The present report focuses on the analysis of internal environment factors in Oman Oil Refineries and Petrochemicals Industries Company (ORPIC) that play the primary role in determining the organizational capabilities for creativity and innovation: workplace climate and leadership. The analysis of the first factor employs Göran Ekvall’s Creative Climate Model as a theoretical framework, and the analysis in the second one mainly relies on the multi-context conceptualization of creative leadership.
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The findings revealed that ORPIC utilizes a transactional leadership style and is oriented primarily towards the fulfillment of organizational interests. Additionally, employees are not provided with sufficient autonomy and opportunities to express themselves and discuss various solutions. Based on this, it is recommended for the company to develop an innovativeness and creativity culture that would lead to changes in employee-leader communication and team dynamics.
Creativity and innovation are essential concepts for any business to consider. The former term implies the generation of new ideas and the solution of complex problems in an original way, while the latter term means the implementation of novel, creative ideas, and approaches in real-life situations. It is not an understatement to say that these overlapping and inseparable processes drive the progress. Thus, companies should strive to foster creative thinking and innovation in the workplace and eliminate possible barriers to their practice.
Organizational climate and leadership are considered the primary factors leading to greater creativity and innovation or inhibiting them. For this reason, the present report will have the objective of examining the role of these two important organizational aspects by drawing on theoretical and research evidence. Oman Oil Refineries and Petrochemicals Industries Company (ORPIC), a large oil and gas enterprise, will be the main focus of the analysis.
Since the company operates in an intensely competitive industry that demands a high level of technological and operational innovation from all involved actors, an understanding of weaknesses and strengths in terms of organizational creativity and innovation may help ORPIC improve its performance and take a leading position in the global market.
A vast body of research evidence is devoted to the explanation of links between employee creativity and organizational climate. According to Nguyen (2018), workplace climate is determined by patterns of behaviors and attitudes characterizing a company’s life on a day-to-day basis. Additionally, the way individuals perceive those patterns play an important role in defining the overall climate in an organization (Nguyen 2018).
It is possible to say that Göran Ekvall’s Creative Climate Model elaborates on these two basic organizational climate factors, and it captures such dimensions as challenge, freedom, idea time, idea support, openness, dynamism, playfulness/humor, debates, conflicts, and risk-taking (Porzse et al. 2012). Ekvall’s model will be the central framework in the given section of ORPIC analysis.
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The first climate dimension, challenge, refers to the level of employees’ psychological involvement in their work and commitment to it (Porzse et al. 2012). Considering that ORPIC has a very task-oriented culture and encourages adherence to high professional standards through rewards and recognition of achievements, its score in the challenge category is rather high. Another dimension with a high score is dynamism, which refers to eventfulness and the need to come up with novel solutions frequently (Porzse et al. 2012). Nevertheless, it relates primarily to the work of the higher management group who are responsible for responding to changes in both internal and external environments.
Other climate dimensions are scored lower mainly because of a highly formalized and hierarchal workplace structure and culture. In ORPIC, each person strictly adheres to subordination and behavioral standards and functions within a clearly defined, individual scope of performance. Debates and discussions of particular problems among ORPIC employees may take place, but subordinates are usually not invited to express opinions regarding issues with which managers are preoccupied.
Moreover, employees may fear condemnation and non-acceptance that may follow after saying something contradicting to managers’ ideas. This situation is against creative thinking and innovation, which require to take into account different voices (debate), provide emotional safety for self-expression (openness), create room for spontaneity and ease (playfulness), and be attentive to others’ suggestions (idea support) (Porzse et al. 2012).
It is also worth noticing that, in ORPIC, employees may sometimes be under pressure to meet tight deadlines. Additionally, since primarily those people who diligently perform their duties and excel at the workplace have a chance to be promoted, and since there are not enough opportunities for career growth for everyone, interpersonal tensions due to the competition may take place. Both of these factors, time limits, and conflicts, have a negative impact on the creative climate (Porzse et al. 2012). They expose individuals to unnecessary stress and decrease the level of collaboration considerably.
The leadership approach and fashion in which leaders interact with other employees are key to organizational innovativeness. According to Mainemelis, Kark, and Epitropaki (2015) creative leadership is manifested in “facilitating employee creativity; directing the materialization of a leader’s creative vision, and integrating heterogeneous creative contributions” (p. 400). While the first manifestation implies employee empowerment through the creation of a supportive environment and climate, the latter two indicate that creative leadership is interactive and collaborative in its nature.
