How organizational learning dimensions influence firms’ competitive strategy and performance in a lower-middle-income country: A mediation model

Abstract

AbstractOrganizational learning (OL) offers knowledge sharing and innovation to firms. OL is a driver of firms’ competitive advantage and performance, yet this symbiotic relationship has not been adequately explored in most developing countries. It is against this backdrop that the current study aims to develop a baseline model in the context of a low- and middle-income country to explain the extent to which OL dimensions impact firms’ competitive strategy and performance. Our article utilizes a quantitative research approach and deductive reasoning. Cross-sectional survey data have been collected from small and medium enterprises across manufacturing, hospitality, extraction, transportation, construction, and oil and gas subsectors. Our data have been analyzed using the structural equation modelling technique. The study has revealed that OL dimensions of knowledge acquisition, knowledge distribution, and knowledge interpretation have positive and significant impacts on firms’ competitive strategy and performance. Moreover, competitive strategy significantly and positively mediates the relationship between OL dimensions and firm performance. The theoretical implications of the study include the development of a baseline model to explain the extent to which OL dimensions impact firms’ competitive strategy and performance in the context of lower-middle-income countries, where such studies are largely inadequate. Practically, this study is among the very few to present contextual determinants of firm competitive strategy and performance to guide investors and business owners in attracting, retaining, and transferring knowledge in order to formulate fierce strategies.

Keywords

• organizational learning
• competitive strategy
• performance
• small and medium enterprises