The effect of institutional pressures and dynamic managerial capability on strategic renewal: The case of strategic agility and digital readiness as mediators in healthcare industry

Abstract

This research investigates the role of institutional pressures, dynamic managerial capabilities, strategic agility and digital readiness as mediating factors in the gap of the healthcare sector's post-pandemic digital transformation. This study employed strategic and managerial questionnaires involving 308 medium-sized private hospitals in Indonesia and LISREL 6.0 was used for the analysis. Findings indicated that strategic agility did not mediate dynamic managerial capability for strategic renewal. Moreover, the private healthcare sector was found to be influenced by pressures to imitate other hospitals and competitors, and digital readiness had a stronger mediating effect than strategic agility. The study enriches organization theory by investigating institutional pressures driving strategic renewal. It also enhances the literature on strategic management by exploring the mediating role of strategic agility and digital readiness in strategic change. Lastly, it highlights the association between digital readiness and managerial and organizational aspects resulting from strategic change and further emphasizes the need for integrated teams and digital health services in hospitals to achieve strategic renewal.