The relationship between corporate culture of SMEs and crisis response ability under the cross-cultural background

Fengyu Zhao, Vesarach Aumeboonsuke

Article ID: 6684
Vol 8, Issue 10, 2024

VIEWS - 1105 (Abstract)

Abstract


This research explores the critical influence of corporate culture on small and medium-sized enterprises’ (SMEs) crisis response abilities under varied cross-cultural environments. Amid the disruptive backdrop of the COVID-19 pandemic, SMEs globally have faced unprecedented challenges. This study addresses a gap in the existing literature by conducting a cross-cultural analysis of SMEs in China, Thailand, and Germany to understand how corporate culture affects crisis management. Utilizing a competitive cultural value model, the research categorizes corporate culture into four dimensions: group culture, development culture, hierarchy culture, and rational culture. These cultural dimensions are investigated in relation to their impact on crisis response abilities. Additionally, national cultural dimensions such as individualism and uncertainty avoidance are examined as moderating variables. The findings reveal that group and development cultures positively influence crisis response abilities, enhancing organizational resilience and adaptability. Conversely, hierarchy culture negatively affects crisis management, hindering flexible response strategies. Rational culture supports structured crisis response through goal-oriented practices. National culture significantly moderates these relationships, with individualism and high uncertainty avoidance impacting the effectiveness of organizational cultural dimensions in crisis scenarios. This study offers theoretical advancements by integrating cultural dimensions with crisis response strategies and provides practical implications for SMEs striving to enhance their resilience and adaptability in a globalized business environment.


Keywords


corporate culture; crisis response ability; cross-cultural; SMEs; competitive cultural value model

Full Text:

