TECHNOLOGICAL FORECASTING AND SOCIAL CHANGE 38, 65-80 (1990) zyxwvutsrqponmlkjihgfedcbaZYX Creativity and Innovation in Organizations Two Models and Managerial Implications FIRDAUS E. UDWADIA ABSTRACT Technological innovation is emerging as the single most important factor to influence business success in today’s intensely competitive and dynamic environment. Accordingly, scholars as well as practitioners are contributing to a rapidly growing body of knowledge for the effective management of innovation. However, surprisingly, very little attention is being paid to the organizational and managerial issues pertaining to creativity, which is the most basic and the most critical element in the process of innovation. This paper highlights creativity as the central issue in management of innovation, and presents two models to further our understanding of the dynamics of creativity in organizational settings, and the place of creativity in the innovation process. For a comprehensive understanding of creative behavior and performance in organizations this paper develops a Multiple Perspective Model. This model includes three perspectives, the Individual, the Technical, and the Organizational, which focus respectively on the distinctive individual characteristics associated with creativity, the needed technical resources-material as well as human-for creativity, and the organizational practices and managerial actions that aid or stifle creativity. The exposition of this model is followed by an analysis of its implications for the management of creativity. Next, a model of the innovation process is proposed, in which innovation is shown as being contingent on a cascade of creative efforts in various functional areas and across different fields of specialization. These two models are expected to be useful to both researchers and practitioners in ferreting out the issues of primary significance, nurturing creativity and enhancing innovation in organizations. Introduction Innovation is widely recognized as the key to an organization’s survival and success in today’s intensely competitive business environment. A recent cover story in zyxwvutsrqponmlk Fortune asserts, “Innovating-creating new products, new services, new ways of turning out goods more cheaply-has become the most urgent concern of corporations everywhere” ([ 11, p. 50). Management researchers, educators and practitioners are all exhibiting a great deal of interest in innovation. Scholarly findings and experience-based prescriptions are together contributing to a rapidly growing body of knowledge on management of innovation (for a representative sampling of the literature see [2, 31). However, for all the attention showered on innovation, its very fountainhead, creativity, has received only FIRDAUS E. UDWADIA is Professor of Business Administration, Civil Engineering and Mechanical Engineering at the University of Southern California in Los Angeles. The author thanks Dr. N. Sethia for having provided him with a bibliography dealing with individual creativity and for his comments on an early version of the manuscript of this article. Address reprint requests to Prof. Firdaus E. Udwadia, Professor of Business Administration, Civil En- gineering and Mechanical Engineering, University of Southern California, Olin Hall 430 K, Los Angeles, CA 90089-1453. 0 1990 by Elsevier Science Publishing Co., Inc., 0040-1625/90/$3.50