The Strategic Role of Knowledge Management in Mediating the Relationship Between Servant Leadership and Organizational Value

The Strategic Role of Knowledge Management in Mediating the Relationship Between Servant Leadership and Organizational Value

Chusni Mubarakh¹, Miswanto Miswanto², Baldric Siregar³, Frasto Biyanto⁴, Fitri Kartika⁵

^1,2,3,4Department of Management, STIE YKPN, Sleman, Yogyakarta, Indonesia

⁵Department of Management, ARS University, Bandung, Indonesia

DOI: https://doi.org/10.51584/IJRIAS.2025.1001027

Received: 11 January 2025; Accepted: 15 January 2025; Published: 13 February 2025

ABSTRACT

Purpose – This study examines the mediating role of knowledge management in the relationship between servant leadership and organizational value. The research focuses on understanding how leadership characteristics influence organizational outcomes by effectively utilizing knowledge management practices in healthcare.

Design/methodology/approach—Data were collected from employees at Tjitrowardojo Hospital using a quantitative approach. A structural equation modeling (SEM) technique was applied to test the relationships between servant leadership, knowledge management, and organizational value. Partial Least Squares (PLS) were employed to evaluate direct and indirect effects and assess the mediating role of knowledge management.

Findings – The results indicate that servant leadership has a significant direct impact on organizational value and an indirect effect mediated by knowledge management. Knowledge management plays a strategic role in amplifying the influence of servant leadership on organizational value. These findings underscore the importance of fostering knowledge-centric practices alongside servant leadership to enhance value creation in healthcare organizations.

Originality/value – This study contributes to the literature by providing empirical evidence on the mediating role of knowledge management in the context of servant leadership and organizational value. The research highlights the practical implications of integrating leadership and knowledge management strategies to optimize organizational performance in the healthcare sector, particularly in regional hospital settings

Keywords:  Servant Leadership, Knowledge Management, Organizational Value, Healthcare Management, Structural Equation Modeling

INTRODUCTION

Hospitals are essential institutions with a significant responsibility in maintaining and improving the quality of public health (Widowati & Mohklas, 2015). The quality of healthcare services (Marshall & Ron, 1994), patient satisfaction (Irvansyah & Daniel Joel Immanuel Kairupan, 2023; Suhonen et al., 2007), and operational efficiency measure a hospital’s hospital rating, one of the benchmarks for its success (Tabatabaei et al., 2015). Tjitrowardojo Purworejo General Hospital faces the challenge of continuously maintaining and enhancing its value amidst the dynamic developments in the healthcare sector.

Servant Leadership is one crucial factor influencing hospital value (Fardiana & Haryani, 2017; Pinem, 2017). This leadership model emphasizes empowering and serving subordinates, fostering collaboration, and prioritizing service improvement (Higgins, 2015). Effective Servant Leadership encourages open communication among employees and active participation in decision-making processes (Alzahrani & Hasan, 2019). Leaders who adopt this approach can significantly enhance employee motivation and improve organizational outcomes, including hospital value (Asif et al., 2019).  In addition to leadership (Miswanto, 2008), Knowledge Management is pivotal in supporting innovation and knowledge transfer within hospitals (Salami & Elo, 2015). Practical applications of Knowledge Management not only improve operational efficiency but also drive organizational value creation  (Tabatabaei et al., 2015); by implementing effective Knowledge Management practices, hospitals can document and distribute vital information efficiently, enhancing their capacity to respond to new challenges in the healthcare field (Ramírez et al., 2012).

This study introduces a novel perspective on how servant Leadership (Jamal et al., 2021) and Knowledge Management interact to enhance hospital value (Tabatabaei et al., 2015). While Servant Leadership creates a foundation for collaboration and innovation, Knowledge Management is a strategic mechanism for translating leadership efforts into tangible organizational outcomes. The research focuses specifically on Tjitrowardojo General Hospital Purworejo, a subject that has yet to receive much attention in the existing literature.

This study offers originality by highlighting the mediating role of Knowledge Management in linking Servant Leadership with hospital value. This combination of variables is rarely explored in healthcare literature, making this research unique. The study seeks to fill this gap by providing empirical evidence from Tjitrowardojo General Hospital Purworejo.

Based on the above background, this study aims to analyze the influence of Servant Leadership on hospital value and the mediating role of Knowledge Management in this relationship at RSUD Tjitrowardojo Purworejo.

