Knowledge-oriented leadership and organizational resilience in SMEs during a crisis: The mediation role of innovation quality

In the current unpredictable business landscape, organisational resilience is essential for firms, particularly small and medium-sized enterprises (SMEs), to navigate crises such as the COVID-19 pandemic. Given the typically limited resources of SMEs, this study sheds light on how knowledge-based factors and dynamic capabilities—such as knowledge-oriented leadership, absorptive capacity, and innovation quality—can be strategically managed to bolster organisational resilience in SMEs. Adopting a knowledge-based view and the dynamic capability theory, the study emphasises the significance of absorptive capacity and knowledge-oriented leadership in fostering innovation quality, which, in turn, enhances organisational resilience capabilities. Data from 213 Thai SMEs reveal that while absorptive capacity does not directly impact resilience capabilities, its effect is mediated by innovation quality, highlighting the necessity of high-quality innovation for effective crisis management. Knowledge-oriented leadership significantly influences coping and adaptation capabilities, with innovation quality completely mediating the relationship between knowledge-oriented leadership and anticipation capability. Furthermore, organisational unlearning enhances the impact of knowledge-oriented leadership on adaptation capability, underscoring the importance of discarding obsolete knowledge for resilience. The study also identifies competitive intensity as a moderator between absorptive capacity and anticipation capability, suggesting that SMEs in competitive industries utilise external knowledge better for resilience.