Organizational ambidexterity and SMEs performance: Assessing the mediating role of high financial capacity and the moderating role of strategic agility

This study examines the impact of organizational ambidexterity (OA) on the performance of small and medium-sized enterprises (SMEs). In the context of the entrepreneurial finance and strategy nexus, this study reconciles firm performance by examining the mediating role of high financial capacity (HFC) and highlights how the contextual parameter of strategic agility (SA) moderates this relationship within SMEs. Ultimately, this research provides a theoretical framework to trigger OA across SMEs. For empirical investigation, Partial Least Squares Structural Equation Modeling (PLS-SEM; symmetric perspective) and Fuzzy Set Qualitative Comparative Analysis (fsQCA; asymmetric perspective) were employed to test the theoretical framework and provide complex configurations of conditions under which high and low levels of performance, respectively, occur. Robust fit indices such as the Gaussian copula approach and Harman’s single factor were employed to validate the endogeneity/common method bias issues. For this purpose, data were collected from 343 managerial workers (CEOs/managers) across six distinct industries (sports, leather, electronics, textiles, consumer goods, and apparel industries) at a response rate of 76.22%. The results from the PLS-SEM analysis reveal a complementary partial mediation effect between OA and SME performance, mediated by HFC, indicating an organizational/industrial phenomenon. Moreover, the moderation process strengthens the close association between OA and SME performance. In the asymmetric perspective, fsQCA unveils two causal configurations: M1, representing a high-level combination, and M2, indicating a low-level combination. This study offers comprehensive theoretical and managerial frameworks for the systematic implementation of OA in SMEs to enhance performance. Additionally, it proposes avenues for further research and practice improvement in regulating OA–SME practices.