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Digital Synergy and Strategic Vision: Unlocking Sustainability-Oriented Innovation in Saudi SMEs

Author

Listed:
  • Karam Zaki

    (Department of Business Administration, College of Science and Humanities, Shaqra University, Dawadmi 17452, Saudi Arabia
    Department of Hotel Studies, Faculty of Tourism and Hotels, Fayoum University, Fayoum 63514, Egypt)

  • Abrar Alhomaid

    (Department of Business Administration, College of Business and Economics, Qassim University, Buraidah 51452, Saudi Arabia)

  • Ashraf Ghareb

    (Department of Hotel Studies, Faculty of Tourism and Hotels, Fayoum University, Fayoum 63514, Egypt)

  • Hany Shared

    (Department of Business Administration, College of Science and Humanities, Shaqra University, Dawadmi 17452, Saudi Arabia)

  • Alaa Raslan

    (Department of Hotel Studies, Faculty of Tourism and Hotels, Fayoum University, Fayoum 63514, Egypt)

  • Gamal S. A. Khalifa

    (Department of Hotel Studies, Faculty of Tourism and Hotels, Fayoum University, Fayoum 63514, Egypt
    Faculty of Business, Higher Colleges of Technology, AAF, Abu Dhabi 25026, United Arab Emirates)

  • Ahmed K. Elnagar

    (Administrative and Financial Sciences Department, Applied College, Taibah University, Medinah 41461, Saudi Arabia
    Hotel Management Department, Faculty of Tourism & Hotel Management, Suez Canal University, Ismailia 41522, Egypt)

Abstract

This research examines the proposition that enhancing sustainable innovation can be particularly effective when the focus is on strategy, machine learning, and digitalization. The study specifically targets the complex interactions among strategic alignment (SA), sustainability-oriented innovation (SOI), and digital transformation (DT) within small and medium-sized enterprises (SMEs) in Saudi Arabia, particularly within the service sector. A moderated mediation framework was constructed to analyze the influence of SA on SOI, the mediating role of DT, and the moderating effect of strategic orientation (SO). Data were collected through structured surveys from 339 SMEs using a quantitative research design and a cross-sectional methodology. The partial least squares structural equation modeling (PLS-SEM) technique was employed to validate the proposed framework and hypotheses. The results indicate that SA significantly boosts SOI, with DT acting as a strong mediator in this connection. Furthermore, SO moderates the relationships between SA and SOI, SA and DT, and DT and SOI, highlighting its essential role in shaping the dynamics of sustainable innovation. These findings emphasize the necessity of aligning strategic initiatives with digital advancements to foster innovation that achieves a balance among economic, social, and environmental objectives. This study contributes to existing literature by filling the research gap regarding SOI and DT in Saudi SMEs and offers practical insights for SMEs facing sustainability challenges. Future research should delve deeper into digital technology configurations, industry-specific contexts, and cross-national applications to improve the applicability of these findings.

Suggested Citation

  • Karam Zaki & Abrar Alhomaid & Ashraf Ghareb & Hany Shared & Alaa Raslan & Gamal S. A. Khalifa & Ahmed K. Elnagar, 2025. "Digital Synergy and Strategic Vision: Unlocking Sustainability-Oriented Innovation in Saudi SMEs," Administrative Sciences, MDPI, vol. 15(2), pages 1-23, February.
    • Handle: RePEc:gam:jadmsc:v:15:y:2025:i:2:p:59-:d:1589302
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    References listed on IDEAS

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