PDF


References

  1. Acharya, A. S., Prakash, A., Saxena, P., & Nigam, A. (2013). Sampling: Why and how of it. Indian Journal of Medical Specialties, 4(2), 330–333. https://doi.org/10.7713/ijms.2013.0032
  2. Albulescu, C. T. (2021). COVID-19 and the United States financial markets’ volatility. Finance research letters, 38, 101699. https://doi.org/10.1016/j.frl.2020.101699
  3. Alkhawlani, M. A. S., Bohari, A. M., & Shamsuddin, J. (2021). The moderating effect of crisis experience on the relationship between transformational leadership, decision-making styles and crisis management in Yemen organisations. International Journal of Business Continuity Risk Management, 11(2–3), 156–171. https://doi.org/10.1504/IJBCRM.2021.116277
  4. Alves, J. C., Lok, T. C., Luo, Y., & Hao, W. (2020). Crisis management for small business during the COVID-19 outbreak: Survival, resilience and renewal strategies of firms in Macau. Research Square. https://doi.org/10.21203/rs.3.rs-34541/v1
  5. Asuero, A. G., Sayago, A., & González, A. (2006). The correlation coefficient: An overview. Critical reviews in analytical chemistry, 36(1), 41–59. https://doi.org/10.1080/10408340500526766
  6. Bao, X., Sun, B., Han, M., et al. (2023). Corporate integrity culture on environmental, social, and governance (ESG) performance. Corporate Social Responsibility and Environmental Management, 31(2), 1399–1417. https://doi.org/10.1002/csr.2637
  7. Bhaduri, R. M. (2019). Leveraging culture and leadership in crisis management. European Journal of Training and Development, 43(5/6), 554–569. https://doi.org/10.1108/ejtd-10-2018-0109
  8. Boin, A., & Hart, P. T. (2010). Organising for effective emergency management: Lessons from research 1. Australian Journal of Public Administration, 69(4), 357–371. https://doi.org/10.1111/j.1467-8500.2010.00694.x
  9. Brettel, M., Chomik, C., & Flatten, T. C. (2015). How organizational culture influences innovativeness, proactiveness, and risk‐taking: Fostering entrepreneurial orientation in SMEs. Journal of Small Business Management, 53(4), 868–885. https://doi.org/10.1111/jsbm.12108
  10. Çakar, N. D., & Ertürk, A. (2010). Comparing innovation capability of small and medium‐sized enterprises: examining the effects of organizational culture and empowerment. Journal of Small Business Management, 48(3), 325–359. https://doi.org/10.1111/j.1540-627x.2010.00297.x
  11. Cameron, K. S. (1985). Cultural Congruence, Strength, and Type: Relationships to Effectiveness. The Review of Higher Education, 9(1), 121–121. https://doi.org/10.1353/rhe.1985.0034
  12. Cannon, M. D., & Edmondson, A. C. (2005). Failing to learn and learning to fail (intelligently): How great organizations put failure to work to innovate and improve. Long Range Planning, 38(3), 299–319. https://doi.org/10.1016/j.lrp.2005.04.005
  13. Chatterjee, S., & Hadi, A. S. (2015). Regression analysis by example. John Wiley & Sons. https://doi.org/10.1080/02664763.2013.817041
  14. Clampit, J. A., Lorenz, M. P., Gamble, J. E., & Lee, J. (2022). Performance stability among small and medium-sized enterprises during COVID-19: A test of the efficacy of dynamic capabilities. International Small Business Journal, 40(3), 403–419. https://doi.org/10.1177/02662426211033270
  15. Cochran, W. G. (1977). Sampling Techniques, 3rd ed. John Wiley & Sons, New York.
  16. Coombs, T., & Holladay, S. (2015). CSR as crisis risk: expanding how we conceptualize the relationship. Corporate Communications: An International Journal, 20(2), 144–162. https://doi.org/10.1108/ccij-10-2013-0078
  17. Corral de Zubielqui, G., & Harris, H. (2024). Why the COVID-19 Crisis Is an Ethical Issue for Business: Evidence from the Australian JobKeeper Initiative. Journal of Business Ethics, 190(1), 123–136. https://doi.org/10.1007/s10551-023-05392-2
  18. Deshpandé, R., & Farley, J. U. (2004). Organizational culture, market orientation, innovativeness, and firm performance: an international research odyssey. International Journal of research in Marketing, 21(1), 3–22. https://doi.org/10.1016/j.ijresmar.2003.04.002
  19. Deverell, E., & Olsson, E. K. (2010). Organizational culture effects on strategy and adaptability in crisis management. Risk Management, 12(2), 116–134. https://doi.org/10.1057/rm.2009.18
  20. Etikan, I., & Bala, K. (2017). Sampling and sampling methods. Biometrics & Biostatistics International Journal, 5(6), 00149. https://doi.org/10.15406/bbij.2017.05.00149
  21. Fey, C. F., & Denison, D. R. (2003). Organizational culture and effectiveness: Can American theory be applied in Russia? Organization science, 14(6), 686–706. https://doi.org/10.1287/orsc.14.6.686.24868
