What makes an innovative Dutch SME? A KEYS to Organizational Creativity approach

This thesis empirically examines which KEYS to creativity (Amabile et al., 1996) in organizational culture and climate, leadership style, resources and skills and barriers to organizational creativity could be considered as the driving force behind the innovative capacity of SMEs in the Netherlands. By using a logit model to paint an initial portrait of 60 innovative Dutch SMEs as compared to 60 non or less innovative counterparts, this study hopes to aid to the complex puzzle why some firms are more innovative than others. This research tries to find answers to the aforementioned question by digging deeper into the complementary relationship between organizational creativity and innovation and proposes a conceptual framework by which the innovativeness of Dutch SMEs is determined by the higher levels of organizational creativity within the work environment. The logistic regression models indicate that the innovative Dutch SMEs are distinguishing themselves by their organizational encouragement to creativity, freedom and challenge in the arena of organizational culture and climate and supervisory encouragement as an important facet of their leadership style. Remarkably, the logit estimates further show that higher levels of resources lead to a lower probability of innovation to occur within Dutch SMEs. This result is also consolidated by the support for a optimal allocation of resources and skills in relationship to the innovativeness of Dutch SMEs. Combining these two results seems to indicate that the innovative SMEs in this study operate at the downward sloping side of the U-shaped curve where resources exhibit decreasing returns to the innovativeness of Dutch SMEs. Finally, an interesting and twofold finding of this thesis is the negative effect impeded by the confluence of organizational culture and climate and leadership style on innovativeness of Dutch SMEs.