The Role of Organizational Capital Agility in Enhancing Organizational Performance: Mediating Effects of Transformational Leadership, Organizational Culture, and HRM Practices

Abstract

Abstract

Background In an increasingly dynamic and competitive business environment, organizations are required to continuously adapt their intangible resources to sustain performance. While prior studies have emphasized the roles of transformational leadership, organizational culture, and human resource management (HRM) practices in enhancing organizational performance, limited attention has been given to the mechanisms through which these resources are transformed into dynamic capabilities. Methods This study employed a quantitative research design using survey data collected from 263 managers and supervisors of regional banks in Indonesia. Structural Equation Modeling (SEM) with AMOS was applied to examine the direct and indirect relationships among transformational leadership, organizational culture, HRM practices, organizational capital agility, and organizational performance. Mediation effects were tested using bootstrapping procedures to assess the significance of indirect relationships. Results The findings reveal that transformational leadership and organizational culture have significant positive effects on both organizational capital agility and organizational performance. Organizational capital agility was found to strongly influence organizational performance and significantly mediate the relationships between transformational leadership and performance, as well as between organizational culture and performance. In contrast, while HRM practices directly enhance organizational performance, they do not have a significant effect on organizational capital agility, nor is their impact on performance mediated by OCA. Conclusions This study highlights Organizational Capital Agility as a key dynamic capability that translates leadership and cultural resources into improved organizational performance. The results extend the Resource-Based View and Dynamic Capability Theory by demonstrating the mediating role of agility in resource transformation processes. Practically, the findings suggest that banking institutions should prioritize the development of transformational leadership and adaptive organizational cultures to foster agility, while aligning HRM practices with broader agility-oriented strategies to sustain performance in turbulent environments.