Determinig the Effect of Organizational Culture on Small and Medium Enterprises Performance: A SEM Approach

Abstract

The objective of this study is to investigate the relationship of organizational culture on small and medium enterprise (SME) performance, underpinned by contingency theory, and the structural equation modelling (SEM) for data analysis. 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 served as the major source of employment and significantly contribute to the the gross domestic production. Based on the theoretical consideration, a model was proposed to examine this relationship. A quantitative method was used with a total of 640 questionnaires, self – administered to the owner/managers of SMEs in Nigeria. A total of 511 questions was duly completed and returned representing 79.8% response rate. The study finding is in support of previous studies who have suggested the negative relationship of organizational culture and firm performance in many organizations. The finding from this study will benefit SME owner/managers, regulatory agency ie small and medium enterprise development agency of Nigeria, it will also help in policy formulation and will serve as a frame of future reference.