Title:
The Influence of Cost Leadership Strategy, Differentiation Strategy and Innovative Capability on the Organizational Performance of Indonesian Army Hospitals Mediated by the Strategy Flexibility

Authors:
Reny Damayanti B, Willy Arafah, & Kusnadi, Indonesia

Abstract:

This study analyzes the impact of cost leadership strategy, differentiation strategy, and innovative capability on the organizational performance of Indonesian National Military Hospitals (TNI Hospitals), with strategy flexibility serving as a mediating variable. Utilizing a quantitative approach, data were collected from 210 respondents across seven Type B military hospitals in Indonesia through purposive sampling. Analysis was conducted using Structural Equation Modeling (SEM) with Partial Least Squares (PLS), and the validity and reliability of the indicators were confirmed.

The findings indicate that cost leadership strategy, innovative capability, and strategy flexibility directly affect organizational performance. In contrast, the differentiation strategy does not significantly influence performance. Furthermore, the study illustrates how strategy flexibility enables TNI hospitals to effectively implement various strategies—cost leadership, differentiation, and innovation—thereby enhancing performance while maintaining their unique identity as military healthcare providers. This suggests that TNI AD hospitals can pursue these strategies without compromising the quality of care and while adhering to relevant regulations.

DOI: https://doi.org/10.51505/IJEBMR.2025.91116