Effect of Strategic Alignment and Strategic Foresight on Competitive Advantage with Mediating Role of Human Capital a case of SMEs of Sidama Regional State, Ethiopia

Abstract

This study examined effect of strategic alignment and strategic foresight on competitive advantage with mediating role of human capital in SMEs of Sidama regional state in Ethiopia. Structured questionnaire was used to gather data from a sample of 282 respondents using a quantitative research approach. Using SPSS and AMOS software, the researchers used methods such exploratory factor analysis (EFA), Kaiser-Meyer-Olkin (KMO) measure, and structural equation modelling (SEM) to analyze data. The results show that competitive advantage and strategic alignment, as well as strategic foresight and competitive advantage, are significantly correlated. Human capital was also found to be an important mediator, improving the efficiency of both strategy alignment and foresight in reaching competitive results. In addition to this, human capital was found partial mediator between both strategic alignment and strategic foresight and competitive advantage. The findings emphasize how crucial it is to incorporate human capital development into strategic management procedures and how SMEs must cultivate an aligned and forward-thinking culture. For managers and policymakers looking to improve SMEs' strategic competencies in a changing business environment, this research adds to our understanding of how these constructs interact to affect competitive advantage.