International Journal of Management Research and Emerging Sciences

Vol 13, No 3, September 2023, PP. 127-151

Analysis of Knowledge Management, Organizational Ambidexterity and

Financial Innovation in Banking Sector
Khurram Aziz
Hailey College of Commerce, University of Punjab, Pakistan
Sadia Farooq
Hailey College of Commerce, University of Punjab, Pakistan
sadia.hcc@pu.edu.pk

Corresponding: khurramaziz786@gmail.com
ARTICLE INFO ABSTRACT
Article History: The banking industry is the backbone of an economy. The competition in
Received: 15 Sep, 2023 the banking sector and the threat of a third financial crisis requires banks to
Revised:13 Oct, 2023 become more effective and efficient. It may be accomplished through
Accepted:17 Oct, 2023 financial innovation. The primary purpose of the research is to develop a
Available Online: 14 Dec, 2023 framework for fostering financial innovation through evaluating the
relationship among knowledge management (KM), organizational
DOI: ambidexterity (OAMB), and level of financial innovation (LoFI) in the
https://doi.org/10.56536/ijmres.v13i4.529 banking sector and to develop a framework. To achieve the research aim, a
Keywords: survey was carried out among the commercial banks of Pakistan. The
Knowledge Management, findings of this research are based on 383 responses from Pakistan. The
Organizational Ambidexterity, collected data was analyzed using structural equational modeling. Findings
Financial Innovation, indicated that KM significantly influenced OAMB and LoFI, and OAMB
Banking Sector. significantly influenced LoFI. Moreover, organizational climate (OC)
moderated the relationship between KM and OAMB, and environmental
JEL Classification: dynamism moderated the relationship between OAMB and LoFI. The
O32, O33, G21, M15 researcher also analyzed the relationship between OAMB, KM, and LoFI
and found that OAMB mediated the relationship between KM and LoFI.
Based on the research findings, the researcher suggested that banks should
enhance the level of KM and OAMB as these two things increase LoFI.
Banks should also foster OC in a way that may enhance learning and sharing.
Likewise, banks should also critically appraise the external environment to
increase LoFI.
© 2023 The authors, under a Creative Commons Attribution-Non-Commercial 4.0.

INTRODUCTION
The banking sector is pivotal in a country's economic growth and development (Shahid, 2015).
Banks accept deposits and grant loans to both the private and public sectors. Nayak (2021) suggested
that a country's banking sector takes considerable influence from the changes in regulation,
internationalization of business, and digitization, which may influence banks' processes and products.
Banks may use financial innovation for value creation and enhancement. Qamruzzaman et al., (2021)
argued that financial innovation in the banking industry is not new; instead, it has been taking place
for the past several decades. It is one of the main factors that radically changed the financial systems
during the 1980s and 1990s. Consequently, the banking industry has replaced traditional teller roles
with automated telling machines and plastic cards. As new factors are emerging, the banking sector
constantly needs financial innovation (Muthinja & Chipeta, 2018). Therefore, it is vital to understand
the level of financial innovation in the banking sector and evaluate the determinants of financial
innovation in the banking industry. Such analysis will help in the identification of areas for
improvement.
127
Aziz & Farooq IJMRES 13(4) 2023, 127-151

Chen et al., (2011) suggested that firms should analyze the impact of various factors on their level of
financial innovation and make appropriate decisions based on such analysis. In this regard, an
emerging concept is organizational ambidexterity (OAMB). Cao et al., (2009) suggested that OAMB
is an organization’s capability of exploiting existing competencies and exploring new opportunities.
It enhances organizational performance and its competitiveness in the market. Kollmann and
Stockmann (2014) highlighted that advancing organizations in exploratory and exploitative
environments is a core issue of modern management research and is also relevant to the banking sector.
Brem (2017) suggested that further research is required to analyze the concept of OAMB at the micro
level from both theoretical and practical perspectives, re-examine its complexity, and analyze it locally
and internationally. Park et al., (2020) argued that past research did not focus on the digitization of
operations. As new mechanisms related to OAMB have emerged, this issue has to be explored in
industries with certain levels of digitization. Moreover, Venugopal et al., (2020) suggested that future
research should analyze the concept of OAMB at the micro level from both theoretical and practical
perspectives, re-examine its complexity, and analyze it in local and international contexts. Further
conceptual and empirical research (qualitative and quantitative) is needed in this area. Therefore,
future researchers should analyze OAMB, both conceptually and empirically. Park et al., (2020)
argued that past research should have focused on the digitization of operations. As new mechanisms
related to OAMB have emerged, this issue has to be explored in industries with certain levels of
digitization. Moreover, Venugopal, Krishnan, Upadhyayula, and Kumar (2020) suggested that future
research should analyze the concept of OAMB at the micro level from both theoretical and practical
perspectives, re-examine its complexity, and analyze it in local and international contexts.
This research aims to develop a framework for fostering innovation through evaluating the relationship
among knowledge management, organizational ambidexterity, and level of financial innovation in the
banking sector and to develop a framework. The context for this research was Pakistan’s banking
sector, which offers knowledge-intensive services. Pakistan is the world’s largest Muslim country in
terms of population and is also the most prominent Muslim democracy and the only Muslim country
with atomic power. It is also the fifth largest country in the world regarding population. The country
has a diverse cultural and economic base (Ministry of Finance, 2023). Moreover, the banking sector
of the country has observed significant transformation in the last decade (Maqsood et al., 2021). The
banking sector of Pakistan is also growing, and it has a mix of banks that offer traditional and Islamic
banking services.

128
Aziz & Farooq IJMRES 13(4) 2023, 127-151

LITERATURE REVIEW
This section will present a review of the literature. The researcher will integrate literature and
theory to develop research hypotheses.
Resource-based Theory
The resource-based view (RBV) asserts that a firm needs to have strategic resources and capabilities
that may help it enjoy excellent performance over time. This theory was initially proposed by Penrose
(1959) and later popularized by Barney (1991), who suggested that RBV is linked with the possession
of certain types of resources and competencies by the firm, such that these resources and competencies
may help a firm in attaining superior performance and long-term success. RBV proposed that a firm
may have valuable, rare, difficult to imitate, and non-substitutable resources that may help a firm in
achieving competitive advantage in the markets in which a firm operates. So, to develop a sustainable
competitive advantage, there is a need to analyze internal resources and competencies such that these
resources and competencies can be used. However, if internal analysis discovers that the firm lacks
such resources and competencies, then such resources and competencies should be developed and used
in the strategy formulation. Resources are things a firm owns, and competencies are what a firm
performs (Collins, 2021).
Knowledge-based View of the Firm
Nonaka (1991) suggested that knowledge is the underlying factor on which competitive advantage is
based. Knowledge is needed to compete in the knowledge economy, so firms need to evaluate their
knowledge management practices (Cuthbertson & Furseth, 2022). The knowledge-based view asserts
that knowledge is difficult to copy, enshrined in an organization’s systems, procedures, and climate,
and is complex to develop (Teece & Leih, 2016). Knowledge management may develop knowledge-
related competencies and systems to enhance firm innovation (Gassmann & Keupp, 2007). Using
knowledge, the firm would be able to reconfigure, redirect, change, adjust, and develop knowledge-
based capabilities to develop competitive advantage. Moreover, firms would use these capabilities to
respond to threats and to capture opportunities.
Level of Financial Innovation
The level of financial innovation (LOFI) is the outcome variable of this research. Qamruzzaman and
Jianguo (2018) suggested that financial innovation involves developing and introducing new financial
products and systems, which may take the form of new loans and advances, new banking services,
new credit cards, etc. Likewise, new systems may include new marketing practices, new ways of
transferring money between accounts, opening bank accounts, getting loans, customer relationship
management, etc. Moreover, Chen et al., (2017) and Zavolokina et al., (2016) highlighted that financial
innovation takes place in the form of new lending instruments, use of new and emerging technologies
(for example, blockchain, encryption, robotic process automation, intelligent analytics, etc.) use of
more secure payment gateways, use of social media marketing practices, etc. These things may
transform core banking operations, administrative processes, and marketing practices.
129
Aziz & Farooq IJMRES 13(4) 2023, 127-151

