Management by objective enhances innovation behavior: An exploratory study in global management consulting

• Author: Manfredi Bruccoleri,Francesca Riccobono
• Published date: 01 July 2018
• DOI: http://doi.org/10.1002/kpm.1577
• Date: 01 July 2018

RESEARCH ARTICLE

Management by objective enhances innovation behavior:

An exploratory study in global management consulting

Manfredi Bruccoleri |Francesca Riccobono

University of Palermo, Palermo, Italy

Correspondence

Manfredi Bruccoleri, University of Palermo,

DIID—Viale delle Scienze Edificio 8, Palermo

90128, Italy.

Email: manfredi.bruccoleri@unipa.it

The goal of this study is to explain the complex effect of management by objective

practices on employees' innovative behavior. Instead of considering individual goal

orientation and/or formal creativeness‐related goal assignment (as in the recent liter-

ature), the focus of this paper is on exploring whether the official adoption of manage-

ment by objective practices may foster employee innovative behavior. Basing on the

results of 2 exploratory interviews with 2 senior managers of 2 global consulting com-

panies, we build our conceptual model. We use a goal‐based view to this purpose.

Then, we test the model by using data collected by surveying 80 consultants

employed in 17 different management consulting companies. We find that a con-

scious motivational path links goal‐setting strategy to employee innovative behavior

through smart goals, whereas an unconscious motivational path links leader–follower

relationship quality to employee innovative behavior through an appropriate perfor-

mance appraisal strategy.

1|INTRODUCTION

Employee's creativity and innovation capabilities are imperative levers

of competitiveness for 21st century. As work tasks and jobs become

more knowledge‐intensive and less constrained in action, organiza-

tional learning can contribute significantly to the improvement of

organization's performance through increasing employees' ability to

generate ideas and use theseto generate and implement newand better

products, services, and business processes (Pemberton & Stonehouse,

2000); in order to generate continuous innovations, employees need

to be both willing and able to innovate (De Jong & Den Hartog, 2007).

Accordingly, recent literature has focused on identifying factors

that stimulate employees' innovative behavior (Anderson, Potočnik,

& Zhou, 2014; Shin, Yuan, & Zhou, 2016). However, the debate on

what these factors are is still open and studies have used a “goal”per-

spective to understand innovation behaviors (Wong, Tjosvold, & Liu,

2009). The literature that uses the goal lens investigates the impact

of individual goal orientation on individual innovative behavior. Indi-

vidual goal orientation means either learning‐goal orientation (the indi-

vidual will to develop competences) or performance‐goal orientation

(the individual tendency to show competences to external observers).

Apart from individual goal orientation, the literature analyzes how the

formal assignment of creativeness‐related goals to individuals

enhances their creativity (Shalley, 1995; Unsworth & Clegg, 2010).

Instead of considering individual goal orientation and/or formal

creativeness‐related goal assignment, in this paper, we are interested

in exploring whether the official adoption of management by objec-

tive—MBO—practices may foster employee innovative behavior. In

fact, according to organizational learning theory, setting clear and for-

mal goals for the learning process will foster organizational “genera-

tive”and “cognitive”learning, which is about building and developing

new products, services, ideas, and ways of doing business to gain a

competitive advantage (Pemberton, Stonehouse, & Yarrow, 2001).

MBO emerged in the 1950s and quickly gained popularity as a man-

agement fad; it continues to be implemented today, even if in differ-

ent managerial practices, such as quality circles and self‐managed

work teams (Gibson & Tesone, 2001). MBO first appeared during

the industrial economy era to support manufacturing companies'

objectives, such as increases in productivity and the reduction of

costs. Today, more than half a century since its introduction as a man-

agerial practice, the aims and processes of MBO have been revisited

and refocused on boosting employees' growth, value creation, learn-

ing, soft skills, problem solving, and creativity skills. It is thus worth

wondering: does MBO adoption in knowledge‐intensive business

Received: 1 June 2017 Accepted: 2 May 2018

DOI: 10.1002/kpm.1577

180 Copyright © 2018 John Wiley & Sons, Ltd. Knowl Process Manag. 2018;25:180–192.wileyonlinelibrary.com/journal/kpm