The impact of strategic agility on organizational performance: the mediating role of market orientation and innovation capabilities in emerging industrial sector

Strategic agility (hereinafter SA) is a continuous development activity and a critical component of organizational performance (hereinafter OP), and the role of market orientation (hereinafter MO) and innovation capabilities (hereinafter IC) are central to achieving organizational objectives. This study was conducted to examine the effect of SA on OP and to determine the extent to which MO and IC mediate the relationship between SA and OP. A quantitative approach was conducted using a cross-sectional method. 300 Managers working in various companies listed in in Saudi Arabia represented the research population. In this study, structural equation modeling (SEM) was used to test the proposed model, following a two-stage approach that entails a measurement model and a causal structural model. To test our hypotheses, we examined our measurements using IBM SPSS AMOS 29. The results revealed that neither SA nor IC have a direct effect on OP. Importantly, MO plays a key role in this dynamic relationship and therefore forges critical connections. Because of the natural tendency of IC’ outcomes, this factor was found to be insignificant in influencing OP either directly or indirectly. This study is the first empirical research to adequately employ MO and IC as mediating units of analysis in the Saudi Industrial Sector. It has established relationship patterns between these focal variables. In addition, it revealed hidden patterns that help predict performance. This research has considerable implications for R&D and marketing managers. It provides insights and predictions managers can use to guide business decisions. These findings contribute to the understanding of the importance of employing strategic MO to improve OP in the Saudi Industrial Sector.