Arguments in favor for the concept
Arguments opposing the concept
Creativity and Innovation in Economics - Outline
The following paper will analyze the positive as well as negative impacts of creativity and innovation management on organizational structures. In doing so, the necessary terminology and definitions of concepts and terms of economics and organizational creativity are introduced. Based upon this background, positive and negative arguments are delivered. The positive argumentation will be characterized by argumentation deriving from concepts of diversity and intersections. It will be concluded that these aspects foster the mutual adjustment that generates net value. The negative arguments build upon this argumentation and point out the dangers of creative abrasion, conflict and organizational risk. The conclusion will show that, while creativity inherently entails the risk of economic inefficiency, it fosters communicative potentials within an organizational structure that can lead to an increase in value.
Creativity and Innovation in Economics
Often creativity and innovation are considered the crucial success factors for business development. The challenge to harvest creative energy is rooted in the communicative and intersecting character of economics itself. This paper will analyze the positive as well as negative impacts of creativity and innovation management on organizational structures. The conclusion will show that, while creativity inherently entails the risk of economic inefficiency, it fosters communicative potentials within an organizational structure that can lead to an increase in value.
To discuss the effects of creativity and innovation within the fields of economics, the terms economic efficiency, wealth and value have to be defined first. Economic efficiency, as defined by Heyne, focuses the surplus generated through additional benefits outweighing the additional costs (Heyne / Boetke / Prychitcko, 2014:23). However, the evaluation of benefit greatly depends upon the perception of wealth. In general, wealth is created through the allocation of value (Heyne / Boetke / Prychitcko, 2014:20).
Within a next step, the effects of creativity and innovations on organizations have to be analyzed to identify an increase in value. To achieve this result creativity and innovation have to be defined and differentiated. Amabile defines creativity as “the development of ideas about product, practices, services or procedures that are novel (unique) and potentially useful (having a direct or indirect value) to the organization (quoted in Razdulzada, 2007:5). Innovation on the other hand can be defined as the implementation or utilization of creative outcomes (e.g. novel and potentially useful products, services, practices and procedures) (Ford 1996 quoted in Razdulzada, 2007:5). This leads to the realization that creativity is an essential cornerstone for innovation. This innovation, however, has to be utilized within organizations.
Therefore, Organizational Creativity has to be addressed as well: Essentially Organizational Creativity is defined as “any business entity whose main source of income comes from the production of novel and appropriate ideas, processes, products or services to tackle clients’ problems or opportunities identified” (Adriopoulos & Lowe, 2000:734 quoted in Razdulzada, 2007:5). Here the aspect of the accumulation of value comes into play.
Arguments in favor for the concept
How then is this additional value created? Heyne points out that economics rely upon “a process of continuing mutual adjustment to the changing net advantages that their actions generate” (Heyne, 2014:7). Within the literature of organizational creativity diversity is mentioned as the greatest catalyst for this mutual adjustment. Diversity is a social construct that identifies cognitive, technical or personal differences in a given organization (Justesen, 2001:56). However, there are different facets of Diversity that carry different implications.
There is, first of all, Surface Level Diversity. This facet focuses on perceivable differences among individuals. In doing so it supports the “inclination to in-group favoritism” (De Dreu, Bechtoldt & Nijstad, 2014:4). While the superficial assessment of coworkers lead to connection with as similar perceived individuals (in-group), it might lead to distancing to or discrimination of individuals who are perceived as different (out-group). Due to this “surface-level diversity undermines group creativity and innovation because it undermines, in general, group cohesion and thereby the processes and performance requiring high levels of cohesiveness” (Nahapiet & Ghoshal, 1998 as quoted in De Dreu, Bechtoldt & Nijstad, 2014:4).
The informal structures that were built among demographic lines often change into more cooperative structures when people are getting to know each other (De Dreu, Bechtoldt & Nijstad, 2014:5).
Different from Surface level Diversity, Deep Level Diversity “refers to differences among team members’ psychological characteristics, including cognitive abilities, knowledge, skills as well as values, attitudes, and non-performance oriented traits” (e.g. Harrison et al., 2002 as quoted in De Dreu, Bechtoldt & Nijstad, 2014:5). The positive effects of Diversity in creative Teams often focus on cognitive aspects of Deep Level Diversity: cognitive abilities, knowledge, skill-sets and experience. These are cumulatively referred to as Cognitive Diversity. Teams demonstrating strength in this regard are often more proficient in gathering, processing and applying information (Justesen, 2001:69).
- Quote paper
- Jan Alexander Linxweiler (Author), 2016, Creativity and Innovation in Economics, Munich, GRIN Verlag, https://www.grin.com/document/341758