LITERATURE REVIEW

Theoretical Framework and Hypotheses Development

This study conceptualizes the relationships among three key constructs. Servant Leadership (independent variable), Knowledge Management (mediating variable), and Hospital Value (dependent variable). These constructs form the foundation for understanding how leadership and knowledge systems interact to influence hospital value.

This theoretical framework provides the basis for testing these relationships empirically, focusing on Tjitrowardojo General Hospital Purworejo as a case study. By examining these constructs, the study aims to provide new insights into how leadership and knowledge management practices influence organizational value in healthcare settings.

Figure 1. Theoretical Framework (Hair et al., 2017; J. et al. et al., 2018; Kock, 2021)

Hospital Value

Hospital value, defined as a hospital’s ability to provide high-quality healthcare services, is the primary outcome of this study. It encompasses operational excellence, patient satisfaction, and the hospital’s reputation. Hospital value reflects the institution’s ability to deliver high-quality healthcare services while maintaining operational efficiency and patient satisfaction (Tabatabaei et al., 2015). This study positions hospital value as the ultimate outcome influenced by leadership and knowledge systems.

Servant Leadership

Servant leadership emphasizes empowering and serving subordinates to foster an inclusive and collaborative organizational culture. It is hypothesized that this leadership style (Miswanto, 2008) directly and indirectly influences hospital value by promoting knowledge-sharing and collaboration among employees. Servant Leadership focuses on the leader’s role in serving and empowering their subordinates (Asif et al., 2019). Abdul Jamal (2021) found that servant Leadership significantly impacts employee satisfaction and performance. Leaders who prioritize the needs of their team create a supportive environment that encourages employees to perform at their best, positively affecting overall organizational outcomes (Chika F., 2023; Jamal et al., 2021).

Knowledge Management

This mediating variable highlights the critical role of managing and utilizing knowledge within the organization. Effective knowledge management is proposed to bridge the gap between servant leadership practices and enhanced hospital value by improving innovation and operational efficiency. Knowledge management is critical in documenting, storing, and distributing knowledge within organizations (Ghijsen et al., 2016; Martynov & Zhao, 2010). Jeevan Jyoti and Asha Rani (2017) highlighted that effective knowledge management enhances organizational performance. When organizations actively manage knowledge, they improve their capacity to innovate and adapt to new challenges, improving service delivery and organizational effectiveness (Bayari et al., 2022; Salami & Elo, 2015).

In this chapter, the researcher focuses on the key constructs and relationships relevant to the study. Previous studies have explored the importance of leadership and knowledge management in organizational value; however, limited research exists on how these constructs interact in a hospital setting, particularly at Tjitrowardojo General Hospital Purworejo.

This study addresses this gap by investigating the impact of Servant Leadership on Hospital Value, with Knowledge Management serving as a mediating variable. This chapter develops a conceptual framework grounded in Servant Leadership, Knowledge Management, and Hospital Value interactions. It also introduces hypotheses that investigate the direct effects of servant leadership on hospital value and its indirect effects through knowledge management.

We propose the following hypotheses for this study, focusing on the three constructs identified in the research framework.

Direct Hypotheses

H1: Servant Leadership positively influences Knowledge Management at Tjitrowardojo Hospital.

Social Exchange Theory suggests that Servant Leadership fosters relational trust and collaboration, which enhances knowledge-sharing practices (Greenberg, 1987).

H2: Knowledge Management positively impacts the Value of Tjitrowardojo Hospital.

The Knowledge-Based View (KBV) indicates that effective Knowledge Management practices enhance organizational value by improving innovation and operational efficiency (Nickerson, 2023).

H3: Servant Leadership positively impacts the Value of Tjitrowardojo Hospital.

Transformational Leadership Theory supports the idea that Servant Leadership fosters employee engagement and collaboration, which contribute directly to organizational value (Colquitt, 2005; Greenberg, 1987).

Mediating Hypotheses

H4: Knowledge Management mediates the relationship between Servant Leadership and the Value of Tjitrowardojo Hospital.

Social Capital Theory posits that Servant Leadership builds trust and collaboration among employees, facilitating effective Knowledge Management, which, in turn, enhances organizational value (Nickerson, 2023).

RESEARCH METHODOLOGY

This study examines the causal relationships between key constructs. Servant Leadership, Knowledge Management, and Hospital Value. As outlined in the research hypotheses, these relationships are statistically tested and illustrated in Figure 1. The conceptual framework is presented in the figures above.

