Abstract
PurposeThis study examines the link between the knowledge creation process, ambidextrous innovation, and competitive advantage. Further, this study also tested the moderating role of organizational agility on the relationship between the knowledge creation process and ambidextrous innovation.Design/methodology/approachThe empirical study’s data were collected by surveying 306 respondents employed in 140 Pakistani Small and Medium Enterprises (SMEs). The questionnaire was designed according to the study’s requirements and was based on theoretical knowledge and findings from previous research on the knowledge-creation process, ambidextrous innovation, and competitive advantage. All hypotheses were tested using a structured regression method.FindingsThe study indicates that the knowledge creation process significantly impacts a firm’s competitive advantage. Additionally, this study demonstrates that ambidextrous innovation can moderate the relationship between the knowledge-creation process and competitive advantage.Research limitations/implicationsFuture studies should examine mediating factors, such as organizational culture, leadership style, and industry characteristics, as well as moderating variables, such as environmental turbulence.Practical implicationsThis study guides SME leaders on the importance of knowledge creation and ambidextrous innovation in achieving operational success and gaining a competitive advantage.Originality/valueThis study explores how the knowledge creation process directly and indirectly, enhances organizational capacity for competitive advantage through the mediating roles of ambidextrous innovation and the moderating role of organizational agility.