Creativity in smaller Organizations

Adine Dørum Peter Vollen

Master of Science in Entrepreneurship Submission date: May 2016 Supervisor: Lise Aaboen, IØT

Norwegian University of Science and Technology Department of Industrial Economics and Technology Management

Assignment text To study creativity in organizations by investigating the differences and similarities in an immature startup, mature startup and an established company.

The following main points will be included: Theory on creativity in organizations, Case study, Analysis of empirical data with the use of a theoretical framework, Discussion and Conclusion.

Preface This master thesis is written by two master students that are studying at the School of Entrepreneurship at the Norwegian University of Science and Technology. The paper is given as an assignment in the subject TIØ4945 “Innovasjon og entreprenørskap”. The aim of this master thesis is to investigate creativity in Norwegian organizations. The authors have prepared for this thesis in their courses TIØ4530 and TIØ4535 during the fall of 2015.

The authors want to thank Lise Aaboen, who has been their supervisor this fall and spring. Her feedback, support and guidance are much appreciated. The authors would also like to thank the CEO and employees in the three interviewed organizations. This was of great value to the authors and for the thesis.

Abstract Creativity is one of the most important factors for success in a company, but the industry in Norway is said to have a frightening low expertise on creativity. Most managers do not know how they can promote organizational creativity, which is a function of creative outputs from individuals within the organization and its work environment. In a literature review, creativity was found to be affected by different levels; individual, organizational and environmental. The authors see a need to understand creativity in smaller organizations and have designed a theoretical framework consisting of three different levels of creativity surrounded by an entrepreneurial context. The purpose of this master thesis is to investigate how the different levels of creativity are affecting creativity in smaller organizations. In order to fulfill the purpose, three research questions (RQ)s have been designed. Each of the RQs are created to understand the different levels of creativity. The first RQ concerns how the organizational structure are affecting creative individuals. The second RQ examines how constraints affect creativity in an organization. The third RQ addresses how organizations can foster a creative environment. To solve the research questions, it has been chosen a qualitative approach with case study as research design. Empirical data have been collected by conducting multiple case studies. Three smaller organizations have been investigated; a mature startup, immature startup and a SME company. These are chosen because they are expected to contribute with different knowledge from various point of views. A cross-case analysis has been conducted in order to discover nuances between the different organizations. Employees are found to be the most important resource in regards of promoting creativity in organizations. The analysis show that there is a connection between steepness of the organizational structure and the individual creativity. A flat structure empowers employees because of increased responsibility, and more self directed employees is found to be producers of more creative output. The level of knowledge within a company is crucial in order to overcome constraints. Constraints might also promote individual motivation, if handled correctly. It is easier to establish closer relationships in smaller organizations, and close relationships contributes to a safe climate. It was also found that the individual motivation among employees is interrelated to the creative work environment. Creativity in smaller organizations is highly affected by all of the creativity