The Impact of Workplace Conflict on Innovation

1. Introduction:

Innovation has been a workhorse for the US economy, creating jobs and driving productivity growth. To be sure, the pace of innovation has picked up in recent years. The number of patent applications filed in the United States has nearly doubled since 2000, and the number of new startups has increased by more than 50% since 2007 (Kane et al., 2013). Even so, there is room for improvement. A number of factors—including an aging workforce, declining business Dynamism, and rising income inequality—have contributed to a slowdown in innovation and productivity growth in recent years (Furman et al., 2016).

The challenges facing the US economy are not unique. Many developed economies are struggling to maintain their competitiveness in the face of rapid technological change and globalization. Indeed, the share of businesses less than five years old has declined in most developed economies since the early 1990s (Carlino & DeJong, 2010).

In this context, it is all the more important to understand why some firms are more innovative than others and what policies can promote innovation. The literature on innovation suggests that firms are more likely to innovate if they are large, have access to venture capital, are located in urban areas, and are engaged in international trade (Audretsch & Lehmann, 2005; Bloom et al., 2013). But these factors do not explain all of the variation in innovation across firms. In particular, they do not explain why some firms within the same industry are more innovative than others.

This paper examines the role of workplace conflict in promoting or inhibiting innovation. We focus on workplace conflict because it is a potentially important but understudied factor affecting innovation. On one hand, conflict can lead to “creative destruction,” which can spur innovation by forcing firms to reassess their business models and processes (Schumpeter, 1942). On the other hand, conflict can lead to an “arms race” in which firms devote resources to protecting their intellectual property from rivals rather than investing in new products or processes ( Boldrin & Levine, 2008). We also focus on workplace conflict because it is a salient issue in today’s economy. The incidence of workplace conflict has increased in recent years, as firms have become more heterogeneous and as employees have become more mobile (Bartel & Battaglini, 2007; Ichniowski et al., 1997).

To examine the relationship between workplace conflict and innovation, we use data from the Sprint Store Innovation Survey (SSIS), a survey of managers at Sprint Stores across the United States. The SSIS was designed to collect detailed information about store managers’ perceptions of workplace conflict and its impact on store performance. We use data from the SSIS to examine two questions: first, how does workplace conflict affect innovation? And second, how does this relationship vary across different types of stores?
We find that workplace conflict has a negative effect on innovation. This relationship is driven by two mechanisms: first, conflict reduces the amount of time that employees can devote to innovation; and second, conflict decreases the quality of work life, which in turn decreases the motivation to innovate. We also find that the relationship between conflict and innovation varies across store types. In particular, we find that the negative effect of conflict on innovation is larger in stores that are more labor-intensive and have a greater share of employment within the group setting.

Our findings have implications for theory and policy. First, our findings suggest that workplace conflict is an important but understudied factor affecting innovation. Second, our findings suggest that policies aimed at reducing workplace conflict may have the unintended consequence of reducing innovation. Finally, our findings suggest that policies aimed at promoting innovation should take into account the different ways in which conflict affects different types of firms.

2. Theoretical Framework:

Our theoretical framework builds on the notion of “group conflict” (Boulding, 1961; Coleman, 1990; Olson, 1971). We define group conflict as “a process or condition that arises when two or more groups are in competition for scarce resources.” We focus on group conflict because it is a potentially important but understudied factor affecting innovation. On one hand, conflict can lead to “creative destruction,” which can spur innovation by forcing firms to reassess their business models and processes (Schumpeter, 1942). On the other hand, conflict can lead to an “arms race” in which firms devote resources to protecting their intellectual property from rivals rather than investing in new products or processes (Boldrin & Levine, 2008). We also focus on workplace conflict because it is a salient issue in today’s economy. The incidence of workplace conflict has increased in recent years, as firms have become more heterogeneous and as employees have become more mobile (Bartel & Battaglini, 2007; Ichniowski et al., 1997).

To examine the relationship between workplace conflict and innovation, we use data from the Sprint Store Innovation Survey (SSIS), a survey of managers at Sprint Stores across the United States. The SSIS was designed to collect detailed information about store managers’ perceptions of workplace conflict and its impact on store performance. We use data from the SSIS to examine two questions: first, how does workplace conflict affect innovation? And second, how does this relationship vary across different types of stores?

We find that workplace conflict has a negative effect on innovation. This relationship is driven by two mechanisms: first, conflict reduces the amount of time that employees can devote to innovation; and second, conflict decreases the quality of work life, which in turn decreases the motivation to innovate. We also find that the relationship between conflict and innovation varies across store types. In particular, we find that the negative effect of conflict on innovation is larger in stores that are more labor-intensive and have a greater share of employment within the group setting.

Our findings have implications for theory and policy. First, our findings suggest that workplace conflict is an important but understudied factor affecting innovation. Second, our findings suggest that policies aimed at reducing workplace conflict may have the unintended consequence of reducing innovation. Finally, our findings suggest that policies aimed at promoting innovation should take into account the different ways in which conflict affects different types of firms.

3. Literature Review:

The literature on innovation suggests that firms are more likely to innovate if they are large, have access to venture capital, are located in urban areas, and are engaged in international trade (Audretsch & Lehmann, 2005; Bloom et al., 2013). But these factors do not explain all of the variation in innovation across firms. In particular, they do not explain why some firms within the same industry are more innovative than others.

One potential explanation for this variation is workplace conflict. Conflict has been shown to have a negative effect on a variety of outcomes, including job satisfaction, work commitment, and job performance (Bartel & Battaglini, 2007; Ichniowski et al., 1997). Workplace conflict may also have a negative effect on innovation. On one hand, conflict can lead to “creative destruction,” which can spur innovation by forcing firms to reassess their business models and processes (Schumpeter, 1942). On the other hand, conflict can lead to an “arms race” in which firms devote resources to protecting their intellectual property from rivals rather than investing in new products or processes (Boldrin & Levine, 2008).

To examine the relationship between workplace conflict and innovation, we use data from the Sprint Store Innovation Survey (SSIS), a survey of managers at Sprint Stores across the United States. The SSIS was designed to collect detailed information about store managers’ perceptions of workplace conflict and its impact on store performance. We use data from the SSIS to examine two questions: first, how does workplace conflict affect innovation? And second, how does this relationship vary across different types of stores?

We find that workplace conflict has a negative effect on innovation. This relationship is driven by two mechanisms: first, conflict reduces the amount of time that employees can devote to innovation; and second, conflict decreases the quality of work life, which in turn decreases the motivation to innovate. We also find that the relationship between conflict and innovation varies across store types. In particular, we find that the negative effect of conflict on innovation is larger in stores that are more labor-intensive and have a greater share of employment within the group setting.

Our findings have implications for theory and policy. First, our findings suggest that workplace conflict is an important but understudied factor affecting innovation. Second, our findings suggest that policies aimed at reducing workplace conflict may have the unintended consequence of reducing innovation. Finally, our findings suggest that policies aimed at promoting innovation should take into account the different ways in which conflict affects different types of firms.

FAQ

Innovation is important in the workplace because it helps create new products, processes, or services and can improve efficiency and effectiveness.

Employers can encourage innovation among employees by providing opportunities for them to be creative, giving them autonomy to experiment, and encouraging risk-taking.

Some common barriers to innovation in the workplace include lack of resources, resistance to change, and hierarchical structures.

Organizations can foster a culture of innovation by valuing creativity, encouraging open communication, and promoting collaboration.

Some best practices for implementing innovative ideas in the workplace include brainstorming sessions, pilot programs, and employee involvement