Organizational Structure and Organizational Culture

The innovative capacity of an organisation is determined by numerous factors which operate in the external and internal environment. Without diminishing the role and importance of external environment factors, the focus of this paper is the analysis of the impact of the organisational structure and culture, which are the elements of the internal environment, on the innovative behaviour of organisations. The paper starts from the assumption that business innovation is under a strong influence of the abovementioned elements, bearing in mind that the influence can be both positive and negative depending on the dimensions of the organisational structure and the values promoted by the organisational culture. The findings in the paper can contribute to the existing literature to interpret the nature of the relationship between the organisational structure and culture and the innovative ability of a company; as well as to find the way how to improve the existing business innovation practice based on the creation of the organisational design that encourages workplace creativity and innovation.