Do Organizational Culture Attributes Matter? For Small to Medium Sized Enterprises It Enhances or Acts in Place of Entrepreneurial Orientation

Abstract

Small to medium sized firms are an important yet remain an understudied context of business in the US. Most research on smaller firms centers on the entrepreneurial aspects of such firms and ignore other possible explanation for small firm success. Organizational culture has been shown in separate studies to positively impact firm outcomes but the combination of entrepreneurial orientation (EO) and firm culture has rarely been tested. We conducted an inquiry into the effects of both EO and cultural attributes on small firms by surveying 220 individuals working in small firms in a variety of capacities. What we confirmed was that EO does play a role; however organizational learning has significant explanatory power as to why firms innovate even when EO is absent and combined with cultural attributes of play and empowerment increase the predictive power of small firm innovation when EO is present. This contributes to the literature in extending small firm inquiry beyond EO and linking it with firm culture and conveys the message for practitioners that small firms need not be entrepreneurial in order to innovate provided they inspire organizational culture building such as playfulness, empowerment, and learning.