Impact of digital business transformation on organizational ambidexterity and performance in indonesian insurance firms

Purpose: This study investigates the impact of digital business intensity and transformation on organizational ambidexterity and sustainable performance on insurance companies in Indonesia from a dynamic capabilities’ perspective.Design/methodology/approach: The study uses a quantitative approach, purposive sampling used to select insurance companies with assets over IDR 1 trillion. The primary data was obtained directly from the top-level management unit of 120 data questionnaires, namely, 40 Chief Executive Officer (CEO), 40 chief agency officer (CAO) and 40 Chiefs Technology Officer CTO) of each company. The data of each department in a company is aggregated as a single unit of responses from one company. The Structural Equation Model is used as a method to test and analyze data, using SmartPLS software.Purpose: This study aims to investigate the impact of digital business intensity and digital transformation on organizational ambidexterity and sustainable organizational performance in Indonesian insurance firms from a dynamic capability perspective.Design/methodology/approach: Through quantitative approach, purposive sampling is used to select insurance companies with assets exceeding IDR 1 trillion. Primary data was collected through structured questionnaires distributed to 120 top-level executives, including 40 Chief Executive Officers (CEOs), 40 Chief Agency Officers (CAOs), and 40 Chiefs Technology Officers CTOs). Responses from each company were aggregated to form a unified dataset for analysis. Structural Equation Modeling (SEM) was used to analyze the data using SmartPLS software.Findings: The findings reveal that both digital business transformation and government interventions significantly increase organizational ambidexterity. Furthermore, organizational ambidexterity serves as a mediator for the relationship between digital business intensity and government intervention towards sustainable organizational performance. The mediating role of organizational ambidexterity in the relationship for digital business intensity and sustainable organizational performance is positively moderated by digital business intensity.Research limitations/implications: The study applies dynamic capability as a theoretical basis to understand how insurance companies can attain sustainable performance in the digital age. However, it acknowledges limitations, such as the exclusion of external factors like macroeconomic conditions, regulatory changes, and rapid technological advancements. The focus on the insurance sector may also limit the applicability of the findings to other industries with different dynamics.Practical implications: The study provides actionable insights for insurance firms to refine their digital strategies. By developing and validating new metrics to measure digital business intensity and sustainable performance, firms can better assess the effectiveness of their digital transformation. This framework serves as a guide for practitioners to evaluate the impact of digital initiatives on their organizations.Originality/value: This study enriches the organizational literature by demonstrating how digital business intensity and ambidexterity contribute to enhancing sustainable performance in the insurance industry. It also highlights the significance of government policies as external factors influencing organizational dynamics, offering a new perspective on how these elements interact within the context of dynamic capabilities in the financial sector.