Developing Organizational Agility in SMEs: An Investigation of Innovation’s Roles and Strategic Flexibility

Abstract

Although social capital and collaborative knowledge creation were considered essential drivers in maintaining competitive advantage, empirical evidence on the impact of collaborative knowledge creation on organizational agility remained limited. Therefore, this study examined the relationship between social capital and collaborative knowledge creation in building innovation and agility and testing strategic flexibility as a moderating variable. It employed a quantitative design by distributing questionnaires to 414 managers and assistant managers of SMEs analyzed by SmartPLS-SEM. The results showed that social capital significantly affected collaborative knowledge creation, innovation, and organizational agility. Meanwhile, collaborative knowledge creation has no significant impact on organizational agility. Furthermore, strategic flexibility was not a moderating variable of the relationship between innovation and organizational agility. Based on these findings, this study produced recommendations for managers to strengthen organizational agility.

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“…Consequently, boosting innovation for competitive advantage at the global level is indispensable (Chang et al, 2017;Tsimoshynska et al, 2021). Second, Indonesia is a developing country with around 64 million SMEs that continue to grow to encourage national economic growth (Arsawan et al, 2022). The general problem of SMEs, mainly export SMEs, is the lack of implementation of employees' knowledge, creativity, and innovation to provide problem-solving in their routine activities.…”

“…Massive technological alterations shape today's economic environment and, along with globalization, give birth to innovation as a salient solution for improving performance and achieving sustainable competitive advantage (Haseeb et al, 2019;Hossain et al, 2021;Trachenko et al, 2021). Innovation capability is critical for an organization to succeed in a fast-changing business environment (Arsawan et al, 2022;Ode & Ayavoo, 2020) as it allows companies to be more adaptable and flexible to face changes (Denicolai et al, 2021;Leckel et al, 2020). In addition, innovation enables companies to accommodate consumer needs, stay ahead of their competitors, and consolidate their power by taking advantage of market opportunities (Gavrila Gavrila & de Lucas Ancillo, 2021).…”

“…Organizations may magnify their creativity and transform resources into dynamic competencies through knowledge networks, knowledge quality, and knowledge-sharing processes (Areed et al, 2021;Zhao et al, 2020). Prior research has shown that knowledge has a broad influence on innovation at both the individual and organizational levels (Arsawan et al, 2022;Parwita et al, 2021) or indirectly by fostering an environment that encourages employees' creativity and innovation capability (Ferreira et al, 2020;Lei et al, 2019). Therefore, to offer a solid grasp of the correlation between the type of knowledge, creativity, and innovation, this study investigates how knowledge is associated with innovation capability through mediating and moderating roles.…”

From Leadership to Agility: What, How and Where We Are Now?

“…This literature gap is the basis for the importance of conducting the current study. Moreover, in the rapidly changing business landscape, there are not many studies discussing this construct, even though leadership is the main trigger for organizations to build creativity and innovation (Arsawan, Hariyanti, Atmaja, Suhartanto, & Koval, 2022). The literature reveals that innovative organizations tend to be more agile in dealing with change (Attar & Abdul-Kareem, 2020;Şen & İrge, 2020).…”

Digital Transformation and Agile Leadership: Bibliometrics Analysis and Future Avenue

“…As a result, organizations are required to change dynamically and sustainably by optimizing internal resources and mapping opportunities to survive. Internal resources can be knowledge Lai et al, 2022), human resources (Arsawan, Kariati, et al, 2022), leadership pattern (Darvishmotevali & Altinay, 2022;Hartnell, Karam, Kinicki, & Dimotakis, 2020;Schell, 2019) and readiness to carry out digital transformation in routine organizational activities (Horsman, 2020;Viswanathan & Telukdarie, 2021) which ultimately leads to increased innovation capabilities (Arsawan, Hariyanti, Atmaja, Suhartanto, & Koval, 2022). Digital transformation deals with not only changing services to online but also overall integration of service areas to produce changes create value (Saniagati, & Welly, 2021).…”