The research focuses on employees of Tjitrowardojo Regional General Hospital, Purworejo, as the target population. Data were collected from 200 respondents, encompassing diverse roles such as nurses, midwives, nutritionists, pharmacists, radiology staff, laboratory personnel, paramedics, and receptionists. The sampling method employed was purposive sampling, which considers the population’s characteristics and the research objectives (Creswel, 2022). This approach ensures that the selected sample is representative of the research population and aligns with the study’s goals (Creswell, 2019; Sauro & Lewis, 2012).

The primary data collection tool was a structured questionnaire distributed via Google Forms. The questionnaire contained 30 items designed to measure the three constructs. Each item was measured using a five-point Likert scale ranging from 1 (strongly disagree) to 5 (strongly agree). Data collection was conducted from October 18 to October 19, 2024. According to established guidelines, the minimum sample size is determined by multiplying the number of questionnaire items by ten (J. et al., 2019). Therefore, 30 items required a minimum of 300 respondents to ensure robust results.

The validity of the measurement items was assessed using loading factor values. Items with a loading factor of ≥ 0.60 were considered valid for measuring the constructs (Chin, 2010; J. et al. et al., 2019; J. et al. et al., 2018). Reliability was evaluated using Cronbach’s Alpha, with a threshold of ≥ 0.70 indicating reliable measurement items (Chin, 2010; J. F. Hair et al., 2019; Kock, 2023).

The study employed Partial Least Squares Structural Equation Modeling (PLS-SEM) for data analysis using SmartPLS 4.0. The analysis followed a systematic approach comprising several stages. The first stage involved testing the reliability and validity of the constructs using composite reliability, average variance extracted (AVE), and factor loadings. Constructs were deemed reliable if AVE exceeded 0.50 and factor loadings exceeded 0.60. The second stage assessed model fit indices, such as the Standardized Root Mean Square Residual (SRMR), to ensure that the model adequately represented the data. An SRMR value below 0.08 was acceptable (Hayes, 2009; Kock, 2022). The next stage focused on hypothesis testing, using bootstrapping techniques to evaluate the significance of path coefficients. A hypothesis was supported if the t-statistic exceeded 1.96 or the p-value was below 0.05 (Chin, 2010; Hair Jr, J. F., Sarstedt, M., Ringle, C. M., & Gudergan, 2018; Kock, 2023). The final stage involved mediation analysis, exploring the mediating role of Knowledge Management in the relationship between Servant Leadership and Hospital Value. Mediation effects were assessed using the Variance Accounted For (VAF) method to determine the extent of mediation (Donkor et al., 2021; Hamzah & Nordin, 2022; Kock, 2014).

Descriptive statistics Table 6 was employed to summarize the data, providing insights into each variable’s minimum and maximum values, means, medians, and standard deviations. These measures facilitated a clearer understanding of the research findings (Hair Jr, J. F., Sarstedt, M., Ringle, C. M., & Gudergan, 2018; Kock, 2022). Structural Equation Modeling (SEM) was utilized to comprehensively analyze the relationships between constructs. The study also employed path analysis to measure direct and indirect effects among the variables. Goodness-of-fit indices, such as the Average Path Coefficient (APC), were calculated to evaluate model adequacy and ensure robust findings(Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, 2017; Kock, 2019).

This systematic methodological approach ensures the study’s findings are reliable and valid and contribute valuable insights into the relationships between Servant Leadership, Knowledge Management, and Hospital Value in a healthcare context.

 Table 1. Demographic Information

The characteristics of respondent points are presented in Table 1. The respondent characteristics highlight a predominantly male workforce (81.0%), with females representing 19.0%, and nearly half of the employees are over 50 (48.5%), reflecting a reliance on seasoned professionals. In comparison, the remaining age groups include 38.0% in the 31–40 range and 13.5% aged 20–30, suggesting a balance between mid-career and younger staff; in terms of education, 49.0% hold a bachelor’s degree, 44.0% a diploma, 5.0% a high school qualification, and only 2.0% have a master’s degree, indicating limited postgraduate representation, while department-wise, nursing dominates with 61.0%, followed by paramedics (9.0%), receptionists (8.0%), structural and administrative roles (6.5%), and smaller proportions in midwifery, laboratory, radiology, and other healthcare functions, and years of service show a highly experienced workforce, with 78.5% serving more than a decade, 14.5% in early career (1–5 years), and 7.0% as newcomers (<1 year). The higher proportion of male employees and the limited presence of staff with advanced degrees could be areas for organizational development. The predominance of senior employees highlights strength in institutional knowledge but may require succession planning to address potential future retirements. The dominance of nurses in the respondent pool aligns with their critical role in patient care and suggests a focus on nursing workforce development in hospital policies.

