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This research examined the effect of Yin–Yang Leadership Harmony (YYLH) on organizational capability development and business model innovation in small and medium enterprises (SMEs) based on paradox, dynamic capabilities, and upper echelons theories. Furthermore, the mediating role of strategic ambidexterity (SA) and dynamic capabilities (DC), as well as the moderating role of gender identity orientation (GIO), were investigated. Data were collected from 235 SME owners and leaders and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results showed that YYLH positively affected dynamic capabilities, directly and indirectly through strategic ambidexterity. Androgynous gender identity orientation also strengthened the relationship between YYLH and strategic ambidexterity. However, business model innovation did not show a significant direct effect on business resilience. This was because innovation did not automatically generate resilience without adequate organizational capability support. The importance of leadership was emphasized to balance conflicting demands in building adaptive capabilities in SMEs. This research contributes by broadening the understanding of the role of paradox-based leadership in capability development and innovation. Furthermore, practical implications are also offered for SME leaders to balance leadership methods with the capability development process in a dynamic environment.
Pur et al. (Fri,) studied this question.