Organizational innovativeness and its determinants in South Korean nonprofit human service organizations

• Author: Young Keun Choi,Junseob Shin
• DOI: http://doi.org/10.1002/nml.21359
• Date: 01 September 2019
• Published date: 01 September 2019

RESEARCH ARTICLE

Organizational innovativeness and its determinants

in South Korean nonprofit human service

organizations

Junseob Shin

1

| Young Keun Choi

2

1

Department of Social Welfare, Konkuk

University, Chungcheongbuk-do, South Korea

2

Department of Business Administration, Konkuk

University, Chungcheongbuk-do, South Korea

Correspondence

Young Keun Choi, Professor, Department of

Business Administration, Konkuk

University, 268 Chungwondaero Chungju-

si, Chungcheongbuk-do 380-701, South

Korea

Email: ykchoi@kku.ac.kr

This study compares the level of organizational innova-

tiveness and its determinants in different types of non-

profit human service organizations. Based on theoretical

conceptualizations of organizational innovation, it was

hypothesized that community service organizations

(CSOs) would be more innovative than residential service

organizations (RSOs), and determinants of organizational

innovation (such as organizations' characteristics, internal

and external properties, and executive leadership) would

influence innovativeness. Data from a survey of two types

of human service organizations in South Korea (127 RSOs

for children and 220 CSOs) revealed that the level of

innovation in both types of organizations was not signifi-

cantly different. The determinants of decentralization and

formalization showed significant impacts on innovative-

ness in CSOs. Decentralization also had a significant posi-

tive effect on innovativeness in RSOs. However,

executive leadership was a significant determinant of

organizational innovativeness in CSOs only. Based on

these results, administrative implications are suggested for

the facilitation of organizational innovation in nonprofit

human service organizations.

KEYWORDS

executive leadership, innovation, nonprofit human

service organizations, organizational innovativeness,

South Korea

Received: 21 August 2018 Revised: 1 March 2019 Accepted: 5 March 2019

DOI: 10.1002/nml.21359

Nonprofit Management and Leadership. 2019;30:51–68. wileyonlinelibrary.com/journal/nml © 2019 Wiley Periodicals, Inc. 51

1|INTRODUCTION

Innovation is seen as an important tool for a better future in all areas of society. Accordingly, organi-

zational innovation, which is the adoption and implementation of new and creative ideas at the orga-

nizational level (Amabile, 1988; Sethia, 1993; Zaltman, Duncan, & Holbek, 1973), has become a key

strategy enhancing an organization's ability to achieve its goals. Earlier studies (Damanpour, 1991;

Drucker, 1985; Kimberly & Evanisko, 1981; Zaltman et al., 1973) argue that innovation improves

the performance of organizational activities. These benefits have been particularly emphasized by

profit-making organizations and are reflected in a recent study by Christensen (2013), who created

the term “disruptive innovation”to emphasize the importance of organizational innovation. For

Christensen, disruptive innovation involves making fundamental changes while creating new markets

and values through new technologies, products, and business models. Thus, disruptive innovation

has a clear advantage over sustaining innovation, which represents a strategy to continuously improve

existing products and services (Christensen, 2013; Christensen, Raynor, & McDonald, 2015). To

facilitate innovation in business firms, the CEO's intrinsic characteristics were defined according to

five discovery skills (i.e., associating, questioning, observing, experimenting, and networking) that

distinguished them among their peers (Dyer, Gregersen, & Christensen, 2009).

The benefits of organizational innovation have also sparked efforts to find out how organizations

can achieve innovation. Early studies reported that organizational characteristics such as age

(Pierce & Delbecq, 1977), size (Kimberly & Evanisko, 1981), centralization and formalization

(Damanpour, 1991; Hage & Aiken, 1970; Kimberly & Evanisko, 1981; Pierce & Delbecq, 1977;

Zaltman et al., 1973), leadership (Amabile, 1988; Drucker, 1985; Van de Ven, 1986), and competi-

tiveness in the external environment of the organizations (Kimberly & Evanisko, 1981) were determi-

nants of organizational innovation. For instance, organizational centralization is seen as a restricting

factor for innovation. That is, when authority and decision-making are concentrated at the top of an

organization's management hierarchy, the channels of communication are restricted, and information

available for activating new ideas is reduced (Kimberly & Evanisko, 1981). Following organizational

rules and procedures may also result in formalization inhibiting creative ideas among organizational

members (Zaltman et al., 1973). Concerning leadership, organizational innovations are typically

driven by vision setters who experiment with new concepts and processes while studying the emerg-

ing social and economic trends (Shin & McClomb, 1998). Similarly, Jaskyte (2004) reported that

such leadership was associated with challenge-seeking, staying up to date, challenging the status quo,

and looking for ways to innovate. Recent studies have reported similar determinants of organizational

innovation, including organizational characteristics (Jaskyte, 2013; Solomons & Spross, 2011), lead-

ership (Bozic & Mohnen, 2016; Damanpour & Schneider, 2006; Fay, Shipton, West, & Patterson,

2015; Jaskyte, Amato, & Sperber, 2018; Makri & Scandura, 2010), and the environmental context

(Damanpour & Schneider, 2006; De Vries, Bekkers, & Tummers, 2016; Rogers, 2005; Wisdom,

Chor, Hoagwood, & Horwitz, 2014).

The benefits of organizational innovation apply equally to nonprofit human service organiza-

tions. With their high dependence on the external environment for legitimacy and funds

(Hasenfeld, 1983; Patti, 2000), organizations must always actively engage with the needs of

important stakeholders such as clients and their families as well as representatives of communi-

ties, funding sources, governments, and so on. As such, innovation in the human service organi-

zation can be of greater importance and value than in other social organizations (Drucker, 1995;

Mano, 2010). Because of this importance of organizational innovation for nonprofit human ser-

vice organizations, studies have investigated and reported determinants of innovation including

52 SHIN AND CHOI