Impact Of Cultural Diversity On Innovation Performance Of Firms In Construction Industry Of Azerbaijan

Studies on innovation are attracting many researchers all over the world due to its crucial role in today's competitive world.In the same time cultural dimensions and factors,their impact to performance measures is also becoming very popular topic for researches.In our paper,we attempted to analyze cultural factors,cultural diversity and its impact on innovation performance.The objective of this research is to study the relationship between cultural diversity and its impact on innovation performance,in the same time there is a goal to check the relationship between different categories of cultural factors and innovation performance and finally one of goals of this research is to check the moderate effect of these factors.In order to systemize our study's objective we have proposed the following research questions:1)What is the relationship between cultural diversity and innovation performance?2)How does racial diversity impact on innovation performance?3)How does gender diversity impact on innovation performance?4)What is the effect of foreigners in the firm and does this fact impact on innovativeness?5)How does origination related cultural factors such as education,age,training background,language impact on innovation performance of firms?6)How does behavioral cultural factors such as trust,power distance,individualism,uncertainty avoidance,advice taking behavior impact on innovation performance of firms?In order to answer to these questions we first,we have analyzed the firms in construction industry of Azerbaijan,which has been chosen as a sample for our study.For this,we used survey data-collection method with support of trade unions in regions.Through this method,we have collected data on cultural factors,diversity factors of employees in sample firms.Then we have collected from the same survey data on innovation performance and checked it with official government sources data on innovation performance of Azerbaijan firms from construction industry.We have chosen construction industry as this industry has shown relatively high growth after the independence of Azerbaijan and is fit to research scope,which we planned to hold.All cultural factors were divided into four main groups,as we had many factors to check.Then,we used quantitative techniques such as correlation-regression analyses in order to find support for hypotheses regarding to variables relationships.For regression methods,we have mainly used Negative binomial regression and Ordinary Least Squares methods in our analyses.We have proposed 17 hypotheses,analyzed 20 factors,run 23 models,which enabled us to make valuable conclusions and predict the relationship power.From these 23 models,8 models were accepted.Recommendations and conclusions are made based on these models,practical implications of which are expected to be useful for subjects who are busy in Azerbaijan's construction industry in their decision-making processes.We found that the cultural diversity has inverted U-curve relationship with innovation performance also along with that we found that one of components of cultural diversity,such as gender diversity and foreigners' diversity gives highest outcomes in terms of innovation performance when the diversity levels are moderate.Another finding we got is that risk-taking nature of employees'should also have moderate levels,as too low and too high risky attitude may decrease innovation performance of the firm.We found that the following factors such as prior experience of CEOs,openness to change,trust as a strong cultural and social component,headquarters' location,number of additional trainings per year,factor of the advice taking from the outside of the firm and Confucian dynamism or in other words,long-term orientation have a positive impact on innovation performance.In contrary CEO age does not have a positive effect,but rather has curvilinear relationship and has best effect when it CEOs are not very old and not very young.Finally,we found that uncertainty avoidance has a negative relationship with innovation performance of the firm.Beside of main findings we have checked for the moderate effect of factors under study regarding to innovation performance.We found that advice taking from other firms,additional trainings per year for employees do moderate the innovation performance,and that this moderation works towards the increase of innovation.We also found that headquarter location along with Confucian Dynamism of the firm does increase the innovation performance.Finally,we had results on another moderate effect,which says that increasing the number of trainings per year along with having long-term orientation(Confucian Dynamism)does make increase the innovation performance of the firm.