Common Method Bias

Table 2. Testing For Potential CMB Based On Full Collinearity For All Constructs.

We evaluated procedural interventions to mitigate common method bias (CMB) during data collection (Kock, 2014; Kock & Moqbel, 2016). Before proceeding with the primary investigation, the potential presence of CMB was assessed using a comprehensive collinearity evaluation method (Kock, 2019); although its applicability in the PLS-SEM context has been debated, this method provides a robust approach to identify potential biases. A full collinearity variance inflation factor (VIF) exceeding 3.3 suggests pathological collinearity, potentially indicating model contamination by common method bias (CMB). This study’s proposed model’s evaluation revealed a maximum full collinearity VIF score of 1.845. This finding indicates that the model is free from significant standard method bias, as all constructs recorded VIF values below the threshold of 3.3 (Kock, 2014, 2022, 2023).

Endogeneity Bias

Table 4 presents the Gaussian copula approach test for endogeneity bias (Hair J et al., 2014). The results of the proposed structural relationships may be influenced by endogeneity bias, which can affect the reliability of hypothesis testing and lead to inaccurate conclusions (J. F. Hair et al., 2019). Following the Gaussian copula approach introduced by Park and Gupta, we examined the possibility of endogeneity using the procedure described by Hult et al. This approach is essential to validate the causal relationships in the context of Servant Leadership, Knowledge Management, and Organizational Value.

The analysis reveals that Servant Leadership significantly impacts organizational value in the original model with a path coefficient of 0.194 and a p-value of <0.001. This result remains consistent across the other models, even when endogenous variables are included. Knowledge Management also significantly affects organizational value with a path coefficient of 0.602 and a p-value of <0.001, which remains stable across all models. However, for the coefficient of Servant Leadership (C_SL) in the endogenous models, the results are not significant, with p-values of 0.963 in Model 1 and 0.571 in Model 3. Although SL is treated as an endogenous variable, its effect on KM or Value is not statistically significant in the more complex models. The coefficient for Knowledge Management in the endogenous models (C_KM) is also insignificant, with p-values of 0.295 in Model 2 and 0.278 in Model 3. This suggests that while KM plays an important role in the baseline model, its role in the models with endogeneity does not show a significant effect on the relationships being tested.

RESULT AND DISCUSSION

This study employed Structural Equation Modeling (SEM) to evaluate the proposed research model and test the formulated hypotheses. Partial Least Squares (PLS) regression, one of the most widely used SEM techniques, was utilized as the primary analytical method. The analysis was conducted using SmartPLS Version 4.0, incorporating bootstrapping with 5,000 resamples to assess the statistical significance of the indicators (Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, 2017; Kock, 2022).

Mediation and Path Analysis

A summary of the mediation and path analysis is presented in Table 5. The direct path coefficient from Servant Leadership to Value is statistically significant (p < 0.001), though 0.194 suggests a relatively weak direct relationship. This indicates that while Servant Leadership impacts Value, the effect is not strong enough to independently predict Value without mediating factors.

In contrast, the indirect effect of Servant Leadership on Value through Knowledge Management is statistically significant, with a coefficient of 0.803. This finding emphasizes the pivotal role that Knowledge Management plays as a mediator, strengthening the influence of Servant Leadership on Value. The total effect of 0.803, more significant than the direct effect of 0.194, confirms partial mediation. This demonstrates that Knowledge Management significantly contributes to the relationship between Servant Leadership and Value.

Additionally, the direct effect of Knowledge Management on Value is strong (0.602) and statistically significant (p < 0.001), suggesting that Knowledge Management itself is a critical driver of Value within the organization.

T-statistics for all paths exceeding the critical threshold of 1.96 for a 95% confidence level support the overall strength of the model, indicating that all tested relationships are statistically robust. Furthermore, the confidence intervals further validate the reliability of these estimates, particularly for the mediated relationship. This comprehensive analysis underscores the importance of both Servant Leadership and Knowledge Management in shaping organizational Value.

Measurement Model Evaluation

The evaluation of the measurement model is presented in Table 7. The loading factor (lf) values are crucial indicators of how well each measurement item represents its associated construct. Most indicators in this model have loading factors exceeding the threshold of 0.70, signaling a strong relationship between the items and their respective constructs. Although some indicators, such as SL1, SL2, and KM1, have slightly lower loadings, their values are still deemed acceptable since the other model validity and reliability criteria are satisfied. This indicates that while the loadings for these items are slightly weaker, the overall model remains robust.

