The Influence Of "Indulgence Versus Restraint" On Companies' Performance In Jordan Context

Abstract

Jordan is a developing Arab country located in the Middle East. Jordan has become involved in globalization and increased its interest in change and moving from an ancient country to a modern one. Globalization plays an important role in influencing individual and organizational cultures. Where the literature confirmed that culture influence on the company environment and corporate social responsibility, besides affecting the behavior of individuals and the performance of businesses. Indeed, culture has various dimensions, Hofstede’s cultural theory is considered one of the famous frameworks of culture, namely, Individualism versus collectivism Power Distance Index; Uncertainty Avoidance index; Masculinity versus Femininity; Long-versus Short- Term Orientation; Indulgence versus Restraint. This paper aimed to investigate the influence of the Cultural dimension “Indulgence versus Restraint” on Corporate Performance ROE, ROA in Jordan context.  For this purpose, the study constructed the Theoretical Framework based on Hofstede’s Cultural Theory. The authors selected the cultural dimension Indulgence versus Restraint since has been considered a new dimension. A questionnaire was distributed to the financial sector companies listed on ASE to measure the cultural dimensions. For corporate performance, data were collected from the websites of the Securities Depository Center SDC. The study used Linear Regression model to analyze data and test the developed hypotheses. The study found there is a positive influence of Restraint on corporate performance ROE in Jordan firms. Actually, there are no local studies conducted in Jordan regarding this dimension. Therefore, this paper recommended conducting future research in this regard.