Date of Conferral
Vincent J. Fortunato
Despite 40 years of research, little is known about what moderates the relationship between organizational culture and company financial performance. This quantitative study examined if innovation moderates the relationship between an organization's culture, as measured by the Denison Organizational Culture Survey, and a company's financial performance, as indicated by return on assets (ROA). Understanding if innovation moderates the relationship between organizational culture and ROA could help business leaders foster a culture that maximizes financial performance. Lewin's field theory was the theoretical foundation explaining organizational culture. Denison Consulting provided the archival dataset, which included organizational culture scores and ROA data for 104 publically traded companies. Companies were classified into 5 innovation quintiles. Pearson's correlation, ANOVA, and multiple regression analyses were used to test the hypotheses. The results indicated that ROA did not correlate with Denison's organizational culture dimensions of adaptability, mission, consistency, and involvement; the second highest and second lowest innovation quintiles had greater ROA at high levels of mission and consistency as compared to low levels of mission and consistency; and innovation moderated the relationship between organizational culture and ROA. Enabling companies to maximize their financial performance by adjusting their organizational culture in relationship to their innovation strategies could enable the creation of cutting-edge products and services, thereby generating positive social change.