The aim of this research is investigating Individual and organizational factors influencing innovation of bank’s managers in Khorasan province. As other researches say creativity may be the most important tool for managers and the key to market success and improved operating efficiencies. To illustrate innovation, in an organizational environment, examples of innovation are the implementation of ideas for restructuring, or saving of costs, improved communication, new technology for production processes, new organizational structure and new personnel plans or programs. Furthermore, innovation is regarded as something new which leads to change. This study is a correlative one since it seeks to investigate the relation between dependent and independent factors during 2009-2010. Statistical population of the research consists of all 170 private bank managers in Khorasan province; that by using simple random sampling 118 managers were selected. In this survey, the required data were collected by a questionnaire with the questions of five-point Likert scale. To measure reliability of the questionnaire, Cronbach’s alpha was obtained as 0.88, so it assured the reliability of the questionnaire. Furthermore the validity of the questionnaire was confirmed by experienced researchers. Descriptive statistics and inferential statistics (simple and multiple linear regressions) were used in order to analyze the data. Individual variable was made up of four components and organizational factors consisted of six components. Results of the survey indicated that organizational factors have a greater effect on managers’ innovation than individual factors. If all other variables are constant, 28.9% changes in innovation of managers are affected by the individual components. In addition, if all other variables are constant, components of organizational variable can explain 36% of innovation of managers. \"Knowledge and expertise\" is the most important individual factors influencing innovation of managers, and \"reward systems\" is the most effective component of organizational factors on managers\' innovation.

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