The mediating role of organizational culture in the relationship between strategic management, HRM practices and organizational performance of SMEs operating in Algeria

This study investigates the mediating effect of organizational culture (OC) on the relationship between strategic management (SM), human resource (HR) management, and organizational performance (OP) in small and medium-sized enterprises (SMEs) in Algeria. SMEs play a vital role in Algeria's economic development, serving as a major source of employment and contributing significantly to GDP. Although existing literature explores the impact of SM and HR management on firm performance, to date, no research has specifically examined the mediating role of organisational culture in this relationship, either in Western or non-Western contexts, including the North African region, particularly within the Algerian setting. This research adopts a quantitative approach and uses data collected from 622 SME managers in Algeria, predominantly male (75.9%), aged 30–49 years (72%), and 33.1% holding advanced degrees. Most respondents represented small enterprises (49.2% with 6–49 employees) across various industries. Structural Equation Modeling (SEM) was employed using SmartPLS 4, SPSS 29, and JASP 0.19.3.0 to validate the relationships among SM, HR practices, OC, and OP. Using a structured survey, data was collected from 622 managers to assess HR infrastructure, strategic management capabilities, cultural dimensions, and performance outcomes. Structural equation modeling (SEM) on SmartPLS4, descriptive statistics and inferential statistics on SPSS 29 have been used for data analysis and hypothesis testing. Regression and mediation analyses indicate that collaborative (Clan) and adaptive (Adhocracy) cultures enhance performance by fostering employee engagement and innovation. Strategic management was found to have a stronger direct impact on performance than HR infrastructure, but its effectiveness is amplified when aligned with a supportive organizational culture. The findings also reveal that organizational culture plays a critical mediating role between strategic management and firm performance, emphasizing the need for cultural alignment and strategic clarity in Algerian SMEs. These insights contribute to the theoretical understanding of organizational behavior in emerging economies and offer practical guidance for SME managers seeking to enhance performance through integrated management strategies. Limitations include the study's cross-sectional design and regional scope, which future research could address through broader, longitudinal investigations.