The effect of an innovation-driven corporate culture on firm success: a new survey of Saudi digital firms

This paper exclusively examines the relationship between corporate culture—specifically innovation variables—and the success of digital firms in Saudi Arabia. Importantly, it provides significant empirical evidence highlighting the role of different innovation components—such as shared decision-making, reward strategies, learning programs, tolerance for mistakes, recruitment of innovative employees, and teamwork—in contributing to the success of digital firms. Data were gathered from 157 e-mail survey questionnaires sent randomly to managers working in various digital firms in Saudi Arabia. The data were analyzed using logistic regression methods and micro-econometric techniques. The findings from the ordinal logistic regression model with a maximum likelihood estimation (MLE) method pointed to the significant impact of innovation-based corporate culture variables on the success of digital firms in Saudi Arabia. More importantly, the econometric results indicate that digital firms that adopt an innovation culture, namely trust, talent retention, reward strategies, and learning programs, had the highest level of success. The results also revealed that the success of digital firms in Saudi Arabia depends on their willingness to innovate. This paper has implications for digital firm managers or policymakers who want to formulate policies and target appropriate corporate capacities to effectively adopt innovation culture values. It recommends cultivating a healthy corporate culture and targeting appropriate corporate capacities to effectively implement innovative cultural strategies. These actions can decrease reliance on government support and create job opportunities for young Saudis.