Main and Interaction Effects of ‘Power Distance’ and ‘Uncertainty Avoidance’ on Innovation in Small and Medium Enterprises in Egypt

Abstract

The main objective of this study was to investigate the direct and interaction effects of two of Hofstede’s cultural metrics, namely power distance and uncertainty avoidance, on organizational innovation in small and medium enterprises in Egypt. A structured questionnaire adapted from a previous study was distributed amongst employees from different managerial levels. 326 completed questionnaires were collected. Results suggested that the national culture influences the level of strategic innovation in small and medium enterprises operating in Egypt. Power distance enhances strategic innovation; however, uncertainty avoidance inhibits it. Studies on Egyptian enterprises, and Egyptian small and medium enterprises are fundamentally underrepresented in previous literature.