The mediating effects of HRM practices on the relationship between SCM and SMEs firm performance in Thailand

Purpose: This paper aims to investigate the relationships among supply chain management (SCM) implementation, human resource management (HRM) practices and small- and medium-sized enterprises (SMEs) firm performance in Thailand. It further examines whether HRM practices have a mediating effect on such relationship. Design/methodology/approach: A survey instrument was developed based on the literature review which then was verified by SCM expert opinions. Cross-sectional surveys of sample employees of SMEs in Thailand were undertaken by both direct and mail surveys. Of about 779 questionnaires distributed, 203 usable questionnaires were returned. Structural equation modeling (SEM) was performed to analyze the obtained data. Findings: The statistical results reveal that SCM indirectly improves firm performance of small- and medium-sized firms through HRM practices. The latter, HRM practices, is found to fully mediate the impact of SCM implementation on SME firm performance. These results suggest that SCM cannot enhance SME firm performance if its implementation is undertaken without effective HRM practices. Originality/value: This study identified the research gap in SCM areas by recognizing the scarcity of research on SCM in SMEs and by identifying and integrating HRM practices as a significant behavioral support system to SCM implementation in SMEs. Its results reveal that HRM practices fully mediates the impact of SCM on SMEs’ firm performance.