Effects of information technology and knowledge management capabilities on organizational innovation: the mediating role of organizational agility

What the paper says

Purpose This study aims to investigate how information technology and knowledge management capabilities (ITCs and KMCs) impact organizational innovation (OI) through organizational agility (OA) (in terms of adaptive and entrepreneurial agilities; AA and EA). Design/methodology/approach Data are collected from IT and bank managers working in Indian banking sector through a matched-pair field survey. The analysis is performed using AMOS-25, a covariance-based structural equation modeling approach. Findings The findings are twofold. First, ITC and KMC are essential to realizing augmented OA (in terms of AA and EA). However, AA (fostering incremental innovation) contributes more than EA (fostering radical innovation) to attain OI. Second, although KMC is not directly impacting OI, its indirect effect via AA is obtained. It indicates that in Indian banking firms, KMC is still in the infancy level and not fully entrenched in corporate strategies; hence, may not necessarily enhance OI. Originality/value Although extant literature focuses on the impact of ITC and KMC (studied in separate research) on agility and performance, it pays very scant attention to the ITC–KMC–OA–OI linkages. There is a lack of research regarding the joint effects of ITC and KMC on OA and OI, specifically, there exists no research highlighting the indirect effect of OA on the ITC–KMC–OI relationships. The two pivotal concepts “the necessity of KM practices fully ingrained in the organizational innovative culture” and “critical focus on incremental innovation more than radical innovation practices,” substantiate the novelty of this research.