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The purpose of this study is to investigate the relationship between the absorptive capacity (AC) of a firm and project success (PS), with particular attention to the mediating role of customer knowledge management capability (CKMC) and the moderating role of environmental complexity (EC). By using data collected from Turkish SMEs across different sectors, the study seeks to understand how AC impacts project success, how CKMC mediates this relationship, and how EC moderates the link between AC and CKMC. The research contributes to both theory and practice by providing insights into these relationships and suggesting future research directions.

This study focuses on Small and Medium-sized Enterprises (SMEs) in Turkey, specifically within the cities of Istanbul, Ankara, Izmir, and Konya. To gather data, the researchers utilized a non-probabilistic convenience sampling method and distributed self-administered surveys to a selected pool of 918 respondents including shift supervisors, project managers, and team members within these SMEs. The surveys were translated to Turkish to avoid language issues. Out of the surveys distributed, 401 valid responses were collected, resulting in a response rate of 43.68%.

The main findings of the study indicate that a firm’s absorptive capacity (AC) positively impacts project success and customer knowledge management capability (CKMC). Furthermore, CKMC plays a mediating role, positively influencing project success. Additionally, the study reveals the moderating effect of environmental complexity (EC) on the relationship between AC and CKMC, suggesting that as EC becomes more complex, it strengthens the link between AC and CKMC. Moreover, CKMC was found to mediate the moderating effect of EC on the relationship between AC and project success, emphasizing the significance of environmental complexity in this interaction.

This study’s limitations stem from its cross-sectional approach, which limits the ability to establish causal relationships between the constructs of absorptive capacity (AC), customer knowledge management capability (CKMC), and project success. It does not examine other potential mediators, such as customer relationship capability and innovation capability. Furthermore, the existing literature on this topic is scarce, suggesting a need for further research, particularly on constructs like team skills for managing CKMC. There is also an unexplored area around the effects of different forms of complexity, such as resource and technical complexity. Finally, further research is needed to understand how SMEs, which often face resource constraints, leverage AC in different functional domains for successful new product development.

The study’s findings have significant practical implications for SMEs, highlighting the importance of absorptive capacity (AC) and customer knowledge management capability (CKMC) in promoting project success, particularly under conditions of environmental complexity. As businesses navigate uncertain environments, external knowledge acquisition becomes crucial for improvement and innovation. Efficient transformation of this knowledge can enhance project success rates. Thus, firms should cultivate a proactive, innovative, and risk-taking climate. Also, firms should regularly assess their AC and CKMC in the face of shifting stakeholder expectations and market competition. The ability to detect, integrate, and apply external knowledge in product and service development can significantly enhance project success rates.

This study’s originality lies in its exploration of the complex interplay between a firm’s absorptive capacity (AC), customer knowledge management capability (CKMC), environmental complexity (EC), and project success (PS). By examining Turkish SMEs across various sectors, the study uncovers the mediating role of CKMC and the moderating role of EC in the relationship between AC and PS. Furthermore, it reveals how the effect of AC on PS through CKMC strengthens with increasing environmental complexity. These findings offer fresh insights into the complexity theory and the factors influencing project success, providing a unique perspective for both academics and practitioners, with practical implications for managing SMEs in complex environments.