Determinants of innovation culture evidence from Smes in Ho Chi Minh City

Abstract

Research purpose: This study investigates the determinants of innovation culture (IC) in small and medium-sized enterprises (SMEs) in Ho Chi Minh City, aiming to clarify which internal factors most strongly foster IC under resource constraints. Research motivation: While innovation culture has been widely studied in developed economies, empirical evidence from Vietnamese SMEs remains limited. Given their strategic role in national growth yet persistent shortage of resources, exploring IC in this context provides both theoretical and practical contributions. Research design, approach, and method: Drawing upon the Resource-Based View, Organizational Culture Theory, and Socio-Technical Systems Theory, the study proposes a model with six factors: resources, processes, organizational values, employee behavior, working environment, and organizational success. A survey of 218 SME employees was conducted, and data were analyzed using Cronbach’s alpha, exploratory factor analysis, correlation, and multiple linear regression. Main findings: Five factors processes, organizational values, employee behavior, work environment, and organizational success positively and significantly affect IC. In contrast, resources exhibit no significant impact. Organizational success emerged as the strongest determinant, highlighting the reinforcing cycle between performance outcomes and cultural development. Practical/managerial implications: Findings suggest that SMEs should emphasize flexible processes, supportive environments, and cultural values over resource acquisition. Managers can cultivate IC by embedding innovation into daily practices, promoting psychological safety, and aligning leadership behaviors with organizational success.