  22. Flamholtz, E. G., & Randle, Y. (2012). Corporate culture, business models, competitive advantage, strategic assets and the bottom line: Theoretical and measurement issues. Journal of Human Resource Costing & Accounting, 16(2), 76–94.
  23. Fleming, P. (2009). Authenticity and the cultural politics of work: New forms of informal control. Oxford University Press. https://doi.org/10.1093/acprof:oso/9780199547159.001.0001
  24. Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of marketing research, 18(1), 39–50. https://doi.org/10.1177/002224378101800104
  25. Foster, T. A. (2017). Budget planning, budget control, business age, and financial performance in small businesses. Available online: https://scholarworks.waldenu.edu/cgi/viewcontent.cgi?article=4708&context=dissertations (accessed on 17 March 2024).
  26. Freiling, J. (2015). Business model innovation—A concept between organizational renewal and industry transformation. Journal of Entrepreneurship, Management and Innovation, 11(1), 3–10. https://doi.org/10.7341/20151111
  27. Gallato, C. G., Rashid, S., Warokka, A., et al. (2012). Fostering niches among SMEs in Malaysia through organizational commitment, leadership, organizational culture and job satisfaction. Journal of Innovation Management in Small & Medium Enterprises, 1–12. https://doi.org/10.5171/2012.511352
  28. Graham, J. R., Grennan, J., Harvey, C. R., & Rajgopal, S. (2022). Corporate culture: Evidence from the field. Journal of Financial Economics, 146(2), 552–593. https://doi.org/10.1016/j.jfineco.2022.07.008
  29. Groysberg, B., Lee, J., Price, J., & Cheng, J. (2018). The leader’s guide to corporate culture. Harvard Business Review, 96(1), 44–52.
  30. Hafeez, K., Zhang, Y., & Malak, N. (2002). Core competence for sustainable competitive advantage: a structured methodology for identifying core competence. IEEE Transactions on Engineering Management, 49(1), 28–35. https://doi.org/10.1109/17.985745
  31. Hair, J. F., Sarstedt, M., Ringle, C. M., & Mena, J. A. (2012). An assessment of the use of partial least squares structural equation modeling in marketing research. Journal of the Academy of Marketing Science, 40, 414–433. https://doi.org/10.1007/s11747-011-0261-6
  32. Halabi, A. K., Barrett, R., & Dyt, R. (2010). Understanding financial information used to assess small firm performance: An Australian qualitative study. Qualitative Research in Accounting & Management, 7(2), 163–179. https://doi.org/10.1108/11766091011050840
  33. Hillary, R. (2017). Small and medium-sized enterprises and the environment: business imperatives. Routledge.
  34. Hofstede, G. (1984). Cultural dimensions in management and planning. Asia Pacific Journal of Management, 1, 81–99. https://doi.org/10.1007/bf01733682
  35. Hofstede, G. (1986). The usefulness of the ‘organizational culture’ concept. Journal of Management Studies, 23(3), 253–257. https://doi.org/10.1111/j.1467-6486.1986.tb00952.x
  36. Hofstede, G. (2011). Dimensionalizing cultures: The Hofstede model in context. Online readings in psychology and culture, 2(1), 8. https://doi.org/10.9707/2307-0919.1014
  37. Ifinedo, P. (2014). Information systems security policy compliance: An empirical study of the effects of socialisation, influence, and cognition. Information & Management, 51(1), 69–79. https://doi.org/10.1016/j.im.2013.10.001
  38. Iivari, J., & Huisman, M. (2007). The relationship between organizational culture and the deployment of systems development methodologies. Mis Quarterly, 35–58. https://doi.org/10.2307/25148780
  39. Israel, G. D. (1992). Determining Sample Size. Available online: https://www.researchgate.net/profile/Subhash-Basu-3/post/how_could_i_determine_sample_size_for_my_study/attachment/5ebaa4924f9a520001e613b6/AS:890361492811785@1589290130539/download/samplesize1.pdf (accessed on 17 March 2024).
  40. Jaccard, J., & Turrisi, R. (2003). Interaction effects in multiple regression. SAGE.
  41. Jiang, L., & Li, X. (2010). Discussions on the Improvement of the Internal Control in SMEs. International Journal of Business and Management, 5(9), 214. https://doi.org/10.5539/ijbm.v5n9p214
  42. Karvonen, T., Sharp, H., & Barroca, L. (2018). Enterprise agility: Why is transformation so hard? In: Proceedings of the Agile Processes in Software Engineering and Extreme Programming: 19th International Conference; 21–25 May 2018; Porto, Portugal.
  43. Ketprapakorn, N., & Kantabutra, S. (2019). Culture development for sustainable SMEs: Toward a behavioral theory. Sustainability, 11(9), 2629. https://doi.org/10.3390/su11092629
