The indirect effect of transformational leadership on business resilience: the mediating role of innovation capability and competitive advantage

In Indonesia’s hospitality industry, transformational leadership fosters innovation and strengthens crisis recovery. This study examines the indirect impacts of transformational leadership on business resilience via the mediating roles of innovation capability and competitive advantage within the hotel industry. The Resource-Based View (RBV) and Dynamic Capability theories are used to analyze resource conditions and sustain businesses amid global competition and crises. This study employed a quantitative study with a three-wave data collection technique. This study employed structured surveys with 67 hotels participating and yielding 134 responses, while organizational-level data collection involved both employees and supervisors to ensure insights from various hierarchical levels. The research utilized Structural Equation Modeling Partial Least Squares (SEM-PLS), using SMARTPLS 4 as the analysis tool. The research findings indicate that transformational leadership has a positive and significant effect on innovation capability, which in turn enhances competitive advantage and business resilience in the hospitality industry, though external factors like the COVID-19 pandemic and the Job Creation Law limit the direct impact of leadership on these outcomes. The indirect influence of transformational leadership through innovation and competitive advantage is crucial for sustaining resilience in the hospitality industry, underscoring the importance of leadership and innovation in navigating global challenges.