Management by objective enhances innovation behavior: An exploratory study in global management consulting

Abstract

The goal of this study is to explain the complex effect of management by objective practices on employees' innovative behavior. Instead of considering individual goal orientation and/or formal creativeness-related goal assignment (as in the recent literature), the focus of this paper is on exploring whether the official adoption of management by objective practices may foster employee innovative behavior. Basing on the results of 2 exploratory interviews with 2 senior managers of 2 global consulting companies, we build our conceptual model. We use a goal-based view to this purpose. Then, we test the model by using data collected by surveying 80 consultants employed in 17 different management consulting companies. We find that a conscious motivational path links goal-setting strategy to employee innovative behavior through smart goals, whereas an unconscious motivational path links leader–follower relationship quality to employee innovative behavior through an appropriate performance appraisal strategy.