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Small businesses play a vital role in small economies. According to Eurostat, 99.8% of businesses in Latvia are small and medium-sized enterprises (SMEs), creating 79% of jobs and 70% of gross added value [1]. Thus, their ability to create value and to sustain competitive advantage through innovation is essential for economic development and growth. Yet many small businesses might face challenges of limited capacity, personnel and insufficient resources for long-term investments in research and development. And, besides the lack of resources, such businesses might not see the benefits of innovation. Implementation of organizational innovation could provide them a way to improve competitiveness and also become a stepping stone to foster other types of innovation. The purpose of this study is to analyze the effects of organizational culture (OC) on organizational innovation in SMEs via an empirical study of businesses from various industries. The study assesses four dimensions of the OC adopted from Denison and Spreitzer (1991)-Team, Development, Result-orientation and Consistency [2]. And it evaluates the impact of the OC on product, process, marketing and organizational innovation performance in selected companies. The study confirms that OC and innovation indicators are closely related. Stronger and more developed OC in any of the four aforementioned dimensions leads to better innovation performance. This relation is particularly strong for organizational innovation, thus the impact is further analyzed using a regression model. This study finds Development-orientation and Consistency as the most significant factors, explaining 44.6% of the total variation in the organizational innovation performance. This study contributes to research on small and medium-sized business innovation.

Purpose The purpose of this paper is to analyse generational differences with regard to honest behaviour and honesty as a personal value in post-Soviet business environment: in Estonia and Latvia. Design/methodology/approach In total, 781 service employees from six retail organizations in Estonia and Latvia were surveyed to assess likelihood of dishonest behaviour and to rank their values according to the Rokeach instrumental value scale. Findings Older generations report higher likelihood of honest behaviour than younger generations. Post-war and early generation X, born between 1945 and 1970, also rate honesty and responsibility higher as their individual values. Originality/value The complexity of generational differences in ethical behaviour and honesty as a personal value has not been widely researched in post-Soviet business environment.

Innovations can provide small and medium-sized enterprises (SMEs) a significant competitive advantage considering the ambiguous business environment. SMEs may face lower capacity and more constrained funding for long-term investments, however, understanding innovation in a broader sense and looking into organizational structures, behaviors and processes, SMEs have an opportunity to become more competitive. This study analyzes the impact of ethical behavior as a part of an organizational culture on organizational innovation performance in SMEs. Six hundred SMEs in Latvia were surveyed to assess whether employees follow the principles of business ethics in their work and what is the organizational innovation performance in these enterprises. We found that more ethical behavior leads to better organizational innovation performance, and that the size of enterprise is the most significant factor affecting this relationship. The study proposes insights that contribute to theoretical and practical discussions on fostering small businesses innovation in small economies.

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Socio-cultural factors – shared values, norms and attitudes are significant, but less acknowledged sources of international competitiveness. Previous studies have found socio-cultural factors positively affecting various aspects of international competitiveness – entrepreneurship, innovation, productivity and international cooperation. These factors are more sustainable and less affected by external environment changes in comparison with the traditional factors. Socio-cultural factors provide an opportunity to develop competitiveness strategies based on unique advantages. This research aims to explore the impact of socio-cultural factors on international competiveness in small, open economies. Analysing relationship between 400 socio-cultural indicators and competitiveness indicators such as productivity, economic development, business and government efficiency, innovation capacity and infrastructure in 37 countries, six socio-cultural factors have emerged: Collectivism and Hierarchy; Future, Cooperation and Performance Orientation, Self-expression, Monochronism and Rationality, Economic Orientation and Social structure. The first factor – Collectivism and Hierarchy – tends to reduce the international competitiveness; the other five affect it positively.

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Workplaces are becoming increasingly diverse, and businesses constantly face the challenge of ensuring work ethics to strengthen competitiveness. Workplace ethics is affected not just by potential gains and losses of unethical action but also by employee morale, values and self-concept. The ethical reasoning process depends on both perception of what is ethical and the ability to justify unethical action in a given situation. In this study, we explore the role of individual, organisational and situational factors influencing the perceived degree of unethical behaviour at work. Individual socio-cultural factors include personal values, such as honesty, and socio-demographic factors, such as age, gender, education and tenure. Organisational factors are assessed through espoused values of honesty and responsibility. Finally, three situational factors are randomly introduced – low wage, boredom and perceived injustice. Two hundred and eight retail employees were surveyed to assess their personal values and the perceived degree of unethical behaviour at work. We found that honesty as a personal value changes ethical reasoning, especially when situational factors, such as low wage are introduced. Moreover, older employees tend to report more ethical behaviour in the workforce. We also concluded that declaring honesty and responsibility as organisational values could have a minor positive impact on ethical behaviour mitigating the impact of the introduced situational factors. Keywords: Socio-cultural factors, values, workplace diversity, business ethics, ethical reasoning