Economic Review, Vol. 77 No. 4, 2026.
Original scientific paper
https://doi.org/10.32910/ep.77.4.1
The Role of Human Capital and Organizational Culture in Promoting Innovation in SMEs
Faruk Hadžić
Admir Čavalić
Ema Burić
Abstract
This paper examines the role of human capital and organizational culture in promoting innovation in small and medium-sized companies in Bosnia and Herzegovina, with a specific focus on mentoring and informal education, career development, external communication with clients, and the formalization of internal processes. The aim is to determine which internal organizational factors most effectively stimulate innovative behavior in the context of a transition economy. The study applies a quantitative research design based on a structured questionnaire distributed to managers in 304 SMEs across different sectors. Data were analyzed using Pearson correlation, multiple and logistic regression, and comparative group tests, supported by visual data representations. The results reveal that mentoring, informal education, external client communication, and formalized procedures have a significant positive impact on innovation, whereas career paths and coaching do not exhibit statistical significance. These findings highlight the importance of interpersonal knowledge transfer, customer-driven innovation, and structured processes in building an innovative organizational culture. Theoretical implications include the integration of human capital and organizational culture perspectives into SME innovation literature, while practical implications suggest that managers should invest in internal mentoring systems, informal learning opportunities, and simplified but clear internal procedures. The study is limited to SMEs operating in Bosnia and Herzegovina, with sectoral distribution potentially affecting generalizability. Data are based on self-reported perceptions, which may introduce bias. Future studies should expand to comparative regional analyses and include longitudinal data. This research contributes to the relatively scarce empirical evidence on innovation drivers in SMEs in transition economies, by integrating human capital and organizational culture perspectives. It offers actionable recommendations for managers and policymakers to enhance innovation capacity without relying solely on costly R&D investments.
Keywords
human capital; organizational culture; innovations; SME; mentoring.
Hrčak ID:
347622
URI
Publication date:
7.6.2026.
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