Investigating the Effect of Corporate Culture on the Performance of SMEs in Iran and Iraq with Regard to the Mediating Role of Entrepreneurship and the Moderating Role of National Culture

Small and medium-sized companies are a primary source for creating jobs and economic growth in developing countries, which cause economic diversification and the development of the private sector in these countries. According to the statistics of the European Economic Cooperation and Development Organization, small and medium enterprises comprise more than 95% of the business in the member countries of this organization. The share of these companies in the employment of member countries of the European Economic Cooperation and Development Organization is around 60 to 70 percent. In advanced countries such as Japan and Germany, the share of small and medium enterprises in the GDP is more than 50%, and in developing countries such as Thailand, it is 38%. In Iran, 94% of economic enterprises are small and medium type, and their share in GDP is 39%. 27683 (82%) of the 34252 operational industrial units in Iran's industrial states are active, including 9726 units with a capacity of less than 50%, 9597 units with a capacity between 50% and 70%, and 8360 units with a capacity of more than 70%. They have a percentage of activity.

 THEORETICAL FRAMEWORK:

Cameron and Quinn pay attention to the ethnic culture in the degree of intimacy between family members in the work environment. Ethnic culture is characterized by loyalty, ethics, commitment, traditionality, cooperation, teamwork, participation, awareness and personal development. Adhocracy culture is a dynamic, entrepreneurial, innovative and creative structure in the work environment. This culture focuses on the development of new products and services, adaptability, growth, Change, productivity, efficiency and experientialism are emphasized. Market culture is considered as a result-oriented culture in the workplace with an emphasis on winning, surpassing the competition, insisting on stock prices and market relations. The formality and structuring of positions and procedures, well-defined processes and smooth-moving organizations are often considered as the main characteristics of hierarchical culture.

The questionnaire’s face validity was established through evaluating the opinions of management professors and SMEs’ managers, and confirmatory factor analysis confirmed its construct validity. The Cronbach’s alphas of greater than 0.70 also confirmed the questionnaire’s reliability. Data gathered from the managers of SMEs was analyzed by conducting structural equation modeling.

Examining the effect of four types of culture on performance also showed that the effect of group culture is insignificant and the effect of three types of adhocracies, hierarchy and market culture on performance is significant, although the effect of hierarchy culture on performance is negative and the effect of adhocracy and market culture is positive. The result of the non-significant effect of ethnic culture on performance is inconsistent with the research results of prior researches. The results of their research indicate a positive and significant effect of group culture on performance.

 CONCLUSIONS & SUGGESTIONS:

Considering that the results of this research show that different types of corporate culture have an effect on the tendency to entrepreneurship and performance, therefore managers who want to increase this tendency should evaluate their organizational culture and adapt them accordingly. It is the responsibility of senior management to disseminate, promote, maintain or change organizational culture.