External Stimulus and Organizational Culture in EnhancingMSME Performance Through Radical Innovation and Knowledge Sharing

This study investigates the influence of external stimulus and organizational culture on MSME performance, with radical innovation and ‎knowledge sharing serving as mediating mechanisms. Adopting a quantitative approach, data from 204 MSME owners and managers were ‎analyzed using Structural Equation Modeling (SEM) with AMOS. Both the measurement and structural models achieved acceptable fit ‎indices, indicating a satisfactory model data fit. The findings reveal that external stimulus plays a strong role in driving radical innovation ‎and knowledge sharing, and exerts a direct positive effect on MSME performance. Organizational culture is also a significant driver of ‎radical innovation and knowledge sharing, but it shows a direct negative effect on performance. Mediation analysis confirms that the primary ‎contribution of organizational culture to performance occurs indirectly through radical innovation and knowledge sharing, while external ‎stimulus also enhances performance significantly via these mediating pathways. These results underscore that radical innovation and ‎knowledge sharing are not merely passive outcomes of favorable environments or cultures but are strategic levers that determine MSMEs’ ‎adaptability and competitiveness. From a practical perspective, the study offers guidance for business actors to integrate external market ‎awareness with a collaborative, innovation-oriented organizational culture to ensure sustainable growth in highly dynamic and competitive ‎markets‎.