The Relationship between Organizational Culture and Small‐firm Performance: Entrepreneurial Orientation as Mediator

Abstract

The importance of organizational culture to a small firm's entrepreneurial orientation (EO) and performance has been extensively investigated in the literature, but little attention has been paid to understanding the mechanisms underlying these relationships. In the present study, we mobilized the competing values framework (CVF) to examine the relationships between key dimensions of organizational culture (i.e., adhocracy, clan, hierarchy, and market) and EO (i.e., innovativeness, risk‐taking, and proactiveness) and their effects on the performance of small firms. Our study of 106 small Tunisian firms provides empirical evidence for the mediating role of EO, through which adhocracy and market cultures influence small‐firm performance by fostering innovative and proactive behaviors. We discuss the implications of these findings for theory and practice.

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