Author(s): Mohammed Kafaji
With increasing global competitiveness and sustainability challenges, Small to Mediums Enterprises (SMEs) are under on-going pressure to innovate and develop effective strategies to engage their employees for enhanced productivity and growth. Further, the local decision makers in a country-wide environment consider SMEs as critical success factors for future economic growth and job creation. This study presents analysis of the SEMs reaction to these external and internal factors, in particular, how to promote new business ideas through enhancement of employees’ engagement by increased delegation of authorities to subordinates and by encouraging employees to share information within the firm. Delegation for decision making helps to increases employees’ commitment and the internal competitiveness between rivals to drive business growth. While internal collaboration enhances communications between employees to share ideas which in turns provide tangible additives to the business processes that further enhances growth. The study starts by developing a conceptual model that associate the internal delegation and collaboration with new business ideas and with business growth. The relevant hypotheses are developed, and the models are analysed and tested using standardized mediation procedures via SPSS statistical package. The mediation effect of delegation and collaboration on the relationship between SMEs’ strategies to embrace new business ideas and the business growth are studied. The results showed that delegation has more positive impact on the business growth compared with only ideas sharing and internal collaboration. However, although to different extents, both the delegation of authorities and the encouragement of employees to collaborate by sharing new ideas participate in enhancing business growth. These findings are discussed considering required support for policy makers to develop awareness channels for SMEs to incorporate delegation and internal collaboration as integral components of their strategic planning.