Unlocking Innovation from Within: The Power of Tacit Knowledge and Change Adaptability in Indonesian Internal Organisational Innovation Processes

Abstract

Abstract Research purpose. The study examines how tacit knowledge sharing affects internal organisational innovation by exploring change adaptability as a mediator. Hence, it tries to fill this gap and further explain the role played by tacit knowledge sharing in the entire knowledge management process. Given the mediating effect of change adaptability, this study aims to provide new insight into effective management and sharing tacit knowledge among organisations to improve their innovation processes. Design / Methodology / Approach. This study adopted a quantitative cross-sectional survey design, with Partial Least Squares Structural Equation Modeling (PLS-SEM) as the main statistical technique. Such a method is best applied in this research, where one confirms hypotheses and the relationship between observed and latent variables. The samples were selected based on judgmental non-probability and purposive sampling approaches. The SEM was used in data analysis. It contributed to understanding the relationship of the variables, such as sharing tacit knowledge, change adaptability, and internal organisational innovation. Findings. The study proved that tacit knowledge sharing is highly significant in internal organisational innovation, mediated by change adaptability. Direct effect: Tacit knowledge sharing directly affects the organisational ability to adapt to change and internal innovativeness, thus underpinning its basis. Change adaptability mediates the effect of tacit knowledge sharing on internal organisational innovation, which influences innovation outcomes. Path coefficient analysis confirms the positive influence of tacit knowledge sharing on adaptability to change and innovation. Indirect Effects: Empirical examination has proved the significant mediating effect of change adaptability in leveraging tacit knowledge for innovation. These results suggest that the strategic value of tacit knowledge and adaptability, which will drive sustainable innovation within organisations and support their integration within strategic frameworks, is fully justified. Originality / Value / Practical implications. This is a new model used for the first time to suggest novel contributions and usefulness in understanding the relationship among sharing of tacit knowledge, change adaptability, and innovation at the internal level of the organisation. Tacit knowledge sharing, combined with change adaptability, is a model for internal organisational innovation. Therefore, it fills an important gap in the existing literature: the quantification of adaptability in mediating the effect of tacit knowledge on innovation. The results of this study will provide empirical validation of these relationships and further contribute to the knowledge in practice, particularly by emphasising the mediating role of change adaptability, which has been relatively underexplored. Practically, tacit knowledge sharing within adaptive organisational environments is thus an important call towards effective adaptation to change. The level of enhancement of these dimensions as core competencies through strategies could make a difference in the success of businesses. The importance of adaptability has to be emphasised by training programs and management practices that would provide the same skills. Other important avenues include those that work towards cultivating supportive organisational cultures that would facilitate tacit knowledge exchange, support employee interaction and informal knowledge exchange, and measures to reward innovation efforts. Investment in human resources practices that encourage learning and adaptability will continue to encourage knowledge sharing and innovation, including improving training programs, offering mentorship opportunities, and developing performance management systems that support and reward behaviours around innovation. This study contributes to the literature with a developed framework and empirical examination of the interrelations between tacit knowledge sharing, change adaptability, and innovation. It provides practical strategies that can be of value to the organisation in enhancing innovation capabilities through knowledge management.