When Fairness Sparks Innovation: How Internal Systems Strengthen Creative Collaboration

What is it about?

This study investigates how organizations convert cross-functional fairness—equitable treatment and cooperation among departments—into product innovativeness. It proposes that this link depends on how firms manage internal resources and conflict. Specifically, it examines whether structural features like job rotation and internal rivalry, and conflict-resolution styles such as integration or avoidance, shape how fairness across functions leads to innovation. Together, these mechanisms determine whether fairness fosters collaboration or falters amid competition. Using data from over 200 Canadian firms, the study shows that cross-functional fairness boosts innovation when employees rotate across departments and resolve disagreements through integrative conflict handling—seeking win–win solutions. In contrast, fairness fails to drive innovation when internal rivalry is high or when employees avoid conflict. The findings suggest that innovation thrives not just on fair treatment but on systems and behaviors that promote knowledge sharing, open dialogue, and collective problem-solving. For organizations, these findings underscore that fairness alone is not enough to spur innovation—it must be embedded within supportive structures and healthy conflict management. Firms should encourage job rotation to build understanding across departments, reduce internal competition that breeds divisiveness, and promote constructive discussions that turn disagreements into creative energy. By building trust and collaboration across functions, companies can better align diverse perspectives and generate new ideas that drive performance.

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Photo by Sable Flow on Unsplash

Photo by Sable Flow on Unsplash

Why is it important?

This study is unique in linking cross-functional fairness with product innovation through the dual lenses of internal resource and conflict management. It identifies how fairness becomes a true driver of innovation only when paired with specific organizational mechanisms—job rotation, low rivalry, and integrative conflict resolution—that enable learning and cooperation. Its timeliness lies in addressing the challenge facing many firms in Canada and beyond: how to manage fairness and conflict in complex, interdependent work environments. As organizations rely increasingly on cross-functional collaboration to innovate, this research highlights the need to balance fairness with active coordination and constructive tension. By doing so, firms can transform fairness from a moral ideal into a strategic advantage for innovation.