The Mediating Role of Digital Innovation in the Relationship between Digital Culture, Digital Leadership, Digital Transformation, and Organizational Performance: A Study of Indonesian Army

Marles Edy Wanto Haloho, Bahtiar Usman and Aekram Faisal
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Marles Edy Wanto Haloho: Department of Economics and Business, Trisakti University, Jakarta, Indonesia.
Bahtiar Usman: Department of Economics and Business, Trisakti University, Jakarta, Indonesia.
Aekram Faisal: Department of Economics and Business, Trisakti University, Jakarta, Indonesia.

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Abstract: Aims: This study aimed to examine the role of digital innovation in mediating the influence of organizational digital culture, digital leadership, and digital transformation on organizational performance in Indonesian Army Hospitals (Rumah Sakit TNI Angkatan Darat – RS TNI AD). Study Design: A quantitative research design was employed using Structural Equation Modeling (SEM) with the Partial Least Squares (PLS-SEM) approach. Place and Duration of Study: The study was conducted in Type C RS TNI AD hospitals across Indonesia, with data collection carried out between December 2023 and February 2024. Methodology: A total of 123 upper- and middle-level managers from Type C RS TNI AD hospitals were selected using purposive sampling. Data were gathered through a structured online questionnaire. SEM analysis was conducted using SmartPLS 3.0 software, and the Sobel test was used to assess the mediating effect of digital innovation. Results: The findings revealed that digital leadership, digital transformation, and digital innovation each had a significant positive effect on organizational performance. Digital transformation also had a strong positive effect on digital innovation. However, organizational digital culture and digital leadership did not significantly influence digital innovation, nor did they show significant indirect effects on performance through innovation. Only digital innovation was found to mediate the relationship between digital transformation and organizational performance. Conclusion: This study contributes to the Resource-Based View (RBV) theory by demonstrating how intangible digital capabilities particularly digital transformation and innovation positively impact organizational performance, even within highly structured environments like military hospitals. It offers important insights for scholars and practitioners on implementing digital strategies in complex public healthcare systems. The findings emphasize the critical role of digital transformation in fostering innovation and enhancing performance. Future research should expand the sample to other types of military hospitals to improve the generalizability of results.

Date: 2025-06-05
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Published in Journal of Economics, Management and Trade, 2025, 31 (7), pp.22-40. ⟨10.9734/jemt/2025/v31i71310⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05100477

DOI: 10.9734/jemt/2025/v31i71310

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