Strategic leadership in SMEs: the mediating role of dynamic capabilities

Small and medium-sized enterprises (SMEs) play a vital role throughout the global economy, spurring innovation and job creation. This study investigates the effect of strategic leadership practices on SME performance.

The authors conducted a quantitative survey of leaders from 290 SMEs to examine their strategic leadership and how it affects SME performance. Structural equation modeling (SEM) is used to test the dependent relationships in this paper.

The results suggest that the strategic leadership effect on firm performance is fully mediated by employee empowerment dynamic capability (EEDC) as well as resilient dynamic capability (RDC).

Strategic leadership is traditionally analyzed in large organizations. The authors evaluate the role of strategic leadership in SMEs which is an underexplored context for leadership studies. In this process, the authors also analyze the mediating role of EEDC and RDC.