The Composite Reliability (CR) values for all constructs in the model surpass the threshold of 0.70, confirming that the constructs exhibit high internal consistency. This suggests that the items within each construct are strongly correlated, ensuring the reliability of the measures used in the research. Furthermore, Cronbach’s Alpha values for all constructs are above 0.70, reinforcing the consistency and reliability of the items within each construct, ensuring that they reliably measure the intended concepts.

In terms of Average Variance Extracted (AVE), all constructs exceed the 0.50 threshold, indicating that the respective constructs explain a significant proportion of the variance in the measurement items. This finding supports the convergent validity of the model, confirming that the measurement items effectively capture the constructs they are designed to measure.

The Heterotrait-Monotrait Ratio (HTMT) values for all constructs are below the critical threshold of 0.90, ensuring that the constructs are distinct and do not exhibit substantial overlap. This is a key indicator of the model’s discriminant validity, meaning each construct is unique and different.

Additionally, the model meets the Fornell-Larcker Criterion, where the square root of the AVE for each construct is greater than the correlations between that construct and others. This further validates the discriminant validity of the constructs, ensuring they are sufficiently distinct from one another.

Lastly, the Cross-Loadings criterion is met for all indicators, meaning each indicator loads more strongly on its own construct than on any other construct. This reinforces the validity of the measurement model, ensuring that each item is closely aligned with its respective construct and not with other constructs (J. et al. et al., 2014; J. et al. et al., 2018; Kock, 2019).

Structural Model Evaluation

Table 8 presents the structural model evaluation. The analysis of the direct effects in the model reveals essential insights into the relationships between the constructs. The path from Servant Leadership to Value has a favorable path coefficient of 0.194, which is statistically significant. However, the relatively low value of this coefficient suggests that while Servant Leadership does influence Value, this effect is weak. This implies that other mediating factors may be at play that could strengthen the relationship between servant leadership and organizational value.

On the other hand, the path from Knowledge Management to Value shows a much stronger relationship, with a path coefficient of 0.602. This indicates that Knowledge Management plays a critical and substantial role in driving the Value within the organization, providing strong evidence of its importance in enhancing overall organizational performance and success (Donkor et al., 2021; J. F. H. Hair et al., 2018; Schuler et al., 2024)..

When examining the mediating effects, the path from Servant Leadership to Knowledge Management to Value (0.803) is notably higher than the direct path coefficient from Servant Leadership to Value. This suggests that Knowledge Management plays a crucial mediating role in enhancing the effect of Servant Leadership on Organizational Value. The indirect effect through Knowledge Management highlights its importance as a key intermediary factor that strengthens the relationship between leadership and organizational outcomes.

Bootstrap Analysis

Bootstrap Analysis: Table 8 and Figure 3. Regarding the bootstrap analysis, all path coefficients are significant, with confidence intervals (CI) that do not include zero. This confirms that the relationships between the constructs are robust and statistically reliable. The T-statistics for all the paths exceed the critical value of 1.96, further supporting the observed relationships’ validity and significance.

The Variance Inflation Factor (VIF) values for all constructs are below the threshold of 3.3, indicating no multicollinearity issue in the model. This suggests that the relationships between the constructs are independent, ensuring the estimates’ reliability and validity and confirming that the model does not suffer from common method bias or redundant relationships between constructs.

Lastly, the model fit indices, including SRMR and GoF, are within acceptable thresholds, demonstrating that the proposed model adequately explains the relationships among the constructs. These results indicate that the model is well-specified and valid, providing a solid framework for understanding the interactions between Servant Leadership, Knowledge Management, and Organizational Value. The model fit further enhances the credibility and applicability of the findings for theoretical and practical purposes in organizational management (Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, 2017; Kock, 2022).

Model Fit and Goodness-of-Fit Evaluation

Table 9 evaluates the model’s goodness-of-fit and predictive relevance and comprehensively explains its robustness and validity.

The R² values for the three endogenous constructs Servant Leadership, Knowledge Management, and Hospital Value—are high, with values of 0.741, 0.667, and 0.619, respectively. These R² values indicate that the model successfully explains a substantial portion of the variance in each construct. The high R² values demonstrate that the model effectively captures the relationships between the constructs, showcasing its robustness and solid explanatory power.

