IMPACT OF STRATEGIC BUSINESS MANAGEMENT ON ORGANIZATIONAL PERFORMANCE: MEDIATING ROLE OF ORGANIZATIONAL CULTURE AND MODERATING EFFECT OF CROSS-CULTURAL MANAGEMENT

Abstract

Organizations are increasingly challenged to align strategic business management with cultural dynamics to achieve sustainable performance. Prior research has emphasized the independent importance of strategy, organizational culture, and cross-cultural management; however, integrated investigations that simultaneously examine their interrelationships remain limited. Addressing this gap, the present study draws upon Cultural Intelligence (CQ) theory to develop and test a model that explains how strategic business management influences organizational performance, with organizational culture as a potential mediator and cross-cultural management as a moderator. The primary aim of the study was to explore whether strategic business management directly improves organizational performance, whether organizational culture mediates this relationship, and whether cross-cultural management strengthens the effect of strategy on performance. A quantitative, cross-sectional research design was employed, targeting top- and middle-level managers working in medium- and large-scale manufacturing firms in Pakistan. Data were collected through a structured questionnaire and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) in SmartPLS. The findings reveal that strategic business management has a significant positive impact on organizational performance, highlighting the importance of deliberate and well-aligned strategic practices. Contrary to expectations, organizational culture did not mediate the relationship between strategy and performance, suggesting that in certain contexts, strategic initiatives may directly influence outcomes without relying on cultural assimilation. Cross-cultural management significantly moderated the strategy–performance relationship, demonstrating that effective handling of cultural diversity enhances the translation of strategic intent into improved performance.