Relationship between Organizational Climate, Employee Psychological Empowerment and Innovation in Market Research Firms in Kenya

Abstract

The 21st century global business environment is bedeviled with fast changing technology, growing volatility, global competition, organization change, social conflicts, environmental degradation and high rate of unemployment among others. To overcome these challenges, nations and organizations need to hire creative and innovative employees. Innovation has been found to be one of the most critical tools in today’s fast changing environment that can enable nations, organizations, change managers, employees and society to overcome the many challenges and enhance the common good of the society. The purpose of the study was to find out the relationship between organizational climate (OC), employee psychological empowerment (EPE) and innovation in market and social research firms (MSRFs) in Kenya. This was motivated by inconsistent empirical findings of the previous scholars on the effect of organizational climate on innovation. Besides, it was inspired by the omission of the employee psychological empowerment as an intervening variable between OC and innovation. The study was anchored on four theories; organizational climate, intrinsic motivation, componential and leadership theories. We therefore first investigated the relationship of OC and EPE and then EPE on innovation. Further, direct effect of OC on innovation was also assessed. To address these objectives, this study used cross-sectional research design. The data was collected using a structured questionnaire and analyzed using Structural Equation Modelling (SEM). The study found that the effect of training support on EPE and innovation was insignificant while work place support on EPE had partial effect but insignificant effect on innovation. However, transformational leadership was found to be significant on both EPE and innovation. Further, the EPE had partial effect on innovation. The findings offer more insights to the theorists of intrinsic motivation that intrinsic motivation taps on some organizational climate factors to promote innovation. The results could be helpful to human resources practitioners and policy makers when deciding on a mix of organizational climate factors to promote innovation in institutions. The study hinted on the consideration of multiple organizational factors as opposed to a single factor to enhance innovation at micro level in their work place.