The Mediating Role of Innovation in Strategic Management Practices and SME Performance: Insights from Emerging Markets in Zambia

Abstract

This study examines the mediating role of innovation in the relationship between strategic management practices (SMPs) and the performance of small and medium enterprises (SMEs) in emerging markets, with a specific focus on Kabwe District, Zambia. Drawing from the Resource-Based Theory (RBT) and Dynamic Capabilities Theory (DCT), the study explores how innovation mediates the relationships between environmental scanning, strategy formulation, strategy implementation, and strategy evaluation and control, and the performance of SMEs. Using a sample of 202 SME owners and managers, data were collected through a Likert-scale questionnaire and analyzed using IBM SPSS and Hayes process version 4.2. The results revealed no significant mediation effects of innovation between strategic management practices and performance, suggesting that SMPs independently affect SME performance. The study recommends fostering a culture of experimentation, creativity, and continuous improvement within SMEs, and promoting the adoption of digital technologies to enhance strategic outcomes.