Corporate Cultural Dimensions, Social Responsibility and Financial Performance

Document Type : Original Article

Authors

1 MA in Accounting, Tarbiat Modares University, Tehran, Iran.

2 Associate Professor, Department of Accounting, Tarbiat Modares University, Tehran, Iran.

Abstract

Despite the impact of companies on society and stakeholders’ expectations, organizations need to respond differently. According to Cameron and Quinn (1998), culture is defined as the core of set values, underlying assumptions, and defined interpretations and approaches in the organization. The context of competitive values is very instrumental in helping to organize and interpret a wide range of organizational phenomena. Four types of dominant hierarchical, market, clan, and adhocracy cultures emerge from these frameworks. This study aimed to analyze the relationship between corporate culture and financial performance as well as social and financial dimensions of social responsibility among listed companies in Tehran Stock Exchange. To this end, questionnaires were distributed to corporate executives, and the data on the corporate culture dimensions (Cameron & Quinn, 2006) as well as social responsibility were collected and the data related to financial performance were extracted from financial statements. Then, the effect of cultural dimensions on financial performance and social responsibility was investigated using collected data and modelling structural equations based on partial least squares. The results of statistical analysis of data collected from 73 companies suggested that the adhocracy and market dimensions of corporate culture have the most effect on social responsibility and financial performance of companies. Moreover, hierarchical culture had a positive and significant effect on the social responsibility of companies.

Keywords

References

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