Innovation and Technology for Neutralizing Organizational Inertia: A Structural Equation Modeling (SEM) Approach

In today’s competitive business environment, particularly for small and medium-sized enterprises (SMEs) in the information and communication technology (ICT) sector, survival hinges on the ability to innovate. Business Model Innovation (BMI) plays a pivotal role in driving competitiveness and enhancing performance. However, many organizations face organizational inertia, which can impede their ability to adapt to environmental changes, limiting their capacity to evolve. Organizational competencies and capabilities may play a crucial role in how businesses respond to these challenges. This study investigates the relationship between organizational inertia and BMI, focusing on the moderating effects of open innovation competencies and Information Technology (IT) ambidexterity. The research targets software companies in Tehran Province, Iran, within the ICT industry. The findings reveal that organizational inertia has a significant negative effect on BMI, highlighting the need to address inertia to foster business model innovation. Additionally, open innovation competencies serve as a key moderator in this relationship, suggesting the importance of developing these skills within organizations. Conversely, the moderating effect of IT ambidexterity was found to be insignificant.