Dynamic Capabilities and Mediating Effects of Innovation on the Competitive Advantage and Firm’s Performance: the Moderating Role of Organizational Learning Capability

Abstract

The objective of this paper is to investigate the impact of exploration and exploitation capabilities on competitive advantage (hereafter CA) and performance, considering the mediating role of innovation capabilities (hereafter ICs) and the moderating role of organizational learning capability (hereafter OLC) on the proposed relationships. This investigation proposes a theoretical model tested using structural equation modelling (SEM), and a multi-group analysis is performed to understand the moderating role of organizational learning capability. A 90-item questionnaire exploring the relationships between dynamic capabilities (hereafter DCs) and innovation was developed, and a total of 387 valid questionnaires were collected from a sample of Portuguese's smalland medium-sized enterprises (SMEs), a case of a transition economy. Therefore, this study contributes to the understanding of the direct and indirect impact of exploration and exploitation on CA variables, the mediating role of IC on CA and performance and the moderating effect of OLC in a transition economy.

Influence of Knowledge Management Practices on Entrepreneurial and Organizational Performance: A Mediated-Moderation Model

“…In some organizations, employees are afraid to share knowledge with entrepreneurs and other colleagues to hinder the progress of other co-workers (Falasca et al, 2017). Prior researchers believed that, once the discouraging knowledge sharing behavior establish in an organization environment, it will be unfavorable, difficult to change (Ha and Lo, 2018;Ferreira et al, 2020a).…”

“…However, there is less focus on SME's empirical research related to the moderating role of opportunity recognition and its drivers in smaller organizations. Ferreira et al (2020a) focused on the dynamic organizational capabilities in small organizations with opportunities for competitive advantages. Sanz-Velasco (2006) argued that market interaction and entrepreneurs' life experiences related to the market, industrial knowledge, and resources should be considered for opportunity recognition.…”

“…This scale was adapted from the study of Atuahene-Gima (2005). This scale was used by previous researchers (Ferreira et al, 2020a). A sample item for exploration "acquired manufacturing technologies and skills entirely new the firm."…”

“…However, there is less focus on SME’s empirical research related to the moderating role of opportunity recognition and its drivers in smaller organizations. Ferreira et al (2020a) focused on the dynamic organizational capabilities in small organizations with opportunities for competitive advantages.…”

“…Secondly, this study measures the performance of SME entrepreneurs using dynamic capability as a mediator because the significance of the SME sector is increasing gradually. Thirdly, most of the previous studies focused on the other sectors as well as examined the role of knowledge management practices on business performance ( Hung et al, 2010 ; Protogerou et al, 2012 ; Gholami et al, 2013 ) and taken innovation as a mediator variable in the relationship between organizational performance and other factors such as organizational learning, entrepreneurial orientation ( Hartono and Halim, 2014 ; Ferreira et al, 2020a ). Therefore, the relationship between knowledge management practices using dynamic capability as a mediator on entrepreneurial and organizational performance of SMEs is the motivation of this study.…”