The Effect of Organizational Culture on Interorganizational Relationship and Firm Performance

Interorganisational relationships have often been associated as antecedents of financial and market performance. However, little is known about its effects on operational performance that is relevant to firm competitiveness and sustainability. On the other hand, studies relating to firms' culture within interorganisational relationships are scarce. In this sense, this study is unique in that it explores the influence of cultural dimensions on operational performance within interorganisational relationships. Using a survey questionnaire, 154 responses were collected from suppliers of a large service organisation. A regression analysis was accomplished, demonstrating a significant moderating effect of cultural dimensions (governance formalism and strategic focus) on relationship commitment, investment, and operational performance. This research helps managers to reveal the cultural characteristics of suppliers that improve operational performance, suggesting the significance of additional studies focusing on culture, performance, and interorganisation relationships. Besides, it demonstrates the importance and impact of cultural dimensions on interorganisational relationships and firms' operational performance.