Organizational climate and capabilities for innovation: a study of nine forest-based Nordic manufacturing firms

Forest-based manufacturing firms are currently under pressure to achieve higher margins and increased profits. Many firms have tried to maintain profits by cutting costs, however, the effects of this, in markets suffering from overcapacity and declining demand, are temporary. Instead, innovation is seen as being the key to firm growth and sustained profit. This article presents a study of nine large Nordic (Swedish and Norwegian) forest-based manufacturing firms, with operations ranging from pulp and paper chemicals, pulp production, packaging boards, packaging paper, and specialty paper to food processing and packaging solutions. The purpose of this study is to investigate the prerequisites for innovation at firm level in terms of firms' organizational climate and capabilities for innovation, and how these firms could improve their innovation processes. The paper draws on data from a collaborative research project that includes these nine firms, derived from interviews and questionnaires. The results show that forest-based firms are creative and have the potential to be innovative. However, the capabilities for innovation, that is the capabilities to do things differently and to exploit ideas, differ among firms. The study highlights two capabilities that may be obvious but are critical for innovation - management willingness and awareness, and the implementation of a strategy for innovation and that the potential exists for increased output through appropriate managerial action.