Organizational Ambidexterity
Lubatkin et al., (2006) suggested that OAMB is an organization's ability to exploit existing
competencies and explore new opportunities. Tushman and Anderson (1986) defined that an
ambidextrous organization is capable of implementing not only incremental (exploitative) changes in
the organization but also revolutionary (exploratory) changes. He and Wong (2004) added that an
ambidextrous organization (AMBO) can explore and exploit external environmental opportunities.
Raisch and Birkinshaw (2008) suggested that OAMB could be defined as an organization's ability to
align itself with today's business demands and, at the same time, adapt to changes happening in the
environment. This will enhance the firm's performance and help it achieve organizational goals.
Lubatkin et al., (2006) suggested that ambidextrous organizations can implement not only incremental
(exploitative) changes in the organization but also revolutionary (exploratory) changes.
Knowledge Management
Davenport and Prusak (1998) suggested that knowledge is the information combined with experience,
context, interpretation, and reflection and can be categorized into tacit and explicit knowledge
(Nonaka, 1994). According to Barclay and Murray (1997), KM deals with the systematic management
of essential knowledge of the organization and involves activities such as identification, acquisition,
storage, sharing, and application of knowledge. KM also involves identifying and mapping intellectual
assets within the organization so that new knowledge can be generated. This knowledge can be used
to develop a competitive advantage (Li et al., 2020). This competitive advantage may positively impact
current and future sales and profits of the organization. Consequently, KM would have a positive
impact on the performance of the organization. Similar evidence arises from the work of Gold and
Malhotra (2001), Lee and Choi (2003) and Zack et al., (2009).
Organizational Climate
The concept of OC was developed and presented by Lewin et al., (1939). It is the reflection of cultural
values and psychological processes taking place in the organization. Ehrhart and Raver (2014)
suggested that supportive and positive OC generates positive feelings in people's minds, whereas
negative OC leads to disruptive employee behavior. Moreover, George (2015) suggested that if
employees experience positive OC, they may go beyond their formal job responsibilities and work for
the organization even if they are not formally required to do so. Sokol et al., (2015) suggested that OC
moderates several organizational factors. When evaluating the relationship between different factors,
one may evaluate the moderating influence of OC on those factors. Several organizational processes
depend on OC. It includes problem-solving, decision-making, communication, and coordination.

130
Aziz & Farooq IJMRES 13(4) 2023, 127-151

Environmental Dynamism
Porter (2000, 2008) and Wheelen et al., (2015) highlighted that organizational dynamism (ED) is
associated with unexpected, problematic to predict, and continuous changes in environmental forces.
Organizations plan their future and implement and monitor their plans. Wheelen et al., (2015)
suggested that the organization's external environment could be specific or uncertain. Likewise, it
could be stable or dynamic and straightforward or complex. It is easier for an organization to plan for
a simple, stable, and specific environment. On the other hand, planning for uncertain, complex, and
dynamic environments is challenging. If the future is uncertain, the organization does not have a basis
for a future course of action. Likewise, if the environment is dynamic, then the whole planning of the
organization becomes obsolete because, by the time the organization is implementing its plans, the
factors on which plans are based may have changed.
Knowledge Management and Organizational Ambidexterity
An important issue concerning the OAMB is how organizations become ambidextrous. Lubatkin et
al., (2006) suggested that ambidextrous organizations can implement exploitative and exploratory
changes. It requires knowledge about the organization's internal and external environment. A formal,
structured, and systematic knowledge management system helps provide such information for
decision-making. So, it is envisaged that an organization's tendency to explore and tap exploitative
and exploratory opportunities may increase with the presence of KMS in the organization. Landry et
al., (2016) suggested that tacit knowledge is embedded in the routines of employees and the way things
are carried out in the organization. Herstad et al., (2014) suggested that conscious knowledge
management practices of the organization and its members create an environment in which employees
use tacit and other explicit knowledge to utilize the strengths of the organization to overcome
weakness, capture opportunities and avoid threats (OAMB). According to March (1991),
organizations should allocate resources to stimulate the knowledge of organizational members. A
knowledge-sharing environment leads to mutual learning, which helps the organization gain a
competitive advantage. In the context of knowledge management, both exploitative and exploratory
learning should take place in the organization as both are needed to capture existing opportunities and
explore new ones that may arise over time (Argote & Ingram, 2000; Huber, 2001). Relying on RBV
and KBV theories, knowledge should be regarded as a resource and knowledge management should
be regarded as a process, respectively, that may enhance the level of OAMB by creating an enabling
situation in which existing processes may be optimized and new opportunities are captured.
H1: There is a significant positive influence of KM on OAMB.
Knowledge Management and Level of Financial Innovation
Ahn et al., (2017) suggested that firms should analyze their antecedents to increase innovation.
Sabherwal and Becerra‐Fernandez (2003) evaluated the relationship between knowledge management
activities and the level of innovation. They suggested that activities linked with knowledge creation
help employees reconfigure and utilize existing information and knowledge. It helps employees
perform their tasks and may lead to the generation of new ideas, solutions, and knowledge to solve
131
Aziz & Farooq IJMRES 13(4) 2023, 127-151

