How does management innovation foster hospital performance? The mediating role of organizational capital

Drawing upon the knowledge-based view (KBV) and the knowledge-based dynamic capabilities (KBDCs) perspective, this study examines the relationship between management innovation and hospital performance as well as the mediating role of organizational capital. Using data from 325 valid questionnaires completed by hospital HR managers in Taiwan, we conducted structural equation modeling (SEM) and bootstrapping for analysis. Results show that management innovation fostered hospital performance, as measured according to the balanced-scorecard concept. Additionally, organizational capital mediated the relationship between management innovation and hospital performance, further indicating that the success of management innovation is determined by how such innovation is transformed into a knowledge-storage mechanism – that is, the organizational capital of a hospital.