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

Abstract

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 intervening variable between OC and innovation. This study therefore, investigated the effect of OC on EPE and 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 the effect of training support on EPE and innovation was positive but 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 mediating effect between leadership and 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. Consideration of multiple organizational factors as opposed to a single factor to enhance innovation at micro level in their work place is hinted.