Strategic thinking, strategic planning, strategic innovation and the performance of SMEs: The mediating role of human capital

Abstract

Strategists have unique skills and abilities to connect the past and the present in order to predict what might happen in the future. The current study is the culmination of a number of research ideas in the field of Strategic Thinking (ST), Strategic Planning (SP) and Strategic Innovation (SI) in relation of Human Capital (HC). The survey method was used to collect data from 235 SMEs in the manufacturing industry of Yemen. Results indicate that ST, SP and SI have a significant effect on HC. The mediating effects of HC on the relationship between ST, SP and SI and SMEs’ performance were also examined. Results indicate that HC mediates the relationship between ST, SP and SI and firm performance. The findings of this study offer important insights for managers of SMEs, researchers and policymakers to further understand the effects of ST, SP SI, HC and SMEs’ performance. SMEs should also be encouraged to develop their ST, SP, SI and HC to improve their performance. Finally, this study serves not only to clarify the mechanism between HC and SMEs’ performance, but also to generalize the ST, SP and SI results in the Yemen and Middle East context.