Role of innovation in the relationship between organizational culture and firm performance

Abstract

PurposeThe purpose of this paper is to examine the mediating role of innovation on the relationship between organizational culture and firm performance.Design/methodology/approachData for the study were collected through a survey from 154 branches of ten prominent banks in Turkey and responses were analyzed to assess the relationships between organizational culture, firm performance and organizational innovation.FindingsThe findings reveal that in the banking sector, although organizational culture and innovation have a direct and positive effect on the firm performance dimensions, organizational culture was found to have an insignificant regression coefficient on the dimensions of firm performance in the presence of organizational innovations.Practical implicationsThese findings provide useful insights for organizations, particularly in the banking industry, seeking to be competitive and responsive to environmental changes by successfully introducing innovations. Conclusions emphasize that mechanisms to encourage and foster an innovative culture in the organization are likely to facilitate the introduction, adoption and diffusion of innovations which, in turn, is likely to result in achievement of superior firm performance.Originality/valueOrganizational culture has been studied in the literature as one of the characteristics impacting the firm's performance. But there is a paucity of research which models and empirically studies the relationship between organizational culture and the firm performance. In addition, several researchers have studied organizational innovation as a driver of firm performance but fewer researchers have studied organizational innovations as being impacted by organizational culture. In this study, the paper examines the relationship between organizational culture and firm performance and the role of organizational innovation in this relationship. This research makes an important contribution to the existing literature by empirically examining the relationship between organizational culture, innovations and firm performance.

The Association of Knowledge Management, Organization Culture, and Innovation with Organizational Performance: A Case at Study Institute Research XYZ

“…This study does not support the research of [4] which shows a positive relationship between business performance and innovation [35]. [39] Empirical research examines the relationship of knowledge management to organizational performance through innovation and examines the relationship between organizational culture on organizational performance through innovation.…”

“…[39] Empirical research examines the relationship of knowledge management to organizational performance through innovation and examines the relationship between organizational culture on organizational performance through innovation. This research does not support the research of [18], [38] which states that knowledge management has an effect on organizational performance both directly and indirectly through innovation Empirically this research does not support [16], [21] which argued that organizational culture promotes innovation and organizational performance, but empirically this research supports the research of [25]; [37] which states that knowledge management has an effect on innovation but innovation has no pen attached to organizational performance and research [35] stating that organizational culture chews immediate effect on organizational performance but does not have an indirect effect on organizational performance through innovation.…”

“…The results of [35] revealed that in the banking sector, the organizational culture and innovation has a direct and positive effect on the company's performance, but the culture of the organization is found to have no significant regression coefficient on the company's performance with organizational innovation as mediation.…”

Social Capital and Firm Performance: Moderating Effect of Environmental Turbulence

“…Overiding focus may causes no significant impact of entrepreneurial culture on FP (Slater, Olson, & Finnegan, 2011). The complicated dimension of FP may provide poor relationship between EM and FP (Urkurt, Kumar, Kimzan, & Eminoglu, 2013). Reward philosophy may have indirect effect on FP (Wei, Frankwick, & Nguyen, 2012).…”

Dubaization of Istanbul: Insights from the Knowledge-Based Urban Development Journey of an Emerging Local Economy

“…In the 2000s Turkey's liberalization and democratization continued, resulting in remarkable GDP growth. In 2013 the innovation catch-up agenda was brought into the government's priority areas in order to sustain the economic progress (Uzkurt et al, 2013). Istanbul has served a pivotal role as the major center of economic development, with a dominant performance in Turkey's economic achievements (Sharma, 2012).…”