Investigating the Relationship Between Knowledge Management Trait and Firm Performance: The Mediating Effect of Innovation

Abstract

This research delves into the intricate connection among individual ambidexterity, innovation, and company performance in Indonesia's life insurance sector. Ambidexterity refers to an individual's skill in effectively balancing exploratory and exploitative knowledge processes. This study seeks to clarify the importance of achieving this balance at the individual level and its impact on innovation and overall company performance. Employing a quantitative research approach, data were gathered from 48 participants occupying managerial to board director roles in the Indonesian life insurance industry. Structural equation modelling (SEM) was utilized for data analysis to uncover the interplay between individual ambidexterity, innovation, and company performance. The findings underscore that individual ambidexterity significantly affects company performance within the life insurance sector. Individuals capable of concurrently pursuing exploratory and exploitative activities foster an innovative culture within the organization. This culture, in turn, encourages openness to change and active engagement in seeking innovative solutions, ultimately enhancing company performance in terms of revenue growth and competitive advantage. This study makes a substantial contribution to the academic field by introducing and empirically validating the key concepts of individual ambidexterity, knowledge-seeking, and knowledge-sharing processes. It also highlights the crucial role of innovation in the relationship between ambidexterity and company performance, offering practical insights for management in the life insurance industry