The mediating role of organisational innovation in the relationship between strategic planning process and organisational performance in nonprofit organisations in the Kingdom of Saudi Arabia

Abstract

Due to the increasing uncertainties and rapid changes in business environment, strategic planning has been extensively adopted in most organisations. Nowadays, nonprofit organisations also adopt strategic planning to improve their competitive advantage and long-term performance. This research aimed to study the mediation effect of organisational innovation to improve organisational performance of non-profit organisations. It also focused on identifying dimensions that best represent strategic planning organisational innovation and organisational performance. Besides that, it investigated how organisational performance can be achieved through strategic planning and iimovation. A mixed method research using survey questionnaire and a semistructured interview guide were adopted in the study. 257 Chief Executive Officers (CEOs) of Saudi non-profit organisations participated in the survey and based on quota sampling, 30 CEOs participated in the semi-structured interview. The study validated the mediation impact of organisational innovation on mission, knowledge and growth perspective, internal processes perspective, customer satisfaction perspective and financial perspective obtained from regression analysis and supported by Sobel Test. The findings of this research showed that organisational innovation is a strong contributor to the improvement of internal processes whilst the contribution of organisational innovation is moderate towards the mission, knowledge and growth and customer perspectives. The best dimensions that represent strategic planning processes are strategic orientation, strategic analysis, organisational resources management, top management support, audit and control strategy, and strategy implementation. In addition, dimensions that best represent organisational iimovation are organisational learning, organisational innovation process, organisational innovation and organisational structure, innovation strategy, and organisational linkages. Finally, dimensions that best represent organisational performance are mission achievement, customer satisfaction, internal processes, employee learning and growth, and financial performance. The findings also revealed that Saudi nonprofit organisations are increasingly becoming aware that strategic planning process and organisational innovation have the ability to improve performance. Moreover, it has been revealed that strategy and innovation can improve performance through reduction of costs and time and enhance effectiveness. Therefore, it is recommended that Saudi nonprofit organisations should focus on applying strategic planning as a process to motivate employees to be innovative as well as achieve a higher and sustainable performance.