Title:
The Effect of Transformational Leadership, Dynamic Capability and Psychological Empowerment on Organizational Performance of the Army Hospital Mediated by Competitive Advantage and Moderated by Organizational Culture

Authors:
Yanuarni Wulandari Baji Pamai, Willy Arafah, & Kusnadi, Indonesia

Abstract:

The main objective of this study is to analyze The Effect Of Transformational Leadership, Dynamic Capability And Psychological Empowerment On Organizational Performance Of The Army Hospital Mediated By Competitive Advantage And Moderated By Organizational Culture. The population in this study consists of structural officers working in fourteen Indonesian Army Level II hospitals. The sample size is 242 respondents from these hospitals. The data were analyzed using Structural Equation Modeling (SEM) with SPSS version 22.0 and Smart PLS version 3. Transformational Leadership and Dynamic Capability do not have a direct positive effect on Organizational Performance. Psychological Empowerment has a positive effect on Organizational Performance. Transformational Leadership, Dynamic Capability, and Psychological Empowerment all positively influence Competitive Advantage. Competitive Advantage positively impacts Organizational Performance. Moreover, Competitive Advantage mediates the positive effects of Transformational Leadership, Dynamic Capability, and Psychological Empowerment on Organizational Performance. However, Organizational Culture does not moderate the positive influence of Competitive Advantage on Organizational Performance. This study emphasizes the critical role of transformational leadership in stimulating creativity and fostering two-way communication to enhance motivation and individual performance. Although dynamic capability does not directly impact organizational performance, it remains essential to develop this capability through routine training to support organizational improvements. The results also highlight the need to improve inter-team cooperation and balance attention between work processes and outcomes. A strong and relevant organizational culture should be reinforced through simple communication and role modeling by leaders so that organizational values are reflected in employee behavior. The study is limited to a sample of 242 structural officers from fourteen Level II Indonesian Army hospitals, which may limit the generalizability of the findings to broader contexts. The research focuses on the influence of transformational leadership, dynamic capability, and psychological empowerment on organizational performance, with competitive advantage as an intervening variable and organizational culture as a moderator. Additionally, data were collected through questionnaires dependent on respondent perceptions, so the possibility of subjective bias cannot be entirely ruled out.

This study contributes by opening opportunities for further development to integrate strategic management theory and practice within military healthcare organizations.

DOI: https://doi.org/10.51505/IJEBMR.2025.91119