Effect of Creativity on Innovation: Do Creativity Initiatives Have Significant Impact on Innovative Performance in Korean Firms?

In modern society, most companies exert great effort to raise their productivity and increase corporate levels of innovation. Many global companies in Korea emphasize creativity management for innovation and adopt various initiatives to stimulate creativity in employees. In this study, a structural equation model (SEM) was proposed to analyze the effects of basic skills, compensation systems, and external environment factors on creativity, and the effects of creativity factors on the innovative performance of an organization. In addition, based on the proposed SEM, the Organizational Creativity Index (OCI) was developed. One unique and important aspect of this research is the use of SEM. That is a powerful statistical technique that has not yet been fully utilized in studies of organizational creativity. Another contribution of this research is the development of the OCI. The results are expected to provide instructive information about how to improve creativity and innovative performance in various organizations.