Project promotes innovation and employee participation in SMEs

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In June 2001, Portugal's Institute for Innovation in Training (INOFOR) assessed a project it had been running on "Paths to innovation", which sought to promote organisational innovation in small and medium-sized enterprises (SMEs). Such innovation is thought to be rare in Portugal. Notable points included: the fact that participating companies were required to develop employee participation in innovation; a programme of visits to SMEs in Denmark and Ireland, in which trade unions and employers participated; and the establishment of a network by the companies involved.

As part of the European Community's 1995-2000 ADAPT initiative - which aimed to help the workforce adapt to industrial change, and to promote growth, employment and competitiveness - Portugal's Institute for Innovation in Training (Instituto para a Inovação na Formação, INOFOR) initiated a project entitled "Paths to innovation" (Caminhos para a Inovação) through its "organisational innovation and human resource management" unit. The project focused on:

  • the organisational development in 1999 and 2000 of those small and medium-sized enterprises (SME s) that applied for assistance;
  • an exchange of experiences with Ireland and Denmark; and
  • the creation of an Organisational Innovation Network (Rede de Inovação Organizacional, RIO).

One of the most innovative aspects of the project was that a condition for a company's involvement was the development of structures enabling the participation of employees in innovation.

Cross-border exchange of experiences

As part of the project, INOFOR organised the visits of 25 employers from Portuguese SMEs to seven Irish and Danish firms with a successful record of implementing organisational innovation. Also invited on the visits were representatives of the Portuguese social partners - the General Union of Workers (União Geral de Trabalhadores, UGT), the General Confederation of Portuguese Workers (Confederação Geral de Trabalhadores Portugueses, CGTP), the Confederation of Portuguese Business (Confederação do Comércio de Portugal, CCP) and the Confederation of Portuguese Industry (Confederação da Industria Portuguesa, CIP) - and of the Institute for Development and Inspection of Conditions of Employment (Instituto de Desenvolvimento e Inspecção das Condições de Trabalho, IDICT).

The aim of the visits was to contribute to transforming the attitudes and behaviour of employers, managers and the social partners, with a view to improving the quality of, and benefits gained from, initiatives in the field of organisational innovation and human resource management, and in this way to strengthen the forces of change necessary for improving the competitiveness of SMEs. Denmark and Ireland were chosen for their size, and also for the characteristics of their macroeconomic development, their social dialogue, the internationalisation of their economies, and their progress in improving and skilling their human resources. The visits permitted the Portuguese participants to observe organisational innovation practice in the following areas:

  • new forms of work organisation;
  • participation and social dialogue within the company;
  • human resource management and continuing training as a solution to organisational innovation;
  • working time management;
  • health, safety and hygiene at work; and
  • "corporate citizenship".

In INOFOR's view, these visits highlighted the following issues:

  • the existence of leadership is based on a relationship of mutual trust, the development of people's competence, the encouragement of individual responsibility and a decentralisation of power;
  • a company's well-being, the motivation of its employees and any increase in productivity are all related to the participation and involvement of the company's workforce;
  • the kind of training developed should be based on the real needs of companies and their workers;
  • teamwork is favoured, as is a culture of cooperation, informal dialogue and a philosophy of shared benefits; and
  • the human factor is crucial in realising change and in the maintenance and development of the organisation.

According to Portuguese employers, it is difficult to transfer these principles to the national context owing to several factors. Notably, the lack of qualified management in SMEs and the individualism that characterises Portuguese employers are associated with a lack of political incentive for change. Furthermore, training is viewed as a cost rather than an investment, while the business fabric does not anticipate change and resists the introduction of organisational innovation and human resource management methods.

Creation of the RIO network

Following the project, the various employers involved will continue with the Organisational Innovation Network (RIO) as a means of improving cooperation in research and development relating to organisational practice. The aim of the network is to: develop methodologies of analysis and support for organisational innovation processes; identify, transfer and encourage the spread of successful national and international practice; and develop a culture of cooperation that encourages initiatives between members of the network.

Project evaluation

An evaluation of the project was presented at a transnational seminar held in June 2001 in Aveiro with the following objectives:

  • sharing the knowledge gained from the experiences generated by the project;
  • reinforcing and consolidating the knowledge gained in the area of organisational innovation and human resource management; and
  • planning and sharing of courses of action for future development.

According to INOFOR, participants in the project viewed organisational innovation working methods as important instruments for harmonising technological management and human resource management, with a view to reinforcing the competitiveness of their companies. As a result of their experiences, the participants had changed their perceptions of the methods used to promote organisational innovation. Their ideas on the importance of training and personal development, the links between the technological and human dimensions and the skilling of work and the workforce were strengthened, while they rethought their perceptions on employee involvement and commitment, technologies, and the delegation and decentralisation of responsibilities. However, participants' perceptions on the importance given to companies' social responsibility and their role in the promotion of organisational innovation hardly changed at all

Commentary

The "Paths to innovation" project sought to contribute towards a transformation of attitudes and behaviour on the part of employers, managers and social partners, fostering change and the strengthening of competitiveness through organisational innovation and human resource management. This is not a frequent occurrence in Portugal, owing to a lack of companies with active worker participation policies. It appears, however, that the project initiated an important movement for change - as can be seen from the fact that several participants have developed follow-up schemes, in particular for sharing common practices, based on a platform of networking in the area of organisational innovation and human resource management. (Ana Almeida, UAL)

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