Association for Public Policy Analysis & Management

Internal communication serves a pivotal role for organizational success. Effective internal communication enhances not only organizational reputation and credibility externally but also employees’ job satisfaction and performance internally. Internal communication is a part of integrated corporate communications which should be sensitive to external and internal environments to keep up with organizational strategies. Internal communication is relatively new field of study, and specifically little has been empirically examined about the effects of internal communication in the public and nonprofit sectors. Considering nonprofit and for-profit organizations are more likely to adopt innovation due to their flexibility than public organizations, it is important to better understand the impact of internal communication on employee driven innovation across these three sectors.

Using four years of the Korean Workplace Panel Survey (KWPS) during 2005 to 2011, which has been conducted every two years, this study examines two classifications with respect to the types of communication in the public, nonprofit and for-profit sector and their impacts on employee initiated innovation.

The first classification is the type of communication channel. Among face-to-face, electronic, and print communication channels, the use of electronic communication such as e-mail or intranet has been increasing significantly because it is convenient and easily approachable. However, face-to-face communication has been identified as a preferred channel in recent research. We find that face-to-face communication is positively associated with innovation in the nonprofit sector. However, it is marginally associated with innovation in the for-profit sector, and not associated in the public sector. On the other hand, we find that electronic communication is positively associated with innovation in the for-profit sector, but there is no such relationship in the nonprofit and public sectors.  

The second classification is whether the communication is one-way or two-ways. The one-way communication is defined when the direction of communication is only from  organizations to employees, including newsletter, bulletin board, regular informing e-mail, and intranet. The two-way communication contains meeting with executive director, senior directors’ fieldtrips, hotline with executive director, department meeting, and employee surveys, in all of which employees have an opportunity to present their opinions or attitudes. This paper finds that the two-way communication has a positive relationship with innovation in the nonprofit and for-profit sectors, but there is no significant relationship in the public sector. We also find that the one-way communication has a positive relationship with innovation in the for-profit sector, but there is no such relationship in the nonprofit and public sectors.

Finally, this paper finds that the greater the number of communication types used within an organization lead to the more employee driven innovation in the nonprofit and for-profit sectors. However, there is no such effect in the public sector. We conclude with an explanation as to why these differences are found and the implications for the nonprofit and public sectors.