STRATEGIC MANAGEMENT, ORGANIZATIONAL CULTURE AND PERFORMANCE: A SCALE VALIDATION STUDY IN SMES

This study aims to validate the structural relationships between Strategic Management (SM), Organisational Culture (OC), and Organisational Performance (OP) in Small and Medium Enterprises (SMEs), with a focus on OC’s mediating role. Using a quantitative approach, data from 622 SME managers in Algeria were analyzed through Structural Equation Modeling (SEM) with SmartPLS 4, SPSS 29, and JASP. Exploratory and Confirmatory Factor Analyses (EFA/CFA) assessed the measurement model by applying maximum likelihood extraction with varimax rotation. EFA confirmed a robust three-factor structure (loadings > 0.40), while CFA initially showed suboptimal fit (CFI = 0.79, TLI = 0.779). Post-modification, fit indices improved, validating OC’s mediation between SM and OP. Results highlight OC’s critical role in enhancing SME performance through SM practices, emphasizing cultural alignment and strategic clarity. The study has limitations, which include cross-sectional design and regional focus; this suggests the need for future longitudinal studies and broader geographic validation. The study contributes by empirically testing these constructs in SMEs by offering practical insights for managers to leverage culture-driven strategies in resource-constrained contexts.