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

Ndila L. Yanda, Austin Mwange, John Moose and Clement Mwaanga
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Ndila L. Yanda: Institute of Distance Education, The University of Zambia, Lusaka, Zambia
Austin Mwange: Graduate School of Business, The University of Zambia, Lusaka, Zambia
John Moose: Institute of Distance Education, The University of Zambia, Lusaka, Zambia
Clement Mwaanga: School of Business, Mulungushi University, Kabwe, Zambia

East African Finance Journal, 2025, vol. 4, issue 1

Abstract: This study examines the mediating role of innovation in the relationship between strategic management practices and the performance of small and medium enterprises in emerging markets, with a specific focus on Kabwe District, Zambia. Grounded in the Resource-Based Theory and Dynamic Capabilities Theory, the study analyzes how innovation mediates the relationships between environmental scanning, strategy formulation, strategy implementation, and strategy evaluation and control, and SME performance. Data were collected from 202 SME owners and managers using Likert-scale questionnaires and analyzed with IBM SPSS and Hayes Process version 4.2. The findings reveal no significant mediation effects of innovation between strategic management practices and performance, indicating that strategic management practices independently influence SME performance. The study recommends fostering a culture of experimentation, creativity, and continuous improvement, as well as promoting the adoption of digital technologies to strengthen strategic outcomes within SMEs.

Keywords: SMEs; innovation; strategic management practices; mediation; performance; environmental scanning; strategy implementation (search for similar items in EconPapers)
JEL-codes: L25 M10 O12 O32 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:cwk:eafjke:2025-07

DOI: 10.59413/eafj/v4.i1.7

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