The Effect of Organizational Knowledge Identity on Strategic Flexibility: The Mediating Role of Knowledge Intelligence and Digital Knowledge Empowerment

Purpose: Knowledge is the primary capital of every organization, and by managing it effectively, an organization ensures its survival and growth. Knowledge is the heartbeat of every decision made in an organization. Product development, service improvement, customer interaction, and overall organizational operations cannot function without such knowledge.  Organizational knowledge identity refers to the beliefs, values, tacit and explicit knowledge, learning culture, and behavioral patterns that define how an organization manages, shares, and utilizes knowledge. This identity encompasses what the organization knows about knowledge, how it creates, stores, and transfers knowledge, and how it applies knowledge in decision-making and daily operations. Organizational knowledge identity reflects a company’s cultural and strategic distinctiveness and serves as a foundation for developing cognitive capabilities and organizational innovation. In today’s digital and globalized era, characterized by rapid change, intense competition, and increasing environmental complexity, having a clear and strong knowledge identity has become essential for organizational survival. Knowledge-based organizations, as key drivers of innovation and scientific-economic development in a country, require intelligent knowledge management and utilization of digital capabilities. Organizational knowledge identity, as a measure of how an organization engages with knowledge, creates the necessary foundation for enhanced performance in the field of knowledge intelligence. Simultaneously, digital knowledge empowerment plays a critical role in facilitating rapid and up-to-date access to the knowledge required for strategic decision-making. However, a comprehensive understanding of how these concepts interact to enhance strategic flexibility, particularly within local contexts such as knowledge-based companies in Ilam Province, remains limited. This gap in the literature highlights the need for localized, empirically grounded research. This study, which focuses on knowledge-based companies in Ilam Province, examines the relationship between organizational knowledge identity and strategic flexibility while considering the mediating roles of knowledge intelligence and digital knowledge empowerment. This research not only deepens the theoretical understanding of these interrelated concepts but also provides practical insights for managers of knowledge-based firms seeking to strengthen knowledge- and technology-driven strategies. Therefore, the main research question is as follows: What is the impact of organizational knowledge identity on strategic flexibility, considering the mediating roles of knowledge intelligence and digital knowledge empowerment in knowledge-based companies in Ilam Province?
Research Method: This study is a quantitative research that is applied in nature, as its findings can be utilized in decision-making processes by managers of knowledge-based companies in the province of Ilam. In terms of design and methodology, this analytical-correlational study examines the relationships among the variables using Structural Equation Modeling (SEM). The statistical population includes all employees of knowledge-based companies in Ilam Province who are involved in knowledge-driven and innovative activities. These individuals play key roles in knowledge management, strategic decision-making, and the utilization of digital technologies. The sample size consisted of 200 participants selected from these companies through simple random sampling. The sample members were senior managers, middle managers, knowledge specialists, and information technology experts. Data were collected using a standardized questionnaire. The questionnaire content was designed based on a five-point Likert scale ranging from "Strongly Agree" to "Strongly Disagree." To measure the organizational knowledge identity variable, we used the standardized scale developed by Gupta and Govindarajan (2021). For strategic flexibility, a standardized questionnaire by Jiang and Cheng (2021) was employed. The organizational knowledge intelligence variable was assessed using the validated scale developed by Ranjan et al. (2023), and the digital knowledge empowerment variable was measured using the standardized instrument developed by Tiss (2018). The content validity of the questionnaire was confirmed through expert reviews by faculty members and specialists in the fields of knowledge and strategic management. Additionally, the Average Variance Extracted (AVE) values were used to assess construct validity. Since the AVE values for all the research variables exceeded the recommended threshold of 0.50, convergent validity was established. The reliability of the measurement instrument was evaluated using Cronbach’s alpha coefficient and composite reliability. The obtained values for both Cronbach’s alpha and composite reliability were above 0.70, indicating acceptable internal consistency and reliability of the scale. For data analysis, Structural Equation Modeling (SEM) was conducted using Visual PLS software.
Findings: The results indicate that organizational knowledge identity has a significant positive effect on knowledge intelligence (β = 0.896, t > 1.96), digital knowledge empowerment (β = 0.845, t > 1.96), and strategic flexibility (β = 0.481, t > 1.96). Furthermore, both knowledge intelligence (β = 0.859, t > 1.96) and digital knowledge empowerment (β = 0.872, t > 1.96) significantly and positively influenced strategic flexibility. The mediation analysis reveals that both knowledge intelligence and digital knowledge empowerment significantly mediate the relationship between organizational knowledge identity and strategic flexibility, independently and completely.
Results: The findings indicate that organizational knowledge identity enhances strategic flexibility directly and indirectly by fostering intelligent and digital capabilities in knowledge management. This highlights the importance of integrating cultural factors (i.e., knowledge identity) with technological enablers (i.e., digital empowerment) in knowledge-oriented organizations. Overall, this study proposes a comprehensive theoretical framework that demonstrates that organizational knowledge identity, as the most fundamental form of intangible capital, can effectively drive strategic flexibility through the enhancement of knowledge intelligence and digital knowledge empowerment. These findings enrich the theoretical literature on knowledge and strategy and offer valuable practical implications for organizations seeking sustainability and competitiveness in dynamic and uncertain environments.
Originality and Value: This study contributes to the literature on knowledge management and organizational strategy by integrating the concepts of organizational knowledge identity, knowledge intelligence, digital knowledge empowerment, and strategic flexibility into a unified theoretical framework. Moreover, conducting this research in knowledge-based firms located in an underdeveloped and resource-constrained province such as Ilam adds significant value, demonstrating that even under limited resources, focusing on intangible knowledge and digital assets can enhance the strategic performance. These findings offer practical and valuable implications for managers of knowledge-based companies and regional policymakers aiming to improve organizational effectiveness.The findings of this study offer valuable practical implications for managers and leaders of knowledge-based companies particularly those operating in underprivileged or less-developed regions such as Ilam Province. Given the limitations of financial resources, technological infrastructure, and access to specialized human capital in such areas, focusing on intangible organizational assets such as knowledge identity, knowledge intelligence, and digital knowledge empowerment can serve as a low-cost yet highly effective strategy to enhance strategic flexibility and, consequently, organizational survival and competitiveness.