Investigating Cultural Influences on Innovation: A Comparison of Estonian and Danish Biotechnology Organizations

Successful innovation could be considered the most important aspect in firm’s survival and economic success. One of the key determinants of successful innovation is organizational culture, but studies investigating the role of the organizational culture in innovation activities are rare. This chapter tries to fulfill that gap through analyzing cultural influence on innovation in Estonian and Danish biotechnology organizations. Biotechnology was chosen because it is highly innovative activity and is considered to be enabling technology throughout the world. Organizational culture’s characteristics linked to firm’s capabilities to engage in successful innovations were identified based on literature published between 2000 and present. As a result, an interview guide addressing observable key variables of organizational culture supporting innovation was developed. Interview guide consisted of 54 questions which were divided into four groups – firm’s strategy, structure of the firm, support mechanisms employed by the firm, and innovation-oriented behavior. To find out to which extent Estonian and Danish biotechnology firms possess the identified organizational culture’s characteristics authors conducted 15 interviews with Estonian and 26 interviews with Danish biotechnology firms. On the basis of the interviews’ results, authors identified variables that might explain different innovation capacity in those countries and discuss the importance of the socioeconomic environment where organizations operate.