Organizational Culture and Open Innovation Performance in Small and Medium-sized Enterprises in Tunisia

Abstract

The purpose of this research is to investigate the relationships of organizational culture; utilization of open innovation (OI); and performance of medium-sized enterprises (SMEs). To test its hypotheses, the research assumes that there will exist a relationship between the organization's innovative culture (IC), which encourages employee creativity and learning, and both employee collaboration, and the variety of OI sources an organization utilizes. Additionally, the research tests the assumption that when an organization has an effective IC, it will generate higher levels of innovativeness, operational efficiency, and financial success. Data were collected from a sample of 263 SMEs in both the manufacturing and service sectors located in Tunisia. Structural Equation Modeling (SEM), utilizing AMOS software, was utilized to analyze the data. Results of the SEM revealed that IC had a statistically significant positive relationship with the number of OI sources utilized. IC also had a statistically significant positive effect on both an operational performance index and ROI (return on investment). These results indicate that creating an IC may be beneficial for companies; however, it is unlikely to result in increased product innovations. Instead, it is more probable to create improvements in the way processes are performed; in administrative functions; in marketing innovation; and in overall operational efficiency due to employee collaboration and knowledge sharing. This research adds to the body of literature around management science in that it provides further insight into how IC influences the use of OI and the resultant measures of operational and financial performance of SMEs.