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Effect of Strategic Innovation on Competitive Advantage With Mediating Effect of Human Capital in Ethiopia SMEs

Effect of Strategic Innovation on Competitive Advantage With Mediating Effect of Human Capital in Ethiopia SMEs
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Author(s): Brehanu Borji (Hawasa University, Ethiopia), Chalchisa Amentie (Ethiopian Civil Service University, Ethiopia), Tafese Niguse (Bule Hora University, Ethiopia)and Shashi Kant (Bule Hora University, Ethiopia)
Copyright: 2025
Pages: 28
Source title: Innovative Approaches to Managing Conflict and Change in Diverse Work Environments
Source Author(s)/Editor(s): Suzzette A. Harriott (Suzzette Harriott Research Institute, USA & Nova Southeastern University, USA)
DOI: 10.4018/979-8-3693-9556-1.ch013

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Abstract

competitive advantage, highlighting the crucial importance of worker capabilities in improving organizational performance. It emphasizes how strategic innovation allows businesses to differentiate themselves in the market and enhance operational efficiency, resulting in increased consumer engagement and flexibility. According to the findings, human capital plays an important role in this connection, as SMEs that engage in employee development and nurture an innovative culture are better positioned to effectively execute new strategies. SMEs may gain long-term edge over rivals in an increasingly changing business environment by developing talented and motivated employees. This study emphasizes the need of understanding human capital as a strategic asset required to navigate the challenges of modern marketplaces. Besides, partial mediation was found among strategic innovation and edge over rivals by human capital.

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