Augmenting Performance Through Strategic Management and Leadership Capabilities

Abstract

Small and medium-sized enterprises (SMEs) suffer persistent challenges due to global market competition, time limits to respond strategically, talent retention, productivity, and uncompetitive operational expenses. Enhancing employee performance (EP) then becomes critical in defining SME success. The purpose of this study is to evaluate the influence of strategic management (SM) and leadership capabilities (LC) on EP and recommend solutions to improve EP. The function of employee engagement (EE) as a mediator between interactions involving LC, SM, and EP is also investigated. A quantitative research method was employed by collecting empirical data of employees working with Malaysian SMEs. Analysis including reliability and normality assessments, confirmatory factor analysis, and structural equation modelling with AMOS 22 were carried out. According to the data, SM exerts a positive and substantial impact on EP. In the context of Malaysian SMEs, the novel findings provide a strong reason for the use of SM, emphasising the need to strengthen managers' knowledge in SM capabilities.