problems. Subramaniam and Youndt (2005) examined the impact of different intellectual capital
aspects on the organization's innovation capabilities. They conducted a longitudinal study and
collected data from 93 organizations. Their research findings highlighted that the interaction of people
in the organization, one of the elements of knowledge-management practices, leads to the development
of incremental and radical innovation in the organization. They asserted that the organization's human
capital is positively associated with the radical innovation capability of the organization. It is
consistent with KBV, proposed by Grant (1996), which asserts that by using knowledge, the firm could
reconfigure, redirect, change, adjust, and develop knowledge-based capabilities for developing
competitive advantage. Earlier, Nonaka and Takeuchi (1995) suggested that knowledge is embedded
at different levels (individual and team) in the organization, so there has to be a mechanism through
which such knowledge can be shared among organizational members. Such sharing enables employees
to establish new routines and develop new mental models. Sharing and exchanging knowledge among
members leads to collaborative learning. It brings in synergistic benefits and improves the stock of
knowledge of the organization, both tacit and explicit knowledge, which can be used to develop
innovative products and services, thus raising the overall level of innovation of the organization
(Tamer et al., 2003).
H2: There is a significant positive influence of KM on level of financial innovation.
Organizational Ambidexterity and Level of Financial Innovation
To increase innovation, firms should evaluate their antecedents (Adeyeye et al., 2016). OAMB could
be one such factor. Bresciani et al., (2017) suggested that attaining sustainable competitive advantage
depends on exploiting current resources and exploring new opportunities. Exploration and exploitation
of opportunities are among the critical features of OAMB (Gibson & Birkinshaw, 2004). Exploiting
and exploring current opportunities may lead to developing new processes and products. It is a form
of innovation because the organization was not previously indulged in these processes and production
of these goods and services. Moreover, Jansen et al., (2012) researched unit-level ambidexterity and
reported that it positively influences several organizational outcomes, including overall business
performance. Their research was based on multisource and lagged data collected from 285
organizational units located in 88 autonomous branches. They analyzed collected data using
hierarchical linear modeling. They reported that OAMB leads to a higher level of innovation (process
and product). Development of OAMB-related capabilities is consistent with the premises of RBV
theory that asserts that the firm possesses certain types of resources and competencies, such that these
resources and competencies may help a firm attain superior performance and long-term success. RBV
proposed that a firm may have valuable, rare, difficult to imitate, and non-substitutable resources that
may help a firm in achieving competitive advantage in the markets in which a firm operates. Moreover,
Jansen et al., (2012) researched unit-level ambidexterity and reported a link between OAMB and
organizational performance. They reported that OAMB leads to higher innovation (process and
product). However, their researcher did not focus on the banking industry and financial innovation.
H3: There is a significant positive influence of OAMB on level of financial innovation.

132
Aziz & Farooq IJMRES 13(4) 2023, 127-151

Knowledge Management, Organizational Ambidexterity and Level of Financial Innovation

Subramaniam and Youndt (2005) analyzed the influence of different innovation capabilities of the
organization. Their research findings highlighted that the interaction of employees, one of the elements
of knowledge-management practices, may lead to the development of incremental and radical
innovation. Knowledge management practices may lead to developing a knowledge-conducive culture
and knowledge repository. Augier and Vendelo (1999) suggested that knowledge management
practices help organizations capture market opportunities. Sabherwal and Becerra‐Fernandez (2003)
also worked on the relationship between knowledge management activities and the level of innovation.
They suggested that activities linked with knowledge creation help employees reconfigure and utilize
existing information and knowledge. It enables employees to perform their tasks and may lead to the
generation of new ideas, solutions, and knowledge to solve problems. It is envisaged that a knowledge
repository allows employees to identify current opportunities.
Moreover, this knowledge repository also supports employees in exploring new opportunities. It may
enhance the level of financial innovation. Gibson and Birkinshaw (2004) suggested that OAMB
creates a context for simultaneous alignment and adaptability of opportunities to attain competitive
advantage. This context may help organizations sustain and improve innovation performance in a
dynamic business environment. The mediating influence of OAMB is aligned with RBV, which asserts
that competitive advantage (LoFI in the case of this research) is based on the possession of unique
resources and capabilities, so OAMB will be a capability that would mediate the relationship between
KM and LoFI. It will be enshrined in the organizational resources and competencies. Since OAMB
focuses on exploration and exploitation such that exploration is outward-focused, it is consistent with
RBV, which focuses on aligning organizational systems and strategies with the external environment.
H4: OAMB significantly mediates relationship between knowledge management and level of
financial innovation.
Knowledge Management, Organizational Ambidexterity and Organizational Climate
From KM and OAMB's perspective, if an organization has a supportive and favorable climate, then
there are more chances that KM strongly influence OAMB. The underlying reason is that OC would
provide a context for KM and OAMB. If the organizational climate is not supportive, employees may
resist their job duties, including creating, acquiring, storing, sharing, and applying information
(George, 2015). On the contrary, in a supportive and positive OC, employees not only perform their
formal inline duties but also go beyond this and may show organizational citizenship behavior (going
beyond formal inline duties and doing extra work for the organization). Relying on RBV, a supporting
and positive OC should be regarded as a resource that fosters OAMB by creating an enabling situation
in which existing processes are optimized, and new opportunities are captured. Such OC may
encourage people to think outside the box and take risks, which would enhance the positive influence
of KM on OAMB. Moreover, Chen and Huang (2007) suggested that a challenging, stimulating,
creative, and risk-taking environment leads to competitive advantage development. Despite the
organization's efforts to develop a robust knowledge repository for enhancing innovativeness, without
133
Aziz & Farooq IJMRES 13(4) 2023, 127-151

a knowledge-sharing climate, such a knowledge repository may not be effective. Likewise, an

innovative climate encourages employees to use and embody knowledge in developing new processes
and products. Anderson and West (1998) suggested that if employees value innovation and tolerate
the risk of failure, it would enhance their level of creativity. It would enable them to cope with
uncertainty and develop innovative solutions through which they explore and exploit opportunities. It
may take the form of the development of new processes and new products (Hon et al., 2014). An
innovative climate encourages employees to take risks and indulge in challenging and creative tasks
to capture market opportunities (Chen & Huang, 2007).
H5: There is a meaningful impact of the OC (condition) on the relationship between KM and OAMB
Organizational Ambidexterity, Financial Innovation and Environmental Dynamism
Porter (2008) and Wheelen et al., (2015) argued that environmental dynamism pressurizes the
organization and its decision-makers. Suppose the environment is not simple and stable. In that case,
the organization and its decision-makers should be on their toes and scan changes in the external
environment so that a fit can be achieved between internal factors of the organization and external
environmental forces. The complex, dynamic, and uncertain environment constrain management’s
ability to plan and execute future strategy (Herzog, 2011). It is envisaged that the relationship between
OAMB and LOFI will be influenced when the external environment is dynamic. The researcher
anticipates that a change in the external environment may compel organizations to explore and exploit
more and more so that new processes and products can be developed. Likewise, if the environment
does not change too quickly, organizations do not have to exploit and explore a lot and can survive
with few skills. Porter (2008) suggested that to maintain sustainable competitive advantage, an
organization has to continuously explore changes in the external environment and develop a
capability/competence (meta-competence) to develop new competencies (innovation). Since the
capability to develop new capability/competence is linked with OAMB, it can be asserted that OAMB
is linked with LoFI. It also asserts that ED is a moderating relationship between OAMB and LoFI.
The proposed moderating influence of ED is also supported by RBV, which asserts that an
organization must adjust its internal systems to capture external opportunities. More adjustments will
be needed if the external environment is highly dynamic, and vice versa.
H6: There is a meaningful impact of the ED (condition) on the relationship between OAMB and LoFI.
Theoretical Framework of Research
The underlying theories and relational literature became the basis of the development of the theoretical
and conceptual framework, which is given below. The researcher linked all hypotheses and developed
an integrated framework (figure 1).

