The Impact of Safety Culture, Risk Mitigation, and Sustainability on Business Performance: The Mediating Role of Employee Engagement in Palestinian Small and Medium-Sized Enterprises

Small and medium-sized enterprises (SMEs) in Palestine face significant challenges in risk management, in which safety culture, risk mitigation, and sustainability practices play a critical role in business performance. However, the ways these variables influence business performance through employee engagement are less explored. This study investigates the impact of safety culture, risk mitigation, and sustainability practices on the business performance of Palestinian SMEs, with a special emphasis on employee engagement’s mediating effect. The quantitative approach was adopted, and data were collected from 450 SME respondents within the main clusters of the West Bank (Ramallah, Hebron, Nablus, and Jericho) based on purposive sampling. The findings indicate that safety culture, risk mitigation, and sustainability practices positively and significantly impact business performance. Furthermore, employee engagement is a potent mediator that enhances these variables’ positive effects on business performance. These results have practical and theoretical implications for building a robust safety culture, possessing effective risk minimization measures, and incorporating sustainability practices to advance business performance in Palestinian SMEs. The study recommends that SME owners and managers prioritize employee engagement in addressing safety and sustainability matters to achieve long-term business growth.