Organisation of R&D departments as determinant of innovation: testing alternative explanations

This study sheds light on understanding the effect of two organisational variables, formalisation and communication, on innovation. The prevailing belief that formalisation hinders innovation while communication fosters it seems too simplistic. Therefore, we explore two possible explanations in such relationships: (1) the effect of organisational variables on innovation may be conditioned by the type of innovation (radical vs incremental) and (2) the possibility to find a curvilinear, inverted U-shaped relationship, instead of linear, between these two organisational variables and innovation. This empirical study has been undertaken in R&D departments, considering a sample of Spanish companies belonging to different innovative industries. The results show that the relationship between formalisation and innovative performance is negative when innovation radicalness is low, while it is positive when radicalness is high. On the contrary, the relationship between communication and innovative performance is linear and positive. The existence of a curvilinear relationship, then, could not be demonstrated.