134
Aziz & Farooq IJMRES 13(4) 2023, 127-151

Figure 1 Consolidated Research Model

RESEARCH METHODOLOGY
To achieve the research aim, the researcher conducted a survey among Pakistani banks. The
researcher developed a structured questionnaire for the collection of primary quantitative data to be
used in hypotheses testing. There were two sections in the questionnaire. The first section covered
questions related to LoFI, OAMB, KM, OC, and ED, whereas section two dealt with general
information about the banks, that participated in this research project. The evaluation of LoFI, OAMB,
KM, OC, and ED was carried out using a five-points agreement Likert scale. For adapting scales for
all constructs (LoFI, OAMB, KM, OC, and ED), the researcher modified original statements to match
the requirements of the banking industry and the Pakistani context. Moreover, since the original scales
were modified, the researcher evaluated the reliability and validity of the findings. The researcher
adapted the scale for the level of financial innovation from Ndubisi et al., (2015), who researched the
impact of innovation strategy on the performance of international technology services ventures. The
level of financial innovation was analyzed in three areas, process innovation, services innovation, and
administrative innovation. Each of these had five dimensions (observed). Likewise, the researcher
adapted the scale for knowledge management from Castro et al., (2011), who conducted moderated
mediation analysis with respect to knowledge processes, knowledge intensity, and innovation.
Knowledge management was evaluated in four areas, which were information organization and
knowledge sharing (5 dimensions), knowledge creation (4 dimensions), knowledge storage (4
dimensions), and knowledge acquisition (3 dimensions). Furthermore, the scale for environmental
dynamism was adapted from the work of Nandakumar et al., (2010). Their research was focused on
the evaluation of the business strategy on the corporate performance, and while they were conducting
such analysis, they evaluated the impact of the external environment on the business strategy. ED was
measured using 5 dimensions which were proposed by Ghobadian and O'Regan (2010).

135
Aziz & Farooq IJMRES 13(4) 2023, 127-151

The fourth variable of this research project was organizational ambidexterity. It was used as an
independent and dependent variable as well as the mediator in the research model. The scale for this
variable was obtained from the research of Lubatkin et al., (2006). They measured two dimensions of
organizational ambidexterity, which were exploratory orientation and exploitative orientation. Both
had six dimensions. The last variable of this research was organizational climate. It was used as a
moderator in the research framework. The scale for this variable was adapted from the research of
Hunter et al., (2007). Their scale had four dimensions. Section two of the questionnaire dealt with the
general profile of the respondents and their banks. The questionnaire was pre-tested on four people.
The population for this research included all commercial banks of Pakistan. Given the time, access,
and financial constraints, it was not possible for the researcher to access bank branches from all the
provinces of Pakistan. So, the researcher decided to collect data from banks of the Province of Punjab
(accessible population). The accessible population was selected based on two factors. The first factor
was the size of the actual population that can be covered by collecting data from Punjab. The second
factor was the efficiency with which data was collected. According to the State Bank of Pakistan
(2021), as of June 2020, there are 14,701 bank branches in Pakistan. The distribution of bank branches
is given below in table 1.
Table 1: Number of Bank Branches and Area of Provinces
Territory Bank Branches Percentage Area in Mile2 Proportion in Mile2
Punjab 7772 52.87% 79284 22.59%
Sindh 3530 24.01% 54407 15.50%
KPK 1548 10.53% 39282 11.19%
GB 138 0.94% 28174 8.03%
ICT 554 3.77% 84.94 0.02%
Balochistan 586 3.99% 134051 38.19%
AJK 494 3.36% 5134 1.46%
FATA 79 0.54% 10571 3.01%
14701 100.00% 350987.9 100.00%

Punjab was selected as it had a large cluster of banks. By targeting the province of Punjab, the
researcher targeted around 55% of the total bank branches in Pakistan. Overall, the geographical area
of Punjab was around 25.7 % of the total area of Pakistan. So, it is asserted that using Punjab as an
accessible population was a good choice as it not only had good population representation but was
also cost-efficient. Data was collected from Faisalabad, Gujranwala, Jaranwala, Khanewal, Lahore,
Multan, Sargodha, Sialkot, Vehari and Wazirabad.

136
Aziz & Farooq IJMRES 13(4) 2023, 127-151

In the next step, the sample size was selected using the following formula. Williams (2020) gave a
formula for sample size calculation.

For Punjab, the calculation of sample size was carried out (Z = 1.96, p = 0.5, and N = 7,772 branches),
and the calculated sample was 367 branches. For applying simple random sampling, the researcher
used the balloting method on a list of bank branches, which was available on the website of the State
Bank of Pakistan (last updated June 2020), and selected bank branches. The researcher obtained phone
numbers of selected branches and requested branch managers to participate in the research.
Once the data was collected, it was screened to check the missing values and other discrepancies. For
example, upon evaluation, the researcher learned that a few questionnaires were filled hastily.
Moreover, some respondents skipped a significant number of questions. Finally, the researcher had
383 usable surveys from Pakistan. The researcher used confirmatory factor analysis (CFA) using
principle component analysis to evaluate the structure of the constructs. Figure 2, given below,
presents the confirmatory factor analysis results for Pakistan. CFA was carried out to reduce the
number of observed variables into latent factors such that these latent factors were more parsimonious.
CFA helps researchers in testing hypothesized relations between observed variables and their
underlying latent constructs. Moreover, using SMART-PLS, the researcher applied structural
equational modeling to analyze structural relationships between measured and latent variables. The
partial least square method was used to compute outer and inner models. It is better than regression
analysis as it presents direct and indirect impacts. Moreover, compared to covariance-based analysis,
PLS is more robust, valid, and trustworthy.

RESULT AND DISCUSSION

This section will present the findings and discussion of the research. The targeted population
was selected branches of banks from Punjab, and the unit of analysis was bank branches, which bank
managers represented. The analysis of the collected data revealed that the findings are based on 383
responses from branches of Pakistani banks. The data was obtained from both traditional and Islamic
banks. Around 55% of banks from which data was collected had over 100 branches. Likewise, around
73% of bank branches from whom data was collected had between 11-20 employees.
Descriptive Statistics of the Study Variables
There were five constructs in this research. Where LoFI was the dependent variable of the research
project, KM, OC, OAMB, and ED were the independent variables, moderators, and mediators (see
Figure 1). Using the dimensions of each construct, the researcher computed composite variables of
KM, OC, OAMB, ED, and LoFI. Table 2 presents descriptive statistics of the research model.

137
Aziz & Farooq IJMRES 13(4) 2023, 127-151

Table 2: Descriptive Statistics

Variables N Minimum Maximum Mean Std. Deviation
KMC 383 1.00 4.75 3.8055 .56257
OCC 383 1.50 4.79 3.6841 .62728
OAMBC 383 1.82 5.00 3.8001 .65746
LOFIC 383 2.13 4.87 3.6968 .55113
EDC 383 1.60 5.00 3.9863 .67551
Valid N (listwise) 383

The. mean values of KM, OC, OAMB, ED, and LoFI were between 3.6841 to 3.9863. The lowest
level of composite mean was related to 3.6841, whereas the highest value was environmental
dynamism, which was 3.9863.
Results of Confirmatory Factor Analysis (CFA)
Findings of confirmatory factor analysis are given below.

