Building Sustainable Competitive Advantage in Banking through Organizational Agility

Abstract

The fast development of technology in the banking sector has forced a basic review of organizational strategies and structures since banks want to keep ahead of the curve and satisfy the evolving needs of the digital era. This study examines the mediating role of organizational agility in the relationship between transformational leadership and digital transformation on sustainable competitive advantage in the banking sector. The research sample was drawn from a population consisting of head offices, branch offices, and sub-branch offices of regional banks in Indonesia, totaling 185 units. Based on 185 data points collected through surveys distributed to unit leaders, we used PLS-SEM analysis to test the proposed hypotheses. Empirical results indicate that transformational leadership and digital transformation have no significant effect on sustainable competitive advantage. However, organizational agility can significantly mediate this impact on sustainable competitive advantage. The findings underscore the importance of developing agility as an internal factor of organizations that plays a crucial role in achieving sustainable competitive advantage.