  44. Kettaneh, N., Berglund, A., & Wold, S. (2005). PCA and PLS with very large data sets. Computational Statistics & Data Analysis, 48(1), 69–85. https://doi.org/10.1016/j.csda.2003.11.027
  45. Khan, M. A., & Panarina, E. (2017). The role of national cultures in shaping the corporate management cultures: A four countries theoretical analysis. Journal of Eastern European and Central Asian Research, 4(1). https://doi.org/10.15549/jeecar.v4i1.152
  46. Klein, D. F. (2005). Beyond significance testing: Reforming data analysis methods in behavioral research. American Journal of Psychiatry, 162(3), 643–644. https://doi.org/10.1176/appi.ajp.162.3.643-a
  47. Kudej, M., Gavurova, B., & Rowland, Z. (2021). Evaluation of the selected economic parameters of Czech companies and their potential for overcoming global crises during the Covid-19 pandemic. Journal of International Studies, 14(1), 258–275. https://doi.org/10.14254/2071-8330.2021/14-1/18
  48. Kumar, V., Alshazly, H., Idris, S. A., & Bourouis, S. J. S. (2021). Evaluating the impact of covid-19 on society, environment, economy, and education. 13(24), 13642. https://doi.org/10.3390/su132413642
  49. Ladzani, M. W. (2022). The impact of COVID-19 on small and micro-enterprises in South Africa. International Journal of Global Environmental Issues, 21(1), 23–38. https://doi.org/10.1504/IJGENVI.2022.122935
  50. Levin, D. T. (2000). Race as a visual feature: using visual search and perceptual discrimination tasks to understand face categories and the cross-race recognition deficit. Journal of Experimental Psychology: General, 129(4), 559. https://doi.org/10.1037/0096-3445.129.4.559
  51. Louangrath, P. (2017). Minimum sample size method based on survey scales. International Journal of Research & Methodology in Social Science, 3(3), 44–52. https://doi.org/10.5281/zenodo.1322593
  52. Lowry, P. B., & Gaskin, J. (2014). Partial least squares (PLS) structural equation modeling (SEM) for building and testing behavioral causal theory: When to choose it and how to use it. IEEE Transactions on Professional Communication, 57(2), 123–146. https://doi.org/10.1109/TPC.2014.2312452
  53. Lu, L., Peng, J., Wu, J., & Lu, Y. (2021). Perceived impact of the Covid-19 crisis on SMEs in different industry sectors: Evidence from Sichuan, China. International Journal of Disaster Risk Reduction, 55, 102085. https://doi.org/10.1016/j.ijdrr.2021.102085
  54. Lu, Y., Wu, J., Peng, J., & Lu, L. (2020). The perceived impact of the Covid-19 epidemic: evidence from a sample of 4807 SMEs in Sichuan Province, China. Environmental Hazards, 19(4), 323–340. https://doi.org/10.1080/17477891.2020.1763902
  55. Mao, Y. (2021). Political institutions, state capacity, and crisis management: A comparison of China and South Korea. International Political Science Review, 42(3), 316–332. https://doi.org/10.1177/0192512121994026
  56. Margherita, A., & Heikkilä, M. (2021). Business continuity in the COVID-19 emergency: A framework of actions undertaken by world-leading companies. Business Horizons, 64(5), 683–695. https://doi.org/10.1016/j.bushor.2021.02.020
  57. Maull, R., Brown, P., & Cliffe, R. (2001). Organisational culture and quality improvement. International Journal of Operations & Production Management, 21(3), 302–326. https://doi.org/10.1108/01443570110364614
  58. Midi, H., Sarkar, S. K., & Rana, S. (2010). Collinearity diagnostics of binary logistic regression model. Journal of interdisciplinary mathematics, 13(3), 253–267. https://doi.org/10.1080/09720502.2010.10700699
  59. Ni, G., Xu, H., Cui, Q., et al. (2020). Influence mechanism of organizational flexibility on enterprise competitiveness: The mediating role of organizational innovation. Sustainability, 13(1), 176. https://doi.org/10.3390/su13010176
  60. Obi, C. N., Leggett, C., & Harris, H. (2020). National culture, employee empowerment and advanced manufacturing technology utilisation: A study of Nigeria and New Zealand. Journal of Management & Organization, 26(4), 460–482. https://doi.org/10.1017/jmo.2017.70
  61. Pech, M., & Vrchota, J. (2020). Classification of small-and medium-sized enterprises based on the level of industry 4.0 implementation. Applied Sciences, 10(15), 5150. https://doi.org/10.3390/app10155150
  62. Peeters, M., Denkers, A., & Huisman, W. (2020). Rule violations by SMEs: The influence of conduct within the industry, company culture and personal motives. European Journal of Criminology, 17(1), 50–69. https://doi.org/10.1177/1477370819874447