Figure 2 Confirmatory Factor Analysis – Pakistan

(Source: Author generated)

The confirmatory factor analysis results showed that out of 62 dimensions, 47 dimensions were
retained, such that ten dimensions were retained for the level of financial innovation and 15 dimensions
were retained for knowledge management. Likewise, five dimensions were retained for environmental
dynamism, and nine dimensions were retained for organizational ambidexterity. For organizational
climate, eight dimensions were retained.

138
Aziz & Farooq IJMRES 13(4) 2023, 127-151

Model Evaluation
After evaluating the constructs' structure using confirmatory factor analysis, the researcher is now
presenting measurement and structural models.
Measurement Model
The measurement model is related to the evaluation of construct validity, which will be analyzed
through the evaluation of content, convergent, and discriminant validity.
Table 3: Convergent Validity (Pakistan)
2nd Order
1st Order Constructs Construct Items Loadings Alpha CR AVE
Banking Process
Innovation BPI1 0.853 0.624 0.798 0.571
BPI2 0.652
BPI4 0.749
Banking
Products/Services
Innovation BPSI1 0.844 0.897 0.928 0.765
BPSI2 0.912
BPSI3 0.88
BPSI4 0.861
Banking Administrative
Procedures and System
Innovation BDPSI1 0.847 0.756 0.86 0.673
BDPSI2 0.847
BDPSI4 0.764
Level of
Financial
Innovation BPI 0.705 0.799 0.829 0.62
BPSI 0.903
BDPSI 0.74
Organizational Climate OC2 0.782 OC 0.868 0.897
OC3 0.767
OC4 0.689
OC6 0.732
OC7 0.733
OC9 0.607
OC11 0.734
OC12 0.717
Exploratory Orientation ERO1 0.916 0.923 0.942 0.767
ERO2 0.93
ERO3 0.883
ERO4 0.779
ERO5 0.862
Exploitative Orientation ETO2 0.873 0.869 0.913 0.726

139
Aziz & Farooq IJMRES 13(4) 2023, 127-151

ETO3 0.694
ETO4 0.902
ETO5 0.92

Organizational
Ambidexterity ERO 0.905 0.836 0.869 0.768
ETO 0.8467
Environmental
Dynamism ED1 0.779 0.679 0.794 0.442
ED2 0.733
ED3 0.721
ED4 0.57
ED5 0.47

Information Organization
and Knowledge Sharing IOKS2 0.827 0.905 0.934 0.78
IOKS3 0.909
IOKS4 0.919
IOKS5 0.875
Knowledge Creation KC1 0.821 0.869 0.911 0.718
KC2 0.863
KC3 0.823
KC4 0.881
Knowledge Storage KS1 0.853 0.884 0.92 0.742
KS2 0.855
KS3 0.869
KS4 0.868
Knowledge Acquisition KA1 0.891 0.883 0.928 0.81
KA2 0.926
KA3 0.882
Knowledge
Management IOKS 0.861 0.874 0.9 0.693
KA 0.755
KC 0.859
KS 0.851

Table 3 presented loadings values, Cronbach’s alpha, composite reliability, and average variance. All
values were according to the needed values, so it is asserted that findings related to Pakistan have
sufficient reliability and validity.
Next are Table 4 and Table 5, which present the values of HTMT ratios for 1st order and 2nd order
constructs for Pakistan.

140
Aziz & Farooq IJMRES 13(4) 2023, 127-151

Table 4: HTMT Ratio - 1st Order Constructs – (Pakistan)

Constructs BDPSI BPI BPSI ED ERO ETO IOKS KA KC KS OC
BDPSI
BPI 0.556
BPSI 0.572 0.613
ED 0.235 0.283 0.255
ERO 0.499 0.578 0.808 0.293
ETO 0.672 0.702 0.715 0.225 0.596
IOKS 0.366 0.352 0.523 0.257 0.471 0.35
KA 0.532 0.518 0.519 0.188 0.432 0.495 0.556
KC 0.42 0.55 0.517 0.187 0.459 0.472 0.796 0.597
KS 0.579 0.494 0.575 0.242 0.574 0.587 0.681 0.679 0.683
OC 0.73 0.836 0.684 0.216 0.551 0.878 0.419 0.641 0.566 0.597

Table 5: HTMT Ratio - 2nd Order Constructs - (Pakistan)

Constructs ED KM LFI OA
ED
KM 0.257
LFI 0.306 0.697
OA 0.299 0.636 0.857

Table 4 and Table 5 present values of HTMT ratios, which can be used to evaluate the discriminant
validity of different variables for Pakistan. Values of the HTMT ratio were according to the desired
level (less than 0.9), so it is asserted that findings have high discriminant validity, so it is plausible to
proceed further with analysis. The findings of the measurement model related to this study assert that
the project has significant reliability and validity. Now, the next step is to evaluate the structural model.
Structural Model
The researcher applied PLS-SEM and developed a structural model to evaluate the hypothesized
relationship between variables. The impact of exogenous variables will be shown through the values
of standardized betas. In line with the recommendations of Hair et al., (2017), the findings' significance
level was set at p < 0.1. Figure 3 presents the findings of PLS-SEM.

141
Aziz & Farooq IJMRES 13(4) 2023, 127-151

Figure 3 PLS-SEM Analysis

(Source: Author generated)

The findings of Figure 3 can be summarized in table 6.

Table 6: Main Findings of PLS-SEM
H Relationships Beta SD t value P value LL UL Decision
H1 KM -> OA 0.265 0.042 6.277 0 0.193 0.334 Supported
H2 KM -> LFI 0.222 0.038 5.891 0 0.164 0.287 Supported
H3 OA -> LFI 0.688 0.031 22.37 0 0.635 0.734 Supported
H4 KM -> OA -> LFI 0.182 0.028 6.482 0 0.131 0.225 Supported
H5 KM*OC -> OA 0.062 0.021 2.961 0.002 0.091 0.224 Supported
H6 OA*ED -> LFI 0.038 0.028 1.34 0.09 0.007 0.085 Supported

First hypothesis of this research project was to evaluate the influence of knowledge management on
organizational ambidexterity in the banking industry. The findings presented in table 6 shows that
knowledge management has a significant positive influence on the organizational ambidexterity (β =
0.265, t = 6.277, p < 0.1). So, H1 was supported. Similarly, second hypothesis of this research project
was to evaluate the influence of knowledge management on the level of financial innovation in the
banking industry. The findings presented in table 6 shows that knowledge management has a
significant positive influence on the level of financial innovation (β = 0.222, t = 5.891, p < 0.1). So,
H2 was supported. Moreover, third hypothesis of this research project was to evaluate the influence
of organizational ambidexterity on the level of financial innovation in the banking industry. It can be
seen in table 6 that organizational ambidexterity has a significant positive influence on the level of
financial innovation (β = 0.688, t = 22.370, p < 0.1). So, H3 was supported.