In line with this statement, Zhang, Zheng, and Darko (2018) conclude that transformational leadership is associated with a greater level of innovation and creativity in companies. Typically, transformational leaders aim to meet such higher-order needs of employees as self-esteem and self-realization and, therefore, they provide them with intellectual stimulation, meaningful activities, and a sense of purpose through vision implementation (Zhang, Zheng & Darko 2018).
When speaking of the leadership style in ORPIC it is rather task-oriented than human-oriented and is characterized by a significant level of control over subordinates through various formalities, discipline, rewards, and punishment. Thus, it can be defined as authoritative and transactional or, in other words, mainly considerate of the company’s needs and goals than the interests of employed individuals and based on a strict division of power among individuals (Nanjundeswaraswamy & Swamy 2014).
It is noteworthy that in such a large organization as ORPIC, the use of this leadership style is justified because it facilitates the management process by reducing behavioral unpredictability (for instance, underperformance and unnecessary performance) and minimizing the threat of negative outcomes due to it. Nevertheless, without the empowerment of employees and the provision of psychological, social, and material support for versatile creative contributions, it may be difficult to achieve a high degree of organizational innovativeness.
The results of the literature review revealed that leaders play an essential role in shaping the creative environment in their firms. The way they interact with subordinates and the extent to which they support them and are successful in conveying a vision that increases creative expression is the most important leadership factors.
At the same time, a workplace climate that has the potential to improve creativity and innovation is characterized by employee collaboration, openness, relatively relaxed atmosphere, lack of tensions, excess pressures, behavioral limitations, and stressors. When working in such a climate, individuals feel secure to share their views and are motivated to do so, as well as to come up with untrivial solutions.
The analysis findings made it clear that ORPIC fails to foster creativity and innovativeness across different organizational levels. The main inhibiting factor is the non-involvement of subordinates in decision making and a failure to provide them with sufficient autonomy.
The company makes employees involved in work mainly through rewards and punishments. At the same time, the management may not be as successful in meeting the higher-order needs of individuals because the company’s needs are placed above human interests. Overall, the obtained results indicate that substantial changes in the leadership framework and workplace climate are required in ORPIC in order to make its workforce more creative and the company – more innovative.
It is possible to say that one of the best ways for ORPIC to achieve positive changes is through the development and promotion of creativity and innovation culture because this practice is comprehensive and involves modifications in the leadership approach, vision, workplace structure, and overall environment. Notably, at this moment, employee behaviors and diligence in adherence to high professional standards are consistent with ORPIC’s current vision “to become a competitive enterprise and a model for industrial excellence with a proficient workforce” (Oman Refineries and Petrochemicals Company LLC n.d., para. 4). By integrating a new value of innovation in this vision and altering behavioral patterns accordingly, the enterprise may achieve a desirable objective.
After a new vision is formulated, the management should communicate it and make sure subordinates understand it well. Notably, to facilitate the acceptance of innovation and creativity values, it is recommended for the leaders to involve employees in the discussion of novel initiative and behavioral changes in order to align organizational needs with the personal ones and reduce resistance to change (Anderson, Potočnik & Zhou n.d.).
After the completion of these steps, it is essential to modify the work environment and structure: to create more opportunities for open discussion of various solutions and create a reward system that would encourage creative thinking and processes. It is worth noticing that individual capabilities must be considered because some persons may misunderstand the concept of creativity and lack of skills for making creative contributions. Therefore, personnel must be supported and guided during the change process through training and appropriate feedback.
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Anderson, N, Potočnik, K & Zhou, J n.d., Innovation and creativity in organizations: a state-of-the-science review, prospective commentary, and guiding framework.
Mainemelis, C, Kark, R & Epitropaki, O 2015, ‘Creative leadership: a multi-context conceptualization’, The Academy of Management Annals, vol. 9, no. 1, pp. 393-482.
Nanjundeswaraswamy, TS & Swami, DR 2014, ‘Leadership styles’, Advances in Management, vol. 7, no. 2, pp. 57-62.
Nguyen, TAT 2018, ‘The influence of climate on organizational innovation: a study in Vietnam’, International Journal of Management and Applied Science, vol. 4, no. 2, pp. 95-99.
Porzse, G, Takacs, S, Csedo, Z, Berta, Z, Sara, Z & Fejes, J 2012, ‘The impact of creative organizational climate on the innovation activity of medical devices manufacturing firms in Hungary’, European Journal of Business and Management, vol. 4, no. 13, pp. 1-11.
Zhang, Y, Zheng, J & Darko, A 2018, ‘How does transformational leadership promote innovation in construction? The mediating role of innovation climate and the multilevel moderation role of project requirements’, Sustainability, vol. 10, no. 5, p. 1506.