Mediating effect of competitive strategy in the relationship between strategic human resource management and performance of small and medium enterprises in Brunei Darussalam

This paper investigates the mediating effect of competitive strategy in the relationship between strategic human resource management (SHRM) and small and medium enterprises (SMEs) performance. The data collection was conducted using questionnaire surveys on 254 SME owners/managers operating under the service industry in Brunei Darussalam. Following this, the collected data was analysed with the structural equation modelling to establish the reliability and validity of the measurement model. Subsequently, the structural model assessment was done to test the hypotheses by examining the path coefficient of the direct and indirect relationships. The findings revealed a significant positive relationship between SHRM and SME performance. Additionally, competitive strategy has a significant positive mediating effect on SHRM and SME performance. The findings suggest the positive relationship between SHRM and SME performance can be explained by the formation of competitive strategy. Furthermore, these findings extend the knowledge of SHRM by combining with competitive strategy in SMEs performance contexts through SEM analysis.