142
Aziz & Farooq IJMRES 13(4) 2023, 127-151

Fourth research hypothesis of this research project was to evaluate the mediating relationship between
knowledge management and the level of financial innovation in the banking industry. Based on
findings presented in table 6 that organizational ambidexterity significantly moderates positive
relationship between knowledge management and level of financial innovation (β = 0.182, t = 6.482,
p < 0.1). So, H4 is supported. Fifth research hypothesis of this research project was to evaluate the
moderating impact of organizational climate between relationship of knowledge management and
organizational ambidexterity in the banking industry. Referring to table 6, organizational climate
significantly moderates relationship of knowledge management and organizational ambidexterity (β =
0.062, t = 2.961, p < 0.1). So, H5 was supported. Lastly, sixth research hypothesis of this research
project was to evaluate the moderating impact of environmental dynamism between relationship of
organizational ambidexterity and level of financial innovation in the banking industry. The values
presented in table 6 show that environmental dynamism significantly and positively moderates
relationship of organizational ambidexterity and level of financial innovation in the banking industry
(β = 0.038, t = 1.340, p < 0.1) So, H6 was supported.
Discussion on Findings of the Research
Regarding hypothesis 1, the researcher asserts that KM is crucial in promoting OAMB in the banking
sector by supporting exploration and exploitation activities within the organization. By effectively
capturing, storing, and disseminating knowledge throughout the organization, KM enables banks to
pursue new opportunities and innovative ideas (exploration) while improving their current processes
and practices (exploitation). It helps banks balance their focus on short-term operational efficiency
and long-term growth and adaptation. Additionally, KM can facilitate cross-functional collaboration,
which is essential for promoting ambidexterity in the banking sector. By enabling the sharing of
knowledge and ideas across different departments and teams within a bank, knowledge management
can help to break down silos and foster a culture of innovation and risk-taking. It, in turn, can drive
financial innovation as banks explore new products, services, and business models that can help them
remain competitive and meet changing customer needs.
Furthermore, through KM, banks get information about the current and upcoming market trends,
which may enable them to adjust their internal environment as per the need of changes that are taking
place in the external market, including regulatory changes. The results of data analysis supported the
research of Herstad et al., (2014) and March (1991). Additionally, the findings of this research project
presented the case of Pakistan (a developing country), and it should be regarded as a contextual
contribution.
Regarding hypothesis 2, research found that KM positively and significantly impacts banks’ LoFI. It
means that if banks focus on creating and storing knowledge, then knowledge will be accessible to
more bank employees. Using this knowledge, bank employees may develop new banking processes
and products. For instance, through KM practices, banks may get information about changes in
financial regulations. Banks may change existing processes and products/services or develop new ones
that comply with the new provisions. It will enhance the bank’s competitiveness and banks may
develop strong and congenial relationships.
143
Aziz & Farooq IJMRES 13(4) 2023, 127-151

Regarding hypothesis 3, findings of this research highlighted that OAMB has a positive and significant
impact on banks’ LoFI. It can be deduced from this that if banks may concentrate on improving their
productivity and efficiency while embracing new things, then there will be high chances of financial
innovation. Consequently, banks may develop new systems, business models, financial products, and
services. Researcher asserts that for fostering OAMB, there is a need for develop cross-functional
linkages among different teams, functions and levels as financial innovation needs ideas and
knowledge sharing. It will ensure that because of OAMB, barriers related to knowledge sharing will
be eliminated and consequently, LoFi will be enhanced. Moreover, researcher asserts that findings
support research of Gibson and Birkinshaw (2004) and Jansen et al., (2012).
Concerning hypothesis 4, the research found that OAMB positively mediates the relationship between
knowledge management and a bank's level of financial innovation. So, by exploring and exploiting,
banks may become efficient and innovative. It may become possible through developing an
organizational climate in which experimentation and risk-taking are facilitated. Banks may create and
share knowledge with their employees by facilitating KM, enhancing new processes and product
development. Consequently, customers' needs and wants will be met, and they will have high
satisfaction. Moreover, ambidexterity can facilitate cross-functional collaboration, which is critical for
innovation. By enabling different departments and teams within a bank to work together,
ambidexterity can foster the sharing of ideas and knowledge, leading to a more comprehensive and
innovative approach to financial services. It can further enhance the impact of knowledge management
on a firm's level of innovation. The findings of this research project extend the literature in KM,
OAMB, and LoFI. It was a gap in the literature, and this research presented insights in this area.
Regarding hypothesis 5, the researcher asserts OC positively moderates the relationship between KM
and OAMB. An OC that values and supports continuous learning, knowledge sharing, and innovation
can foster the implementation of effective knowledge management practices and promote
organizational ambidexterity. In such a climate, KM initiatives are more likely to be embraced and
effectively integrated into the organization. It leads to increased innovation as employees access
broader knowledge and insights. The ability to easily share information and knowledge across
departments and teams can also facilitate cross-functional collaboration, which is essential for
promoting ambidexterity by enabling sharing of knowledge and ideas across different departments
and teams. Moreover, a positive OC can also create an environment that supports risk-taking and
experimentation, enabling employees to pursue new opportunities and innovative ideas. It can further
drive organizational ambidexterity by enabling organizations to balance their focus on short-term
operational efficiency and long-term growth and adaptation. The findings of this research project
extend the literature in KM, OAMB, and LoFI. It was a gap in the literature, and this research presented
insights in this area. Figure 4, given below, presents a slop analysis related to hypothesis 5. It shows
that OC positively moderates the relationship between KM and OAMB at both low and high levels.

144
Aziz & Farooq IJMRES 13(4) 2023, 127-151

Figure 4 Slope Analysis of OC, OAMB and KM

(Source: Author generated)

With reference to hypothesis 6, the researcher asserts that changes in the external environment can
positively moderate the relationship between OAMB and the LoFI. A dynamic and rapidly changing
external environment can drive the need for organizations to be more adaptive and innovative to
remain competitive. For example, changes in consumer preferences, new technologies, and shifting
regulations can create new opportunities and challenges for financial institutions. In response,
organizations that are capable of quickly adapting their products, services, and business models (i.e.,
those with high levels of ambidexterity) are more likely to remain competitive and innovate in the face
of change. Additionally, changes in the external environment can also drive the need for cross-
functional collaboration and knowledge sharing within organizations. This can further promote
organizational ambidexterity as different departments and teams within a financial institution work
together to develop innovative solutions and respond to changes in the market. The findings of this
research project extend the literature in KM, OAMB, and LoFI. This was a gap in the literature, and
this research presented insights in this area. Figure 5, given below, presents a slop analysis related to
hypothesis 5. It shows that ED positively moderates the relationship between OAMB and LoFI at both
low and high levels.

145
Aziz & Farooq IJMRES 13(4) 2023, 127-151

Figure 5 Slope Analysis of ED, OAMB and LoFI

(Source: Author generated)

CONCLUSION AND POLICY IMPLICATION

The impact of innovation on business products and processes is far-reaching. Firms have been
using research and development to develop new business models that will help them offer better
products and services. These products and services offer better value to the customers and may lead
to additional value for the customers. Innovative products and services help businesses develop
sustainable competitive advantage in the markets where they operate and grow. Innovation may exist
at different levels. It may exist at the level of an individual or a team. It may also exist at the level of
a firm or industry. The banking industry plays a pivotal role in a country's economic growth and
development. There is a need to evaluate the level of financial innovation in the banking sector as well
as analyze the factors that influence the level determinants of financial innovation in the banking
industry. There were a number of factors that may influence LoFI in the banking industry. These
factors include OAMB and KM. Moreover, several factors may serve as moderators and mediators of
the relationship among LoFI and its determinants. So, the researcher planned a research study to
develop a framework for fostering innovation by evaluating the relationship among KM, OAMB, and
LoFI in the banking sector. The philosophy of this research project was pragmatism, and the selected
research approach was abductive reasoning. The research strategy was a survey carried out among
Pakistan's commercial banks. The researcher conducted a mixed-method study and obtained cross-
sectional data. The data was obtained using both interviews and questionnaires. The survey was carried
out in Faisalabad, Gujranwala, Jaranwala, Khanewal, Lahore, Multan, Sargodha, Sialkot, Vehari and
Wazirabad.

