The mediating role of human resources and internal processes on the relationship between innovation strategy and financial performance

Today, organizations need to implement an innovation strategy supported by competent human resources and appropriate internal processes in order to succeed and achieve sustainable financial performance in the face of global competition; Therefore, the present study investigates the role of innovation strategy in active manufacturing companies in Yazd province in financial performance through human resource mediator variables and internal processes.

The present research method is applied in terms of purpose and in terms of nature and method of collecting descriptive-survey information. The statistical population of this study consists of financial managers and senior accounting supervisors of production units in Yazd province; the available sampling method was used to select the sample, and a total of 100 acceptable questionnaires were collected and analyzed. Cronbach's alpha coefficient confirmed the content validity of the questionnaires according to experts' opinions, and the structure's validity was confirmed using confirmatory factor analysis and reliability. Data analysis was performed using the structural equation technique, SPSS 21, and smart PLS 3 software.

The research findings show that the innovation strategy significantly affects human resources and internal processes, but its effect on financial performance is insignificant. On the other hand, the effect of internal processes on financial performance was substantial, but human resources did not significantly affect financial performance. The results also show that the innovation strategy does not affect financial performance through human resources, but through internal processes has been able to affect financial performance.

Originality/Value:

 Today, the major changes created in the business environment along with the competition have highlighted the role of managers in the management of industries in order to improve the performance of the organization. Theoretically, contingency theory supports the relationship between innovation and performance by explaining the role of organization design. Obviously, the role of human resource capability and internal process can also be effective in this regard; Therefore, according to the research gap in the previous studies, the present study investigated the relationship between innovation strategy and financial performance with the mediating role of human resources and internal process at the level of industrial units in Yazd province as one of the country's industrial hubs.