The Mediating Effect of Organizational Culture on the Relationship between Entrepreneurial Orientation and Firm Performance in Nigeria

Abstract

The purpose of the study is to examine the mediating effect of organizational culture on the relationship between entrepreneurial orientation and firm performance in Nigerian small and medium enterprises (SMEs). Their relationship receives a considerable scholarly attention in the literature, but few studies have been conducted among Nigerian SMEs. SMEs are considered as important to the economic growth of Nigeria and they constitute the major source of employment and significantly contribute to the gross domestic production. Based on the theoretical consideration, a model was proposed to examine this relationship. A quantitative survey method was used, the data were collected from the owner/managers of SMEs in Kano – Nigeria. A total of 640 questionnaires distributed, 511 usable questionnaires were returned. Partial least squares structural equation modelling (PLS) was used for the data analysis. Based on the statistical findings, entrepreneurial orientation and organizational culture were significantly related to firm performance. Organizational culture was found to mediate on the relationship between EO to FP. The result of the present study has some practical implications: It will assist owner/managers of SMEs take the right decision on the importance of OC in their respective firms. The OC can help owner/managers with well-built EO to attain the maximum performance level in their organizations and remain relevant in their competitive market.

DOI: 10.5901/mjss.2014.v5n23p480