Human capital, competitive advantage, and business performance: A study of Indonesian hospitals

Abstract

This study intends to prove and analyze three causal relationships in Indonesian hospitals. The first is the impact of human capital (HC) and competitive advantage (COMAD) on business performance. The second is the influence of HC on COMAD. The last is the mediating effect of COMAD on the association between HC and business performance. Furthermore, to implement this intention, this study uses medical doctors as the managers of hospitals in several locations in Indonesia with a quantitative approach based on statistical hypothesis testing. Because of the unidentified population, this study employs the snowball sampling technique, where the required theory verification determines the total samples. Providentially, this study can obtain 250 samples based on the survey; therefore, the covariance-based structural equation model is used to prove the formulated hypotheses, and the results demonstrate that Human Capital (HC) and Competitive Advantage (COMAD) positively affect Business Performance (BP). Also, HC positively influences COMAD. COMAD is proven to be a mediating variable based on the Sobel testing outcome. Based on these proofs, this study suggests that the related persons, especially medical doctors in hospitals, must be updated with new illness knowledge, supported by contemporary facilities, and how to cure related patients. By doing these, it bring an everlasting value to construct hospital business and strategy which unique solely for Indonesia hospital and sought by consumers.