Enhancing organizational performance of malaysian SMEs the role of HRM and organizational learning capability

Purpose – The purpose of this paper is to examine organizational learning (OL) capability as a mediator of the relationship between human resource management (HRM) and performance of Malaysian small and medium enterprises (SMEs). Design/methodology/approach – A cross-sectional design was adopted, where data were collected from a sample of 286 manufacturing and service SMEs, utilizing a survey questionnaire. Hypotheses were tested using structural equation modeling. Findings – Results from a two-stage structural equation modeling analysis suggest that the use of human-capital enhancing HR practices strengthen SMEs’ learning capability. Furthermore, SMEs’ learning capability mediates the effect of the HR practices on firm performance. Research limitations/implications – It uses a cross-sectional design which has prevented the examination of cause and effect relationship between two constructs. It also did not include large organizations in the sample population. It also did not consider other SME contextual...