Roles of dynamic capabilities and knowledge management strategies on organizational performance

The theoretical and practical impact of dynamic capabilities on organizational performance remains elusive. This study investigates the mediating role of a firm’s dynamic capabilities, measured by IT capability and environmental scanning. In addition, by proposing that knowledge management (KM) strategies play a crucial moderating role in the relationships between entrepreneurial orientation (EO), dynamic capabilities, and organizational performance, this study highlights the need for effective KM strategies to maximize organizational performance. A questionnaire was administered to Korean managers who understand and can answer overall characteristics of their organizations. Our study found that dynamic capabilities partially mediated the relationship between EO and organizational performance. In addition, our findings show that the relationship between EO and organizational performance is stronger when firms emphasize personalization KM strategies, while the firms focusing on codification KM strategies demonstrate a stronger relationship between IT capability and organizational performance.