A study on innovative culture, strategic planning and SMEs performance in Punjab, Pakistan

The main objective of this study was to examine the relationship between innovative culture (IC), strategic planning (SP), and small and medium enterprises’ (SMEs) performance in Punjab, Pakistan. Data were collected from selected SMEs operating in Punjab, Pakistan using a cross-sectional study design. This study adopted the simple random sampling of 353 respondents. Questionnaires were distributed to the respondents and the data were collected through the personally-administered method. The Partial Least Squares Structural Equational Modeling (PLS-SEM) was used to test the hypotheses. This study found that innovative cultural values, processes, and success factors have positive influences on SMEs’ performance directly but innovative cultural behavior, climate, and resources do not effect SMEs’ performance. The study also revealed that SP has a direct positive relationship on SMEs’ performance. The study further revealed that SP as a mediating variable has a significant effect on the relationship between SMEs’ performance and innovative cultural processes and success. However, SP as a mediating variable has no significant effect on the relationship between SMEs’ performance and innovative cultural values, behavior, climate and resources. The results of the study further highlighted important insights to owner-managers, policy-makers and researchers to further understand the effects of IC and SP on SMEs’ performance. Owner-managers of SMEs should emphasize IC’s values, processes and resources, and SP to enhance SMEs’ performance. Strategy planners and policy-makers should encourage and implement such policies which include IC and SP for enhancing SMEs’ performance. Lastly, the limitations of the study and avenues for the future research are discussed.