146
Aziz & Farooq IJMRES 13(4) 2023, 127-151

Based on the findings, the researcher asserts that knowledge management significantly influences the
bank’s ambidexterity in Pakistani banks. So, if Pakistani banks want to increase their level of OAMB,
they should adopt a system through which new knowledge is created, stored, and disseminated to
organizational members. Banks should develop a centralized KM system and support their employees
in communicating and collaborating. Furthermore, the researcher found that an increase in Pakistani
bank’s OAMB increased LoFI. Based on this, the researcher asserts that banks should develop an
organizational system and culture through which exploration and exploitation may take place. In
addition to these, findings also revealed that in Pakistani banks, organizational ambidexterity has a
mediating impact on Pakistani banks’ relationship of KM-related practices with the level of financial
innovation in Pakistan’s banking sector. Based on it, the researcher argued that banks should enhance
the level of OAMB, as by doing so, banks may develop a system through which banks may create
more knowledge that can be used for exploration and exploitation. Moreover, the results of data
analysis also indicated that in the banking sector, organizational climate moderates the positive
relationship between Pakistani banks’ level of knowledge management and Pakistani bank’s
ambidexterity level. OC may serve as an environment in which innovation, continuous learning, and
knowledge sharing are valued and thus created. Further to this, findings also confirmed that ED
moderated the relationship between OAMB and the firm's LoFI. A more competitive and dynamic
environment would catalyze the relationship between OAMB, requiring more innovation and
adaptation. In a highly dynamic environment, a firm's ability to be ambidextrous may be more critical
for its innovation performance. In a less dynamic environment, the relationship between ambidexterity
and innovation may be weaker.
Based on the findings of the research, it is suggested that banks should enhance KM practices. They
should also support organizational ambidexterity-related endeavors and strive to increase the level of
OAMB. It is also suggested that banks should develop an organizational climate that may foster
learning and sharing. Banks should also critically evaluate the external environment. The findings of
this research contributed to the theory in different ways. For instance, this researcher confirmed the
meaningful impact of the ED (condition) on the relationship between OAMB and LoFI. Likewise, this
research project confirmed the impact of the OC (condition) on the relationship between KM and
OAMB. In addition to this, this research project also confirmed that OAMB significantly mediates the
relationship between KM and LoFI.
There are several limitations of this research. For instance, the findings are based on a sample. When
it comes to the generalization of research findings, the use of data from the sample has limited value.
To overcome these limitations, a larger sample was selected. Likewise, the selection of province and
subsequent selection of bank branches was carried out based on simple random sampling. There are
chances that the researcher does not cover some important branches. Because of COVID-19,
researchers had limited opportunities to visit bank branches, interact, and observe banking operations.

147
Aziz & Farooq IJMRES 13(4) 2023, 127-151

REFERENCES
Adeyeye, A. D., Jegede, O. O., Oluwadare, A. J., & Aremu, F. S. (2016). Micro-level determinants of
innovation: analysis of the Nigerian manufacturing sector. Innovation and Development, 6(1),
1-14.
Ahn, J. M., Kim, D., & Moon, S. (2017). Determinants of innovation collaboration selection: a
comparative analysis of Korea and Germany. Innovation, 19(2), 125-145.
Argote, L., & Ingram, P. (2000). Knowledge transfer: a basis for competitive advantage in firms.
Organizational Behavior and Human Decision Processes, 82(1), 150-169.
Augier, M., & Vendelo, M. (1999). Networks, cognition and management of tacit knowledge. Journal
of Knowledge Management, 3(4), 252-261.
Barclay, R. O., & Murray, P. C. (1997). What is knowledge management. Knowledge praxis, 19.
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of
management, 17(1), 99-120.
Brem, A. (2017). Creativity and routine: conceptual considerations on managing organisational
ambidexterity in entrepreneurial ventures. International Journal of Entrepreneurship and
Innovation Management, 21(3), 261-273.
Bresciani, S., Ferraris, A., & Del Giudice, M. (2017). The management of organizational
ambidexterity through alliances in a new context of analysis: internet of things (IoT) smart city
projects. Technological Forecasting and Social Change, 136(1), 331-338.
Castro, G., Lopez‐Saez, P., Delgado‐Verde, M., Andreeva, T., & Kianto, A. (2011). Knowledge
processes, knowledge‐intensity and innovation: a moderated mediation analysis. Journal of
Knowledge Management. 15(6), 1016-1034
Chen, C., & Huang, J. (2007). How organizational climate and structure affect knowledge
management—The social interaction perspective. International Journal of Information
Management, 27(2), 104-118.
Chen, Z., Li, Y., Wu, Y., & Luo, J. (2017). The transition from traditional banking to mobile internet
finance: an organizational innovation perspective-a comparative study of Citibank and
ICBC. Financial Innovation, 3(1), 1-16.
Collins, C. J. (2021). Expanding the resource based view model of strategic human resource
management. The International Journal of Human Resource Management, 32(2), 331-358.
Cuthbertson, R. W., & Furseth, P. I. (2022). Digital services and competitive advantage: Strengthening
the links between RBV, KBV, and innovation. Journal of Business Research, 152(1), 168-176.
Davenport, T., & Prusak, L. (1998). Working knowledge: how organizations manage what they know.
New York, USA: Harvard Business Press.
Ehrhart, M., & Raver, J. (2014). The effects of organizational climate and culture on productive and
counterproductive behavior. The Oxford Handbook of Organizational Climate and Culture,
37(2)153-176.
Gassmann, O., & Keupp, M. M. (2007). The competitive advantage of early and rapidly
internationalising SMEs in the biotechnology industry: A knowledge-based view. Journal of
World Business, 42(3), 350-366.
148
Aziz & Farooq IJMRES 13(4) 2023, 127-151

