Inclusive leadership and adaptive-innovation capability: a dynamic capabilities approach to gaining competitive advantage in the tourism sector

This study draws upon Dynamic Capabilities Theory (DCT) to explain how organizations achieve competitive advantage. It proposes a new concept, adaptive-innovation capability (AIC), as an organizational capability for strengthening competitive advantage. This study aims to examine the influence of inclusive leadership on organizational competitive advantage, as well as the mediating roles of adaptive-innovation capability and innovative organizational culture. It addresses a literature gap by examining inclusive leadership and organizational competitive advantage in tourism organizations through a DCT lens, an underexplored area. This study uses quantitative data collected through a survey of 138 managers/leaders of tourism organizations, which were analyzed using PLS-SEM. Findings from small, primarily government-linked tourism organizations in Indonesia suggest that adaptive-innovation capability and innovative organizational culture play key mediating roles in enabling inclusive leadership to strengthen competitive advantage. While context-specific, these findings provide practical insights for leaders facing business-environment disruptions, particularly in implementing inclusive leadership. Overall, this study introduces AIC as a DCT-derived construct and provides empirical support for its relevance in explaining competitive advantage in tourism organizations.