Improving Firm Sustainability Through Dynamic Capability: The Mediation Role of Ambidexterity

Abstract

Purpose: This study aims to analyze the effect of dynamic capability dimensions on sustainability and ambidexterity. Furthermore, this study also analyzes the mediating role of ambidexterity to influence sensing, seizing and reconfiguring capabilities in building firm sustainability. Theoretical framework: There are inconsistencies in previous research related to the effect of dynamic capability. Some recent literatures emphasize the important role of dynamic capability in increasing company sustainability including Li et al. (2019), Dangelico et al. (2017), Chowdhury & Quaddus, (2021). However, in some cases, capability does not have a strong influence on sustainability (Hong et al: 2018, Borahima et al. 2021). This study seeks to analyze further and find a better model. Design/methodology/approach: This study is a quantitative study with a research population that includes employees, managers, and start-up owners in Yogyakarta. From the population, 250 respondents were taken as research samples. The analysis was carried out using the structural equation model method using AMOS software. Findings: The results found that sensing capability had no effect on sustainability and ambidexterity. In other side, seizing and reconfiguring capability influence sustainability and ambidexterity. Furthermore, this study found that ambidexterity was not able to mediate sensing capability on sustainability. Meanwhile, ambidexterity has been proven to mediate each effect of seizing and reconfiguring capability on sustainability. Research, Practical & Social implications: This research emphasizes on managers and entrepreneurs that dynamic capability and ambidexterity have an important role in growing sustainability. Future studies may consider to elaborate further on the role of dynamic capability and ambidexterity both from the aspect of moderating influence and the wider research object aspect. Originality/value: The results indicate that dynamic capability’s factors especially seizing and reconfiguring capability, also ambidexterity have an important role in company’s sustainability.

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