Performance of Muhammadiyah Hospital as Social Entrepreneurship Organization through Organizational Capability for Change

The purpose of this study is to explore the relationship of three variables, namely: purpose driven organization (PDO), organizational capability for change (OC) in shaping sustainable organizational performance (OOP) through the framework of dynamic capability theory as a grand theory. Muhammadiyah as one of the largest religious organizations in Indonesia has for more than a hundred years owned and managed the most non-profit private hospitals in the world. Thus, Muhammadiyah Hospital is a model of social entrepreneurship organization (SEO). The study was conducted with primary data through interviews with 219 top management respondents at 111 Muhammadiyah hospitals in Indonesia (89.5% of the population). The analysis method used was Structural Equation Modeling (SEM) using Maximum Likelihood Estimation. The results found that organizational goals and organizational capacity to change positively influence each other in shaping hospital organizational performance in a sustainable manner. The increase in organizational goals and organizational capacity to change also increases the performance of hospital organizations on an ongoing basis. The results of the analysis of the effect of the mediating variable of organizational capacity to change on organizational goals in influencing the performance of Muhammadiyah Hospitals, showed an increase in organizational goals as the mediating variable of organizational capacity to change increased and improved the performance of Muhammadiyah Hospitals. Based on the results of the study, it is recommended to strengthen the internalization of hospital service development goals to all stakeholders of the hospital organization because it can make a positive contribution to hospital performance. The ability of Muhammadiyah as the owner and directors of the hospital to deal with change also needs to be continuously strengthened as it further strengthens the contribution in improving hospital performance in a sustainable manner.