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This work aims to determine how innovation orientation (IO), built from six dimensions (strategic, structural-process, human resources, technological, organizational culture and market) affects organizational performance (OP) with the inclusion of knowledge management (KM) as a mediator and technological readiness (TR) as a moderator in the model.

Questionnaires completed by business service companies were analyzed using multiple regression analysis (path analysis), including the mediating variable (KM) and moderating variable (TR). The construct was validated with positive outcomes.

Of the eight hypotheses, six were supported. The study results show that strategic, technological, organizational culture and market dimensions of IO positively influence KM. On the other hand, KM plays an important role as a mediator in supporting the relationship between the four dimensions of IO and performance. Moreover, TR, as a moderator, positively affects the relationship between KM and OP.

The study is the first to explore the relationship between six dimensions of IO and KM in business service sector. Furthermore, this study provides evidence that TR can be beneficial for companies with respect to effective KM, which leads to the better performance.