Transforming Organizational Readiness Into Green Innovation: The Crucial Roles of Green Knowledge Management and Environmental Culture

ABSTRACT Grounded in the resource‐based view and dynamic capabilities theory, this study investigates the interplay between organizational readiness (OR), green knowledge management (GKM) and environmental organizational culture (EOC) in fostering green innovation (GI). This study uses data collected from 340 respondents across 159 UAE SMEs and employs a quantitative approach using partial least squares structural equation modeling and moderated mediation analysis. The findings revealed that OR significantly influenced both radical and incremental GI. Additionally, GKM mediates the relationship between OR and both GI types. EOC was found to strengthen the positive effect of GKM on radical GI but not on incremental GI. Furthermore, the conditional indirect effects show that the mediating effect of GKM on the relationship between OR and radical GI is more pronounced when EOC is high, whereas this effect does not hold for incremental GI. These results provide critical insights for practitioners and policymakers. Organizations are encouraged to enhance readiness, implement robust GKM practices and foster a strong environmental culture to drive sustainable innovation. This study contributes to the theoretical framework of RBV and dynamic capabilities by elucidating the interconnected roles of OR, GKM and EOC in driving GI.