George, G. (2015). A study on the relationship between psychological climate, employee engagement
and organizational citizenship Behavior, HR Journal, 6(2), 1-17.
Gibson, C., & Birkinshaw, J. (2004). The antecedents, consequences, and mediating role of
organizational ambidexterity. Academy of Management Journal, 47(2), 209-226.
Gold, A., & Malhotra, A. (2001). Knowledge management: An organizational capabilities perspective.
Journal of Management Information Systems, 18(1), 185-214.
Grant, R. M. (1996). Toward a knowledge‐based theory of the firm. Strategic Management Journal,
17(2), 109-122.
Hair Jr, J. F., Matthews, L. M., Matthews, R. L., & Sarstedt, M. (2017). PLS-SEM or CB-SEM:
updated guidelines on which method to use. International Journal of Multivariate Data
Analysis, 1(2), 107-123.
He, Z., & Wong, P. (2004). Exploration vs. exploitation: An empirical test of the ambidexterity
hypothesis. Organization Science, 15(4), 481-494.
Herstad, S., Aslesen, H., & Ebersberger, B. (2014). On industrial knowledge bases, commercial
opportunities and global innovation network linkages. Research Policy, 43(3), 495-504.
Herzog, C. (2011). Strategic Tools in Dynamic Environments: A Framework: Verlag, Germany: GRIN
Pubs.
Huber, G. P. (2001). Transfer of knowledge in knowledge management systems: unexplored issues
and suggested studies. European Journal of Information Systems, 10(2), 72-79.
Hunter, S., Bedell, K., & Mumford, M. (2007). Climate for creativity: a quantitative review. Creativity
Research Journal, 19(1), 69-90.
Jansen, J., Simsek, Z., & Cao, Q. (2012). Ambidexterity and performance in multiunit contexts: cross‐
level moderating effects of structural and resource attributes. Strategic Management Journal,
33(11), 1286-1303.
Kollmann, T., & Stockmann, C. (2014). Filling the entrepreneurial orientation–performance gap: The
mediating effects of exploratory and exploitative innovations. Entrepreneurship Theory and
Practice, 38(5), 1001-1026.
Landry, R., Amara, N., & Doloreux, D. (2016). Knowledge-Intensive Business Services: Geography
and Innovation, New York, USA: Springer.
Lee, H., & Choi, B. (2003). Knowledge management enablers, processes, and organizational
performance: An integrative view and empirical examination. Journal of Management
Information Systems, 20(1), 179-228.
Lewin, K., Lippitt, R., & White, R. (1939). Patterns of aggressive behavior in experimentally created
“social climates”. The Journal of Social Psychology, 10(2), 269-299.
Li, M., Bazaei, G., & Masouleh, S. (2020). A case study to investigate the function of knowledge
management, intellectual capital on competitive advantage acquisition in an iranian
company. South Asian Journal of Marketing & Management Research, 10(4), 130-145.
Lubatkin, M., Simsek, Z., Ling, Y., & Veiga, J. (2006). Ambidexterity and performance in small-to
medium-sized firms: The pivotal role of top management team behavioral integration. Journal
of Management, 32(5), 646-672.

149
Aziz & Farooq IJMRES 13(4) 2023, 127-151

Maqsood, Z., Devkota, N., Sardar, I., & Kanwal, A. (2021). Determinants of relationship marketing
that improves customer satisfaction in banking industry of Pakistan. The Journal of Economic
Concern, 12(1), 75-90.
March, J. (1991). Exploration and exploitation in organizational learning. Organization Science, 2(1),
71-87.
Ministry of Finance. (2023, January 12). Overview of the economy - Ministry of Finance. Retrieved
16 April 2022, from https://www.finance.gov.pk/survey/chapters_21/Overview.pdf
Muthinja, M. M., & Chipeta, C. (2018). What drives financial innovations in Kenya’s commercial
banks? An empirical study on firm and macro-level drivers of branchless banking. Journal of
African Business, 19(3), 385-408.
Nayak, R. (2021). Banking regulations: do they matter for performance?. Journal of Banking
Regulation, 22(4), 261-274.
Ndubisi, N., Capel, C., & Ndubisi, G. (2015). Innovation strategy and performance of international
technology services ventures. Journal of Service Management, 26(4), 548-564
Nonaka, I. (1991). The knowledge-creating company. In The economic impact of knowledge (pp. 175-
187). Routledge.
Nonaka, I. (1994). A dynamic theory of organizational knowledge creation. Organization Science,
5(1), 14-37.
Nonaka, I., & Takeuchi, H. (1995). The knowledge-creating company: How Japanese Companies
Create the Dynamics of Innovation. London, England: Oxford University Press.
Park, Y., Pavlou, P. A., & Saraf, N. (2020). Configurations for achieving organizational ambidexterity
with digitization. Information Systems Research, 31(4), 110-125.
Penrose, E. T. (1959). The Theory of Growth of the Firm. Oxford: Blackwell.
Porter, M. E. (2000). Location, competition, and economic development: Local clusters in a global
economy. Economic Development Quarterly, 14(1), 15-34.
Porter, M. E. (2008). Competitive advantage: Creating and sustaining superior performance. New
York, USA: Simon and Schuster.
Qamruzzaman, M., & Jianguo, W. (2018). Investigation of the asymmetric relationship between
financial innovation, banking sector development, and economic growth. Quantative.
Financial Economics, 2(1), 952-980.
Qamruzzaman, M., Jianguo, W., Jahan, S., & Yingjun, Z. (2021). Financial innovation, human capital
development, and economic growth of selected South Asian countries: An application of
ARDL approach. International Journal of Finance & Economics, 26(3), 4032-4053.
Raisch, S., & Birkinshaw, J. (2008). Organizational ambidexterity: antecedents, outcomes, and
moderators. Journal of Management, 34(3), 375-409.
Sabherwal, R., & Becerra‐Fernandez, I. (2003). An empirical study of the effect of knowledge
management processes at individual, group, and organizational levels. Decision Sciences,
34(2), 225-260.
Shahid, A., Saeed, H., & Tirmizi, S. M. A (2015). Economic development and banking sector growth
in Pakistan. Journal of Sustainable Finance & Investment, 5(3), 121-135.

150
Aziz & Farooq IJMRES 13(4) 2023, 127-151

Sokol, A., Gozdek, A., Figurska, I., & Blaskova, M. (2015). Organizational climate of higher
education institutions and its implications for the development of creativity. Procedia-Social
and Behavioral Sciences, 182(1), 279-288.
State Bank of Pakistan. (2021). Bank Schedule - State Bank of Pakistan. Retrieved 25 February 2021,
from https://www.sbp.org.pk/publications/schedule_banks/jun-2020.htm
Subramaniam, M., & Youndt, M. A. (2005). The influence of intellectual capital on the types of
innovative capabilities. Academy of Management Journal, 48(3), 450-463.
Tamer, S., Calantone, R. J., & Zhao, Y. (2003). Tacit knowledge transfer and firm innovation
capability. Journal of Business & Industrial Marketing, 18(1), 6-21.
Teece, D., & Leih, S. (2016). Uncertainty, innovation, and dynamic capabilities: An
introduction. California management review, 58(4), 5-12.
Tushman, M. L., & Anderson, P. (1986). Technological discontinuities and organizational
environments. Administrative Science Quarterly, 31(3) 439-465.
Venugopal, A., Krishnan, T. N., Upadhyayula, R. S., & Kumar, M. (2020). Finding the
microfoundations of organizational ambidexterity-Demystifying the role of top management
behavioural integration. Journal of Business Research, 106(1), 1-11.
Wheelen, T. L., Hunger, J. D., Hoffman, A. N., & Bamford, C. E. (2015). Strategic Management and
Business Policy: Globalization, Innovation and Sustainability. New York, USA: Pearson
Higher Ed.
Zack, M., McKeen, J., & Singh, S. (2009). Knowledge management and organizational performance:
an exploratory analysis. Journal of Knowledge Management, 13(6), 392-409.

151