Unlocking Organizational Performance: The Role of Knowledge Management, Innovation, and Dynamic Capability

Purpose: This study examines the impact of knowledge management on organizational performance in the hospitality industry, particularly in five-star hotels in Bali. It further investigates the mediating role of organizational innovation and the moderating effect of dynamic capability. Design/methodology/approach: A quantitative survey was conducted among 94 five-star hotels in Bali, yielding 90 valid responses from key managerial personnel. The data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) through SmartPLS 4. Findings: The results confirm that knowledge management positively influences both organizational innovation and performance. Dynamic capability strengthens the link between knowledge management and innovation. Additionally, organizational innovation significantly mediates the relationship between knowledge management and organizational performance. Research limitations/implications: This study focuses on five-star hotels in Bali, which may limit the generalizability of the results to other regions. Its cross-sectional design also restricts insights into the long-term dynamics of knowledge management and innovation. Future studies could explore broader geographical contexts and adopt longitudinal approaches. Theoretically, this research contributes to the Resource-Based View and Dynamic Capability Theory by showing how dynamic capability moderates the relationship between knowledge management and organizational innovation. Practically, the findings provide a framework for hospitality managers to better utilize knowledge, build dynamic capabilities, and support continuous innovation to enhance performance. Originality/value: This is the first study to investigate the moderating role of dynamic capability in the relationship between knowledge management and organizational innovation within the hospitality industry.