The effects of remote work on organizational culture and innovation : A case of the technology sector

Abstract: Since the 1970s, remote work had been considered as a niche approach to work. However, that changed in 2020 with the advent of the COVID-19 pandemic. Remote work became a necessity for most organizations amid a worldwide crisis. Post-COVID-19, remote work is expected to remain a dominant work form for many organizations, as various studies have shown. Naturally, questions arise regarding the effects of this emerging post-office work environment. Objectives: This thesis work aims to investigate the effects of remote work on the relationship between organizational culture and innovation in the technology sector. Methodology: A quantitative approach is followed in this study. Data collection is done using a 26-item questionnaire. Eight hypotheses are tested using a theoretical model developed based on existing literature. Four of the hypotheses test the direct relationship between organizational culture and innovation. The hypotheses theorized that developmental, group, hierarchical and rational cultural traits positively affect innovation. These were derived from previous literature and are used to benchmark the validity of the theoretical model. The other four hypotheses are novel and test how remote work moderates the relationship between developmental, group, hierarchical and rational cultural traits and innovation. The theoretical model is measured and analyzed using structural equation modelling techniques with PLS-SEM. Results: Two of the four hypotheses on the direct relationship between organizational cultural traits (i.e., developmental and group) and innovation were supported. This result is as expected; and is in line with previous literature where the hypotheses were derived from. Hence, the result provides confidence in the validity of the theoretical model. The other two hypotheses testing the direct relationships (i.e., hierarchical and rational cultural traits verses innovation) were not supported by the results. This can be partially explained by prior studies and the fact that this study focused on a specific industrial sector i.e., technology. The remaining four hypotheses on the moderating effect of remote work on organizational culture and innovation were also not supported. Conclusions: In this study, developmental and group cultural traits were shown to positively affect innovation in the technology sector. Meanwhile, hierarchical and rational cultural traits did not. Also, remote work was not found to moderate the relation between organizational culture and innovation in the technology sector. Theoretical implication: This thesis work makes a novel contribution to research by studying the interplay among the triad of remote work, organizational culture and innovation. Moreover, the results in this study contribute to the existing body of research which show that developmental and group cultural traits positively affect innovation. Industrial implications: The results in this study imply that remote work does not affect the relationship between organizational culture and innovation. These results assure managers that they can continue to fully extract the benefits of remote work without affecting the underlying culture of the organization and curbing the innovation potential of their teams. Recommendations for future research: Future research may consider using more established methods of measuring remote work in relation to this study. Also, the research design can be more streamlined e.g., by focusing on a specific industry, country and innovation type.