Organizational culture and managerial creativity: The mediating role of total quality management in emerging economies

Abstract

In today's competitive landscape, while it is crucial to promote and enhance managerial creativity for sustaining organizational resilience within an increasingly competitive environment, there are limited studies examining this relationship in fragile economies, especially in service sectors like the Yemeni insurance industry, where economic uncertainty is high and there is an urgent need for internally-based innovative activities. This study focuses on how Organizational Culture (OC) affects Managerial Creativity (MC) directly and indirectly via Total Quality Management (TQM), specifically in Yemen's insurance industry. The research framework is based on socio-technical systems theory, combining both Cultural (Social) and Quality Management (Technical) subsystems to understand creative managerial behavior in resource-constrained service environments. The study used a quantitative research design, collecting data from 292 managers in Yemen's insurance sector in Sana’a. Data analysis employed Partial Least Squares Structural Equation Modeling (PLS-SEM). Results show that organizational culture significantly predicts TQM implementation (β = 0.776, p < 0.001) and managerial creativity (β = 0.784, p < 0.001). TQM positively relates to managerial creativity (β = 0.344, p < 0.001) and partially mediates the OC-MC relationship (β = 0.267, p < 0.001). The model explains 66.2% of the variance in managerial creativity, demonstrating strong explanatory power. This study extends socio-technical systems theory by illustrating how social and technical subsystems interact to foster innovation.