Introduction

The study begins by introducing google as the most innovative organization in the world. The introduction assumes that the innovative nature of Google Company is due to its ability to provide a supportive environment to its employees (Chen et al., 61). Additionally, the introduction orients the reader on the purpose of the study, which is to examine the relationship between the commitment of a firm to provide a conducive environment to its employees and the possibility of the employees to be innovative. Moreover, the introduction provides background information about the topic by stating that innovation is essential in providing a company with a competitive advantage. According to the paper, implementation of supportive employee environment enables the organization to ensure job satisfaction to their employees thus improving trust between the employees and their innovative capabilities (Chen et al., 61).

The introduction also provides a definition of terms to be used in the paper such as “workplace quality” (Chen et al., 62, para. 3), which means the level of support employees receive from workplaces. Moreover, it highlights the methods used to provide more information in later sections. For instance, the paper uses “heterogeneity” (Chen et al., 62, para. 4), which means “diversified methods” for various companies and firms resilience (Chen et al., 62, para. 5), which is the ability to persist on realizing innovation The article also states that proper interpretation of the relationship between innovation of workplace policy. For instance, it states that a supportive employee environment involving approaches such as recruitment and retention of employees with special talent may promote innovation Chen et al., 62, para 6).

Main Issue (Problem Statement)

According to the article, previous studies have investigated the impact of employee welfare on other productivity measures such as stock and cash holding. However, no significant attention has been focused on the ability of a supportive employee environment to improve innovation. According to the paper, the primary challenge organizations face in the pursuit and management of innovation are high failure probability and unpredictability of results.

The thesis statement of the paper is: “By implementing employee-friendly policies, firms can increase employee job satisfaction, strengthen their relationships with employees, and enhance employee trust in management, thereby offsetting the negative influence of innovative, high-risk activities on employees. Thus, an employee-friendly workplace likely promotes greater tolerance for failure and encourages employee engagement in experimentation and innovation” (Chen et al., 62, para. 1).

Hypothesis

The hypothesis of the paper is, “that firms with employee-friendly workplaces invest more heavily in innovation and achieve greater innovation success” (Chen et al., 62 para. 2, last line). This means that by investing in employee supportive activities, organizations motivate the employees to engage in innovative activities.

Methods

1. The study uses documents and records method to collect data. The data is collected from three sources that include NBER Patent Citation database for US patent information between 1976 and 2006, Harvard business school (HBS) patent database, and ‘100 Best Companies to Work for in America” list from KLD database.
2. The study also uses a survey of research and development (R&D) records to measure the innovation of an organization. This depends on the number of patents and their duration after issuance to a company over a particular period.
3. The data are analyzed statistically using measures of central tendency such as mean, median and standard deviation. Positive significant figures indicate a positive relation between variables. The variables included Research and development (R&D) and some patents.

Results

1. Regression (from table 1, p. 66) shows positive coefficient with significant statistics (positive figures) indicating that organizations that provide supportive employee environment/workplace are more likely to be innovative and get more patents (Chen et al., 66).
2. Employee retention and recruitment lead to innovation (Chen et al., 74).
3. Organizations with high organizational capita (OC) have high rates of innovation (Chen et al., 74).
4. Industries with high labor mobility have the likelihood of being innovative (Chen et al., 75).
5. Executive members who invest in employee friendly environment and innovation activities have a low risk of employment termination (Chen et al., 76).
6. Compensation and incentives improve employee innovation (Chen et al., 77).

Discussion

1. Retention and recruitment: Firms that provide a friendly working environment to employees are likely to retain the best talent. In this way, such organizations are likely to experience innovation due to the greater talent they attract and retain. This is the reason behind a high number of patents for organizations with high retention and recruitment rates (Chen et al., 74).
2. Organizational Capital: OC is a form of capital that is intangible and embedded in the key employees of an organization. An organization with high OC levels invest more in the training and hiring of talented employees. Talent is critical in innovation and any organization that provides an environment that nurtures talent also nurtures innovation. In this way, high OC provides a conducive environment for innovation (Chen et al., 74).
3. Labor Mobility: This is the ability of an employee to leave one firm to another in the same industry. The flexibility can be as a result of a conducive workplace environment that promotes innovation. According to the study, conducive working environment that supports recruitment and retention of talent also opens up opportunities for one to move from one firm to another within the industry thus benefiting the whole industry (Chen et al., 75).
4. Risk of Termination: This relates to organization executives. According to the article, the top management of an organization that engages in activities aimed at promoting innovation such as training, development, and recruitment of the best talent have a low risk of job termination. By investing in long term innovative projects, the executive is likely to stay longer in an organization to oversee the successful completion of the initiated projects (Chen et al., 76).
5. Compensation and incentives: firms that provide an employee-friendly working environment through proper compensation and incentives are likely to experience high rates of innovation because the employees are motivated (Chen et al., 77).

Conclusion

The findings from the databases show that there is a positive correlation between supportive employee work environment and innovation. According to the article, organizations that provide conducive working environments for the employees are more likely to invest in innovation and realize innovation success. The high number of patent and expenditure on research and development in such firms is an indication that investing in an employee-friendly work environment promotes innovation. Besides, employee friendly atmosphere improves tolerance to failure, which encourages innovation implementation. In this way, firms with a conducive working environment for their employees register successful innovations even though the risk of innovation failure is high. This is because the organizations are shock resilient.