Knowledge Management Orientation and Organizational Performance: The Mediating Effect of Organizational Agility in Sri Lankan Listed Companies

Knowledge management plays a critical role in enhancing organizational performance; however, the behavioral effect of knowledge management on performance remains inconclusive. This paper investigates the effect of Knowledge Management Orientation (KMO) on Organizational Performance (OP) and examines the missing link between KMO and OP through Organizational Agility (OA). The conceptual model was tested using data collected from 254 listed companies in Sri Lanka. The measurement and structural models were analyzed using the Structural Equation Modelling technique. The findings revealed a significant positive relationship between KMO and OP and confirmed that organizational agility partially mediates the relationship between KMO and OP. This indicates that knowledge-oriented behaviors alone do not directly ensure performance improvement unless firms possess the agility to respond effectively to market volatility and sudden environmental changes. The results highlight that the ability of a firm to respond to dynamic market conditions is essential to achieve superior performance while managing organizational knowledge. The link between KMO, OA, and OP generates a holistic perspective that extends knowledge management and strategic management literature. Practically, the findings suggest that managers of Sri Lankan listed companies should strengthen knowledge-oriented practices while simultaneously developing organizational agility to enhance overall firm performance and competitiveness.