Incentive Theory of Motivation

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1 Strategic Leadership to leverage Dynamic Capabilities and unleash Disruptive Innovation: A Global Comparison Jeremy Moreland, PhD. Dean, School of Advanced Studies, UoPX Fiona Sussan, PhD. Foundation Chair, Center for Global Business Research, SAS, UoPX Constant Cheng, DBA. Fellow, Center for Global Business Research, SAS, UoPX Azer Efendiev, PhD. Center for Research in Social Organization of Company, Higher School of Economics, Moscow, Russia Pavel Sorokin, PhD. Fellow, Center for Research in Social Organization of Company, Higher School of Economics, Moscow, Russia Ki-Chan Kim, PhD. Professor, Catholic University of Korea Incentive Theory of Motivation Extrinsic vs Intrinsic Motivation Extrinsic Motivation occurs when we are motivated to perform a behavior or engage in an activity in order to earn an external reward or avoid a punishment. Intrinsic Motivation Engages in a behavior because it is personally rewarding; essentially, performing an activity for its own. East vs West (Difference in Values and Cultural Orientation) West Extrinsic rewards are widely used East Increasingly a mix of extrinsic and intrinsic rewards 1

2 Strategic Leadership is beyond Transformational! Transformational leadership is positively related to organizational commitment and job satisfaction 217 employees (47 intact teams) in four large Korean firms located in Seoul, Korea, participated. These companies used a team system for their main operations for several years. Results of PLS showed moderately strong, positive relationships between transformational leadership and empowerment, group cohesiveness, and perceived group effectiveness (Jung & Sosik, 2002) Strategic Leadership, is essential for not only motivating employees and organizational commitment, but also has the ability to sense and manage market changes, develop dynamic capabilities of a company, and develop timely disruptive technology in order to capture emerging market opportunities Theories and Approach Bourdieu s Social Identity Theory which suggests that the social identity of the employee can be viewed as a combination of his / her habitus (disposition) and the position in the particular social field (e.g., the department of a company). Since habitus is, largely unconscious as well as the emotional, by shaping the habitus of the employees, the managers may foster their positive emotions and thus increase efficiency. The Social Exchange Theory posits that human relationships are formed by the use of a subjective cost-benefit analysis and the comparison of alternatives; therefore argues that the emotions are the sort of additional motivation (or valuable resource) comparing to the traditional understanding of the extrinsic or monetary stimulation. This creates the special context for the discussions about motivation: inspiring emotions from others (employees) and giving emotions ourselves (managers) may interrelate complexly. Finally, the institutional context may determine the role of emotions in the work place, and even the "space" for emotions in the everyday life. 2

3 Strategic Leadership Creative leadership: the ability to leverage the human capital of the firm internally to provide a corporate culture that helps to stimulate innovation. Operational leadership: the ability to sense and seize emerging market opportunities Makri s and Scandura s study argues, that CEOs of high technology firms who are able to simultaneously focus on the external and internal environment, and on developing new knowledge as well as commercializing it, would be more effective leaders. Creative and operational leadership are both important and relevant for different phases of the innovation process, and clearly, being able to simultaneously pursue both is a desirable trait in a leader. Dynamic Capabilities "the firm s ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments. How a firm's sustainable competitive advantage is eroded depends on the stability of market demand, and the ease of replicability (expanding internally) and imitability (replication by competitors). If correct, the idea suggests that sustainable competitive advantage and company success, in regimes of rapid technological change depends largely on honing internal technological, organizational, and managerial processes inside the firm. In sum, identifying new opportunities and organizing effectively and efficiently to embrace them are more fundamental to wealth creation than strategizing by competing against current competitors and excluding new entrants. 3

4 Disruptive Innovation is an innovation that helps create a new market, and eventually disrupts an existing market by displacing an earlier technology. Disruptive Innovation requires Disruptive/Strategic Leadership! Business as usual will not work! New leadership competencies are required to navigate disruption. This means uncovering one s deeper motivations to drive meaningful opportunities for others; pushing personal boundaries to challenge one s own assumptions; taking steps into the unknown with the view that failure isn t failure at all but a stepping stone for gaining new insights and uncovering opportunities. To lead disruptive innovation successfully requires that we disrupt the most fundamental mindsets and behaviors that have led us to our current success. (Kaplan, 2012) 4

5 Cross-countries Comparisons Chinese Japanese Korean Russian American The Middle East References Bourdieu, P. (1990) Structures, habitus, practices. In P. Bourdieu, The logic of practice. Stanford, CA: Stanford University Press. Geren, B. ( 2011 ). Motivation: Chinese Theoretical Perspectives. Journal of Behavioral Studies in Business, Retrieved from Jung, D. I. & Sosik, J. (2002). Transformational Leadership in Work Groups: The Role of Empowerment, Cohesiveness, and Collective-Efficacy on Perceived Group Performance. Small Group Research, 33; Kaplan, S. Leading Disruptive Innovation. Ivey Business Journal. July/August Extracted from Scandura, T. A. (2009) Strategic Leadership and Innovation in High Technology Firms. Management Faculty Articles and Papers. University of Miami Teece, D. J. (2011). Dynamic Capabilities and Strategic Management: Organizing for Innovation and Growth, Oxford University Press, Second edition. Teece, D. J., Pisano, G., & Shuen, A. (1997) Dynamic Capabilities and Strategic Management. Strategic Management Journal, 18/7, Thibaut,J. & Kelley, H. (2008). Social Exchange Theory. In Griffin, Em. A First Look at Communication Theory. McGraw Hill. pp Walumbwa, F.O., Wang, P., Lawler, J. & Shi, K. (2004) The role of collective efficacy in the relations between transformational leadership and work outcomes. Journal of Occupational and Organizational Psychology, 77 (4),