Investigating the Mediating role of GSCM Practices between Hofstede's National Culture and Firm Performance

Abstract

This study aims to investigate the influence of Hofstede’s cultural dimensions, i.e., power distance, uncertainty avoidance, collectivism, long-term orientation, and GSCM practices on the financial performance of manufacturing firms in Saudi Arabia, using Hofstede’s cultural theory and a resourcebased view. Since Manufacturing firms in Saudi Arabia are still using traditional techniques of performing business operations. Data was collected from 175 managers from different manufacturing firms. Thus, we collected data via a questionnaire using a cross-sectional research approach. Structural equation modeling and the partial least squares model were used to obtain the hypothetical results. The findings indicated power distance, uncertainty avoidance, long-term orientation, and GSCM practices significantly influence the financial performance of manufacturing firms, thus, collectivism influence negatively. Thereby, GSCM practices mediate the relationship between power distance, uncertainty avoidance, collectivism, long-term orientation, and financial performance of firms; at the same time, it does not mediate collectivism and financial performance of firms. However, the present article identifies a new perspective to assess the financial performance of manufacturing firms with Hofstede’s national cultural dimensions and GSCM practices; further, it provides insight in recognizing the factors to sustain the competitive advantages.