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All Journal Journal of Business Management and Islamic Banking
Tettie Setiyarti
Departement Management, Sekolah Tinggi Ilmu Manajemen Indonesia Handayani
Economics, Econometrics & Finance Education

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Leadership Perspective: Strategic HRM And Knowledge Management Capacity To Improve Organizational Innovation In The Islamic  Banking Sector Satria Avianda; Pipit Sundari; Tettie Setiyarti; Anis Malik Thoha
Journal of Business Management and Islamic Banking Vol.5 No.1 (2026)
Publisher : UIN Sunan Kalijaga Yogyakarta

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.14421/jbmib.2026.0501-06

Abstract

Purpose—This study analyses the role of Strategic Human Resource Management (Strategic HRM) and Knowledge Management Capacity in enhancing Organizational Innovation and improving organizational performance in the Islamic banking industry. Increasing competition requires Islamic banks to strengthen strategic human resource management and knowledge capabilities to sustain performance and competitiveness. Design/methodology/approach—This study employs a quantitative approach using Structural Equation Modelling with Partial Least Squares (SEM-PLS). Data were collected through structured questionnaires from 360 employees of Islamic banks in Central Java and analysed using SmartPLS. Findings—The results indicate that Strategic HRM has a positive and significant effect on Knowledge Management Capacity (β = 0.668; p < 0.001) and Organizational Innovation (β = 0.339; p < 0.001). Knowledge Management Capacity also significantly influences Organizational Innovation (β = 0.571; p < 0.001). Furthermore, Organizational Innovation significantly affects organizational performance (β = 0.593; p < 0.001). These findings suggest that effective strategic HR practices enhance knowledge capabilities and stimulate innovation within organizations. Originality/value—This study contributes to the literature by integrating Strategic HRM, Knowledge Management Capacity, and Organizational Innovation within the context of Islamic banking, providing empirical evidence on how these factors interact to improve organizational performance. Research implication/limitation—The study focuses on Islamic banks in Central Java, which may limit generalization to other regions or sectors. Future research may include broader samples and additional organizational factors.
Co-Authors Anis Malik Thoha Pipit Sundari Satria Avianda