Analyzing of the Employee Relations to Achieve Competitive Advantage in Small and Medium-Sized Enterprises in Saudi Arabia: Mediating Effect of Total Quality Management

الملخص

This study investigates the strategic role of employee relations (ER) in fostering competitive advantage (CA) within small and medium-sized enterprises (SMEs) in Saudi Arabia, with total quality management (TQM) serving as a mediating variable. Against the backdrop of Vision 2030 and the expanding SME sector, the research addresses a critical gap in understanding how internal human capital practices, particularly ER, contribute to sustainable competitiveness when embedded in structured quality frameworks. Drawing on the resource-based view (RBV), the study conceptualizes ER as a foundational intangible asset that, while valuable, requires operational alignment through mechanisms such as TQM to yield measurable competitive outcomes. A quantitative methodology was employed using a validated survey distributed to 381 SME owners and supervisors in the Makkah region. Structural equation modeling (SEM) via AMOS was used to test the hypothesized relationships. The findings revealed a significant positive relationship between ER and TQM and between TQM and CA. However, the direct relationship between ER and CA was not statistically significant. This indicates that the influence of ER on CA is realized only through the implementation of effective TQM practices. This study contributes to the limited empirical literature on SHRM–TQM integration in emerging markets and offers practical implications for SME leaders and policymakers aiming to enhance performance through internal capability building. It affirms that competitive advantage is not merely about resources but about how effectively those resources are harnessed within quality-driven frameworks.