The Effect of Organizational Culture on Entrepreneurial Orientation: A Comparison between Germany and Thailand

Abstract

Prior research has emphasized the positive impact of a firm's entrepreneurial orientation on its performance. An unanswered question concerns what organizational antecedents and drivers foster entrepreneurial orientation. Based on a sample of 643 German and Thai companies, this study analyzes how organizational culture influences a firm's entrepreneurial orientation and how this relationship is influenced by national culture. Results show that an organizational culture that is an adhocracy is most effective in advancing entrepreneurial orientation, especially in national cultures that are characterized by strong individualism and low power distance, whereas a hierarchical organizational culture is generally a barrier to entrepreneurial orientation.

Notes

12. Ma, Huang, and Shenkar (2011) summarize the debate concerning whether nations can be proxies for cultures by arguing that nations are adequate proxies for cultures, citing two major reasons: from a theoretical perspective, there are shared forces on the nation level, such as similar history, language, and education, that lead to cultural homogeneity in nations (Hofstede 2001). From an empirical perspective, extant research indicates that nations tend to have homogenous national cultures that are heterogeneous to other national cultures (e.g., Smith, Dugan, and Trompenaars 1996). In other words, cultural differences between nations tend to be greater than cultural differences within nations.

13. As we included in our survey indicators measuring financial firm performance (as used in the study on EO from Wiklund and Shepherd 2005), we also linked the EO construct to performance in both the German (0.15; p < .05) and Thai sample (0.19; p < .01) as an additional analysis. As the regression coefficients and significance levels show, EO is positively related to firm performance in both countries, confirming extant research on EO's performance consequences.

Additional information

Notes on contributors

Andreas Engelen

Andreas Engelen is full professor at the Department of Strategic and International Management, TU Dortmund, Martin‐Schmeißer 12, 44227 Dortmund, Germany.

Tessa Christina Flatten

Tessa Christina Flatten is post doc at the Chair of Entrepreneurship, RWTH Aachen University, 52072, Aachen, Germany.

Julia Thalmann

Julia Thalmann is researcher at the Chair of Entrepreneurship, RWTH Aachen University, 52072, Aachen, Germany.

Malte Brettel

Malte Brettel is full professor at the Chair of Entrepreneurship, RWTH Aachen University, 52072, Aachen, Germany.