Abstract

This article demonstrates that a context characterized by cohesion, recognition, some degree of formalization, and decentralization can create a work climate that fosters innovation, enabling service firms to adapt better to their environment. The implementation of total  quality management (TQM) also influences the variables in the model. The results show that cohesion, recognition, decentralization, and formalization have a positive and significant influence on greater orientation to innovation in service firms and that this influence is greater in firms that have implemented TQM systems.

Key words: Total quality management (TQM), orientation to innovation, cohesion, recognition, formalization, decentralization.