The effect of inter-organizational conflicts on the innovativeness of Malaysian small and medium-sized enterprises exporters: potential mediators and moderators

Purpose This study aims to investigate how the interaction amongst different types of inter-organizational conflicts influences the absorptive capacity and innovativeness of small and medium-sized enterprises in Malaysia and examines the mediating role of absorptive capacity in such relationship. Design/methodology/approach The sample comprised cross-industry small and medium-sized exporters in Malaysia’s manufacturing sector. Data were collected from 124 respondents through a survey, and the hypothesized relationships were tested using the structural model in Smart PLS 4.0 and by using a bootstrapping technique with 5,000 samples. Findings The structural model shows that the predictors explained 44 % and 45 % of the variance in absorptive capacity and innovativeness, respectively. The effect size (f²) estimates for the significant relationships ranged from low to high. Functional conflict is a critical antecedent to absorptive capacity and innovativeness, dysfunctional conflict moderates the impact of functional conflict on absorptive capacity and innovation, and absorptive capacity mediates the influence of functional conflict on export innovativeness. The inner model evaluation shows a q2 effect size of greater than zero, which reflects the predictive relevance of functional and dysfunctional conflict. Nevertheless, the small sample size limits the statistical power of the tests, especially with regards to model complexity. Originality/value To the best of the authors’ knowledge, this study is the first to investigate the effects of the interaction between functional and relational conflicts on absorptive capacity and innovativeness.