The role of strategic flexibility and potential absorptive capacity Business model innovation

The purpose of the extant study was to examine the mediating role of strategic flexibility in the relationship between potential absorptive capacity and business model innovation. This was applied research in terms of objective, a descriptive study in terms of type, and a survey in terms of method. The statistical population of the study comprised auto parts manufacturing companies and assemblies of Iran Khodro Company. According to published statistics, about 500 companies supply auto parts and assemblies required for Iran Khodro Co. Morgan & Krejcie table was used in this research to calculate the sample size (n=229). A convenience random sampling was used due to limited society. Respondents who answered the items about strategic flexibility and potential absorptive capacity comprised strategy managers, and engineering managers of the studied company answered the items about business innovation. The standard questionnaire designed by Miroshnichenko et al. (2020) was used on a 7-point Likert scale to gather data. Data analysis was done using structural equation modeling (SEM) of partial least squares (PLS). The results indicated a positive and significant relationship between potential absorptive capacity (PAC) and business model innovation (BMI). There was also a positive and significant association between PAC strategic flexibility index (SFI). On the other hand, there was a positive and significant relationship between SFI and BMI. Furthermore, SFI mediated the relationship between PAC and BMI.