Abstract
This research aims to evaluate the link between human resource practices (HRPs) and innovation with mediating effect of entrepreneurial creativity. This research uses the hierarchical analysis to examine data collected from entrepreneurs running 172 small and medium enterprises. The results show that (a) HRPs have a positive and significant effect on entrepreneurial creativity; (b) HRPs have statistically significant impact on innovation. These results provide empirical evidence that entrepreneurial creativity mediates the relationship between HRPs and innovation. Also, the findings provide evidence that the mediating role of entrepreneurial creativity causes improving employees' innovation. Also, the findings provide evidence that the mediating role of entrepreneurial creativity cause improving employees' innovation. By providing a cross-sectional examination of our model, we showed that HRPs and entrepreneurial creativity are of essence in shaping an innovative context. A comprehensive view on the triggers and outcomes of entrepreneurial creativity and innovation are needed, as the traditional unidirectional cause-effect rationale short in explaining how these concepts relate to one another and to entrepreneur experiences of HRPs.
Highlights
The human resource management literature recognizes that innovation assists small and medium enterprises (SMEs) in creating value and sustainable competitive advantage in rapidly changing business environments (Terziovski, 2010; Gronum, Verreynne, and Kastelle, 2012)
This study suggests that the effect of human resource practices (HRPs) on innovation is determined through entrepreneurial creativity
The research outcome highlights the importance of the mediating role of entrepreneurial creativity in the relationship between HRPs and innovation
Summary
The human resource management literature recognizes that innovation assists small and medium enterprises (SMEs) in creating value and sustainable competitive advantage in rapidly changing business environments (Terziovski, 2010; Gronum, Verreynne, and Kastelle, 2012). The SME entrepreneur needs to react to environmental change and develop new skills to enable their firm to achieve the best performance possible (Edwards, Delbridge, & Munday, 2005). Innovation arises from valuable knowledge, skills, and ability, & is crucial in the creation of value (Colombo, Piva, and Rossi-Lamastra, 2014). Man, Lau, and Chan (2002, p.124) recognize that entrepreneurial creativity is an intangible asset that depends on the “personality traits, skills knowledge, and abilities of the entrepreneur.”. Creativity can add value via new ideas through exploiting individual skills (Anderson et al, 2014)
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