  63. Podsakoff, P. M., MacKenzie, S. B., Lee, J. Y., & Podsakoff, N. P. (2003). Common method biases in behavioral research: a critical review of the literature and recommended remedies. Journal of Applied Psychology, 88(5), 879. https://doi.org/10.1037/0021-9010.88.5.879
  64. Prasongsukarn, K. (2009). Validating the cultural value scale (CVSCALE): A case study of Thailand. ABAC Journal, 29(2).
  65. Quinn, R. E., Hildebrandt, H. W., Rogers, P. S., & Thompson, M. P. (1991). A competing values framework for analyzing presentational communication in management contexts. The Journal of Business Communication, 28(3), 213–232. https://doi.org/10.1177/002194369102800303
  66. Quinn, R. E., & Rohrbaugh, J. (1983). A spatial model of effectiveness criteria: Towards a competing values approach to organizational analysis. Management Science, 29(3), 363–377. https://doi.org/10.1287/mnsc.29.3.363
  67. Schein, E. H. (1993). How Can Organizations Learn Faster? The Problem of Entering the Green Room. Sloan Management Review, 34(2), 85.
  68. Schneider, B., Ehrhart, M. G., & Macey, W. H. (2013). Organizational climate and culture. Annual Review of Psychology, 64, 361–388. https://doi.org/10.1146/annurev-psych-113011-143809
  69. Shuaib, K. M., & He, Z. (2021). Impact of organizational culture on quality management and innovation practices among manufacturing SMEs in Nigeria. Quality Management Journal, 28(2), 98–114. https://doi.org/10.1080/10686967.2021.1886023
  70. Simboli, A., Taddeo, R., & Morgante, A. (2014). Value and wastes in manufacturing. An overview and a new perspective based on eco-efficiency. Administrative Sciences, 4(3), 173–191. https://doi.org/10.3390/admsci4030173
  71. Smith, P. B., Dugan, S., & Trompenaars, F. (1996). National culture and the values of organizational employees: A dimensional analysis across 43 nations. Journal of cross-cultural psychology, 27(2), 231–264. https://doi.org/10.1177/0022022196272006
  72. Sousa‐Poza, A., Nystrom, H., & Wiebe, H. (2001). A cross‐cultural study of the differing effects of corporate culture on TQM in three countries. International Journal of Quality and Reliability Management, 18(7), 744–761. https://doi.org/10.1108/eum0000000005778
  73. Stolzenberg, R. M. (2004). Multiple regression analysis. In: Handbook of Data Analysis. Sage Publications Ltd.
  74. Tang, G., Park, K., Agarwal, A., & Liu, F. (2020). Impact of innovation culture, organization size and technological capability on the performance of SMEs: The case of China. Sustainability, 12(4), 1355. https://doi.org/10.3390/su12041355
  75. Taras, V., Steel, P., & Kirkman, B. L. (2011). Three decades of research on national culture in the workplace: Do the differences still make a difference? Organizational Dynamics, 40(3), 189–198. https://doi.org/10.1016/j.orgdyn.2011.04.006
  76. Triandis, H. C. (1994). Cross-cultural industrial and organizational psychology. International Business Review, 23(1), 27–31.
  77. Tung, R. L., & Verbeke, A. (2010). Beyond Hofstede and GLOBE: Improving the quality of cross-cultural research. Journal of International Business Studies, 41, 1259–1274. https://doi.org/10.1057/jibs.2010.41
  78. Williams, R. (1983). Writing in society. Verso.
  79. Williams, T. A., Gruber, D. A., Sutcliffe, K. M., et al. (2017). Organizational response to adversity: Fusing crisis management and resilience research streams. Academy of management annals, 11(2), 733–769. https://doi.org/10.5465/annals.2015.0134
  80. Wu, Z., & McGoogan, J. M. (2020). Characteristics of and important lessons from the coronavirus disease 2019 (COVID-19) outbreak in China: summary of a report of 72314 cases from the Chinese Center for Disease Control and Prevention. Jama, 323(13), 1239–1242. https://doi.org/10.1001/jama.2020.2648
  81. Yoo, B., & Shin, G. C. (2017). Invariant effect of individual cultural orientations: an application of CVSCALE. International Marketing Review, 34(6), 735–759. https://doi.org/10.1108/imr-03-2015-0055
  82. Zhong, K., Liu, Y., & Christensen, T. (2022). Crisis coordination in centralized regimes: Explaining China’s strategy for combatting the COVID-19 pandemic. International Public Management Journal, 25(7), 1131–1150. https://doi.org/10.1080/10967494.2022.2073411


DOI: https://doi.org/10.24294/jipd.v8i10.6684

Refbacks

  • There are currently no refbacks.


Copyright (c) 2024 Fengyu Zhao, Vesarach Aumeboonsuke

License URL: https://creativecommons.org/licenses/by/4.0/

This site is licensed under a Creative Commons Attribution 4.0 International License.