Unveiling the role of innovation practices in organizational learning as a mediator for sustainable performance enhancement in Somali banks

Abstract

Abstract Innovation in the banking industry is a crucial catalyst for sustainability and growth, allowing banks to adjust to swiftly evolving markets, satisfy varied customer needs, and improve their operating efficiency. In this regard, this study aims to investigate the mediating role of organizational learning in the connection between innovation practices and sustainable performance in Somali banks, exploring how organizational learning acts as a catalyst that enhances the impact of these innovations on performance, The data was collected from individual employees within the banking sector, comprising 200 respondents occupying diverse roles across 10 leading commercial banks in Mogadishu Somalia. The data were analyzed with the quantitative approach of structural equation modeling using Smart PLS 4.1.0. The results indicate that Institutional innovation, process innovation, and service innovation significantly improve organizational learning. Additionally, organizational learning enhances organizational performance. However, the impact of market innovation and product innovation on organizational learning was not supported. This study underscores the importance of innovation practices in driving organizational learning, serving as a catalyst for sustainable performance enhancement in Somali banks. The findings suggest that, when effectively integrated, innovation and organizational learning empower Somali banks to achieve sustainable growth and heightened responsiveness in a dynamic industry landscape.

Keywords

• Innovation practices
• Organizational performance
• Organizational learning
• Somalia