means of a standardised electronic questionnaire from 3 organizations in Finland (n=719) in 2011, and so far 4 organizations in Lithuania where a survey is still carried on since 2012 (current n=536, survey to be completed December 2013). Based on preliminary findings of regressional analysis, the emotional component of organizational trust has a much more significant effect on organizational innovativeness than cognitive one. Its affect on the dimensions of behavioural, process and strategic innovativeness exceeds its impact on market and product innovativeness. These findings imply that creativity may be malpracticed in organizational setting and more self-purposeful rather than result-oriented.

The research findings will have theoretical implications concerning the role of emotion to organizational innovativeness, discussing the need for golden mean in practicing organizational trust. From a managerial perspective, potential risks arising from high organizational trust and  certain dimensions of organizational innovativeness will be discussed considering the innovation context.