The Effect of Organizational Democracy on Innovation in Public Organizations in Korea

Abstract

Major streams of government reform places large emphasis on improving the work environment in public organizations. As part of this movement, empowerment and easier communication are regarded as key components, which conveys increased attention to upward communication within organizations. Recent research in various fields have constantly produced research that are noteworthy related to the matter, most of which confirm that improved communication within organizations lead to positive outcomes in terms of work environment, and possibly other long term consequences. The phenomenon related with reforms in public organizations is often adopting the skills and habits from private sector, which are known to be effective and useful. One of such would be innovation, a concept that is frequently stressed in private sector but rather new to the public organizations. The public sector is trended in directions away from the stiff bureaucracy and towards more horizontal structures, which in turn promotes innovative behavior throughout the organization. In fact, public organizations have recently viewed to be inclining to promoting innovation in the ways of work, introducing new systems and products. In this aspect, the current study investigates how such bottom-up communication yields positive results in terms of innovation at the organizational level. Specifically, the relationship between the level of formal channels for upward communication, to enhance organizational democracy, and two types of innovation: employee-driven innovation and output innovation is to be examined. Using survey data from the Work Panel Study, analysis proved statistical significance for two hypotheses. First, the relationship between organizational democracy and employee-driven innovation is found to be positively correlated. The other hypothesis between organizational democracy and output innovation is also confirmed, implying a positive connection between two concepts. The results could indicate promoting organizational democracy at work yields positive outcome for the organization. The study broadens understanding on the importance of work environment in fostering innovative behavior. Possible policy recommendation to enhance such effect is suggested, as well as study limitations and implications that follow.