The Impact of Organizational Culture on Business Innovativeness: The Case of SME’s

Abstract

Τhe majority of studies in the ‘80s and ‘90s proposed that a strong culture is essential to the success of an organization. However, some researchers have since disputed this claim, arguing that while some strong cultures lead to success, others fail. Examining several examples from the market, over time, the so-called "case for a strong culture" presents significant weaknesses. The present study, based on the Competing Values Model, examines the effects of a culture’s strength on the innovativeness of the organization. A sample of 110 Greek Small and Medium Enterprises (SMEs) was examined, of which a total of 504 people responded to a questionnaire. The participating companies range in size, in terms of the number of their staff, from 20 to 250 members, and come from different market segments. The results showed that organizational culture strength is inversely related to a company’s innovativeness and that strong cultures have a negative impact on a company’s innovativeness. The main objective of this research is to reinforce the existing knowledge in the relationship between culture and innovativeness, especially in the field of small and medium enterprises since the vast majority of studies concern culture comparisons between large companies using mainly small samples. The focus of this research is on the growing importance of culture given the globalization of the market, the increasing pace of mergers, acquisitions, and strategic alliances between companies with different cultures.