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Impact of cultural intelligence on SME performance: The mediating effect of entrepreneurial orientation

Raavee Kadam (Department of Humanities and Social Sciences, Birla Institute of Technology and Science Pilani, Jhunjhunu, India)
Srinivasa Rao (Department of OB and HRM, ICFAI Business School, Hyderabad, India)
Waheed Kareem Abdul (Institute of Management Technology, Dubai, United Arab Emirates)
Shazi Shah Jabeen (Department of Humanities and Social Sciences, Birla Institute of Technology and Science Pilani Dubai Campus, Dubai, United Arab Emirates)

Journal of Organizational Effectiveness: People and Performance

ISSN: 2051-6614

Article publication date: 20 September 2019

Issue publication date: 7 October 2019

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.

Keywords

Citation

Kadam, R., Rao, S., Kareem Abdul, W. and Jabeen, S.S. (2019), "Impact of cultural intelligence on SME performance: The mediating effect of entrepreneurial orientation", Journal of Organizational Effectiveness: People and Performance, Vol. 6 No. 3, pp. 161-185. https://doi.org/10.1108/JOEPP-12-2018-0101

Publisher

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Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited