How to create organizational change capability? Management dynamic capability, innovation, and it's impact on the organizational performance: Knowledge spillover as mediating variable

Abstract

Organizational change capability is absolutely necessary for organizations to make survive in a dynamic and competitive market environment. To improve the organizational system to achieve goals by prioritizing the development of change capabilities in a comprehensive manner, from every element or unit within the organization. Organizational change will not be achieved optimally and purposefully without a management capability design in building a change strategy. The existence of a management dynamic capability design can create an innovation through optimizing knowledge sourced from internal and external organizations. The existence of innovation in the organization will have an impact on improving organizational performance to achieve a sustainable competitive advantage. This study aims to examine the effect of management dynamic capability on innovation; examine the mediating role of knowledge spillover on the effect of management capability on innovation; examine the impact of innovation on firm performance. This study uses a quantitative approach, the sampling technique is purposive sampling. The data used is primary data through online distributed surveys by the sample size 218 respondents. Data analysis techniques using the Structural Equition Modeling test. The results of the study show that management dynamic capability has a significant positive effect on innovation mediated by knowledge spillover. Then, innovation has a significant positive effect on organizational performance.