Competitive Advantage and Firm Performance: The Role of Organizational Culture, Organizational Innovation, and Knowledge Sharing

The swift economic transformations and process of globalization have prompted enterprises to urgently develop efficient ways to enhance performance and ensure their long-term existence. The objective of this study is to investigate whether organizational culture (OC), knowledge sharing (KS), and organizational innovation (OI) helps to achieve competitive advantage (CA) which leads to firm performance (FP). The research is carried out in the province of Punjab, Pakistan. Three hundred twenty-two managers from the textile sector were surveyed regarding their familiarity with previous and current organizational practices regarding cultural and innovation-related factors inside their organization. The data was validated and the potential relationships were investigated using variance-based partial least square structural equation modeling (PLS_SEM). According to resource-based view theory, study discovered that organizational culture has a strong positive influence on knowledge sharing, organizational innovation, and competitive advantage. In addition, competitive advantage has a significant influence on firm performance. Furthermore, study confirms complementary partial mediation of knowledge sharing and organizational innovation between the relationship of organizational culture and competitive advantage. The current study emphasized the crucial role of organizational culture in achieving operational success in the company. It identified knowledge sharing and organizational innovation as important factors for creating a competitive advantage, which in turn enhances financial performance. The findings offer crucial insights for managers to accurately comprehend the alignment between the organizational culture and the strategic trajectory of the company. By simultaneously examining the relationships between organizational culture, knowledge sharing, organizational innovation, competitive advantage, and firm performance, this paper extends the previous empirical studies. It may assist managers in formulation of strategies to develop competitive advantage and business.