Unpacking the relation between learning orientation and product innovation: Does strategic flexibility matter?

Abstract Learning orientation emphasizes the importance of learning from any experience. It is grounded on commitment to learn, shared vision, open‐mindedness, and knowledge sharing. Organizational knowledge management literature based on social complexity theory posits that learning orientation makes companies generate new knowledge through spontaneous multi-level iterations and self-organization. Challenges related to the current business environment requires companies to constantly adjust to remain competitive. Still, the mechanisms making learning-oriented companies more capable to develop innovative product have been scantly explored. Pertinent literature actually conjectures this relationship as spontaneous, directed, and unmediated. Moreover, Small and Medium Enterprises (SMEs)rarely represent the context of analysis of research on this topic. Frequently lacking resources to systematically pursue product innovation, SMEs rely on solutions deriving from the combination of internal knowledge and external sources; thus, these companies depend on learning orientation principles to remain innovative. In this vein, the research aims to understand how learning orientation allows product innovation in SMEs through the achievement of strategic flexibility. Structural equation modelling was used to analyse data from 300 British SMEs. The results demonstrate the mediating role of strategic flexibility in the relationships between learning orientation and product innovation. The importance of innovation culture also emerged.