Linking experimental culture, improvisation capability and firm’s performance: a theoretical view

Abstract

Purpose This study aims to investigate the causal relationships within an experimental culture of improvisation capability and firm performance, following the logic of “culture-capability-performance” and building on informal institution theory and dynamic capability theory. Design/methodology/approach Data was mainly collected via on-site questionnaires from firm managers, and 196 valid questionnaires were analyzed using structural equation modeling to test the relationship among experimental culture, improvisation capability and firms’ performance. Findings Trust and support had a positive impact on firm spontaneity, while the effect of action promotion and error tolerance was not significant. Action promotion, trust and support demonstrate substantial positive effects on the creativity of a firm. Both dimensions of improvisation capability positively and significantly influence a firm’s performance. Research limitations/implications The research respondents were firm managers. Cross-sectional data were used to analyze the model, which may cause common method variance. The research context was limited to China, and the generalizability of the results needs to be considered. Practical implications Firms can cultivate a culture of trust and support to enhance their spontaneity and improvisation capability. They can encourage cross-departmental communication, empower employees with autonomy in decision-making, provide appropriate resource support for employees’ decisions and use praise and reward incentives to spur further innovation achievements. Originality/value This study addresses the gaps in a firm’s improvisation capability within a Chinese market context by theoretically and empirically examining the role of experimental culture and assessing the relationship among each of the dimensions of improvisation capability in relation to firm performance identified in this study.