Article2019

Impact of cultural intelligence on SME performance

Raavee Kadam · Waheed Kareem Abdul · Shazi Shah Jabeen

40 citations0/0 files storedJournal of Organizational Effectiveness People and Performance

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International Student and Expatriate Challenges Entrepreneurship Studies and Influences Migration, Ethnicity, and Economy

Abstract

Purpose In environments characterized by high cultural diversity, the ability to understand the cultural makeup of the workforce and the environment would equip business owners with knowledge required to innovate, take risks and proactively change their business offerings. Drawing on the upper echelons theory and action-characteristics model of entrepreneurship, the purpose of this paper is to test how competencies of small business owners, namely, cultural intelligence (CQ) and entrepreneurial orientation (EO) contribute to the performance of their firms. Design/methodology/approach Using a sample of 106 small and medium enterprises (SMEs) from the UAE, the data were collected through structured questionnaires and analyzed using partial least squares–structural equations modeling. Findings Results showed that CQ of the SME owner has a positive effect on firm performance (FP) through the mediating role of EO. Also, CQ of the SME owner was found to have a direct effect on FP, thus asserting its importance as a valuable competency that SME owners need to cultivate when operating in a multicultural environment. Practical implications Skills of the top managers greatly influence the choices and decisions they make, which in turn impact the effectiveness of their organizations. This study focuses on the role of managerial competencies that need to be cultivated among SME owners that would contribute to the growth of their firms. Originality/value This research studies the role of an individual’s cross-cultural and entrepreneurial competencies that enable the organization to achieve higher performance.

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References

2003Common method biases in behavioral research: A critical review of the literature and recommended remedies.1986Self-Reports in Organizational Research: Problems and Prospects 1984Upper Echelons: The Organization as a Reflection of Its Top Managers 2015Common Method Bias in PLS-SEM 1996Clarifying the Entrepreneurial Orientation Construct and Linking It To Performance 2001Accounting for common method variance in cross-sectional research designs.1989Strategic management of small firms in hostile and benign environments 1983The Correlates of Entrepreneurship in Three Types of Firms

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