| Summary: | More companies are using design to gain an advantage in today’s highly competitive business market. However, there are few empirical studies on its innovation impact on organizational performance. The purpose of this study is to clarify the relationship between the knowledge resources of companies, moderated by the degree of design activities, and innovation types. Based on the sensemaking organizational model, this study examines how companies’ knowledge resources mediate design activities and influence innovation. This study introduces design activities as a moderator to link the corporate knowledge resources’ (human, social, and organizational knowledge) impact to incremental and radical innovation. The sensemaking organizational model is extended through a human-centered lens. Analysis of 151 companies showed that human, social, and organizational knowledge had a selective impact on incremental and radical innovation. Interestingly, the findings supported the hypothesis that organizational knowledge enhances radical innovation through design activities. This paper bridges the gap between corporate knowledge resources and innovation moderated by design activities enhancing the sensemaking organizational model. It points to the need for design activities for creative problem-setting and enabling the discovery of problems found during the research phase through innovation. Long-term corporate activities increase knowledge resources and reduce the potential for radical innovation. Mechanisms that promote new connections between organizations and leverage corporate knowledge resources benefit radical innovation. This explains the managemental impact on the various knowledge resources in innovation and the role of design activities.
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