The Q² values for all constructs are above the threshold of 0.50, signifying strong predictive relevance. This indicates that the model has an excellent ability to predict the outcomes for each construct. The Q² values imply that the model can generate accurate predictions and effectively explain the relationships between Servant Leadership, Knowledge Management, and Hospital Value. In essence, the model does not only explain the relationships but also offers significant predictive power that can be useful for future applications.

The F² values for the relationships between constructs are moderate to high, suggesting that the relationships between the variables have a meaningful and substantial effect on the model. The higher the F² value, the more significant the impact of one construct on another. This indicates that the relationships between Servant Leadership, Knowledge Management, and Hospital Value significantly contribute to the variance in the dependent variables. The moderate to high effect sizes highlight the importance of these constructs in shaping the organizational outcomes measured in the model.

With an SRMR value of less than 0.08, the model demonstrates an excellent fit. The SRMR value indicates minimal differences between the observed and predicted values, reinforcing the model’s accuracy. This result confirms that the model is well-specified and that the data align closely with the hypothesized relationships. The low SRMR value assures that the model represents the actual data, further supporting its validity (Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, 2017; Hayes, 2009; Kock, 2014).

These results affirm that the proposed structural model is statistically robust and offers a high degree of explanatory and predictive relevance. The high R² and Q² values, moderate to high effect sizes, and excellent model fit (as indicated by the SRMR) prove the model is adequate for understanding the dynamics between Servant Leadership, Knowledge Management, and Hospital Value.

Table 3. Structural Path Model’s Hypothesis Testing Outcomes

Notes. Path coefficient values represent the strength of the relationship between variables. P-value indicates the significance level; a p-value < 0.05 is considered significant.

Table 3 presents the structural path model’s hypothesis testing outcomes. The analysis of the direct effects reveals several significant findings. Servant Leadership has a positive and statistically significant direct effect on Knowledge Management with a path coefficient of 0.144 (p-value 0.027). This result underscores the vital role of Servant Leadership in fostering Knowledge Management at Tjitrowardojo Hospital. It supports the idea that leadership behaviors that prioritize service, trust, and collaboration positively influence organizational processes related to knowledge sharing and cooperation.

Additionally, Knowledge Management significantly positively affects Value, with a path coefficient of 0.580 (p-value <0.001). This indicates that effective Knowledge Management practices are critical in enhancing the hospital’s value. Knowledge is a vital strategic resource for improving organizational outcomes, and proper management directly enhances hospital value.

Servant Leadership also directly impacts the hospital’s Value, with a path coefficient of 0.311 (p-value <0.001). This finding emphasizes that Servant Leadership is a key driver in increasing organizational value. Leadership styles that prioritize serving others and creating a supportive environment contribute to the overall success and effectiveness of the organization.

The mediating effects analysis reveals further insights. The indirect effect of Servant Leadership on Value through Knowledge Management is 0.803 (p-value <0.001), confirming partial mediation. While Servant Leadership directly influences hospital value, its effect is substantially enhanced through Knowledge Management. The results suggest that effective leadership creates an environment conducive to knowledge sharing, amplifying Servant Leadership’s impact on the hospital’s value. The direct effects findings demonstrate that Servant Leadership and Knowledge Management are essential to drive the hospital’s value. These elements play complementary roles in improving organizational performance. Furthermore, the partial mediation of Knowledge Management highlights how leadership effectiveness is enhanced when combined with strong knowledge management practices. This suggests that the full potential of Servant Leadership can be realized when integrated with knowledge management strategies that foster collaboration and innovation.

CONCLUSION

The analysis confirms that Servant Leadership and Knowledge Management play crucial roles in shaping the organizational value of Tjitrowardojo Hospital. The direct effect of Servant Leadership on Knowledge Management was positive and statistically significant, indicating that leadership practices contribute significantly to fostering knowledge-sharing and collaboration within the organization. Furthermore, Knowledge Management strongly impacts the hospital’s value, supporting the view that effective knowledge practices can enhance organizational performance and value.

The study also highlighted that Servant Leadership directly influences the hospital’s value, demonstrating the importance of leadership in driving organizational success. However, the mediating role of Knowledge Management further amplified and significantly impacted ship and organizational value. The indirect effect through Knowledge Management was notably more substantial, suggesting that leadership practices are most effective when coupled with robust knowledge management practices.

The results underline the importance of cultivating strong leadership and efficient knowledge management systems in healthcare organizations. The findings suggest that by fostering a culture of collaboration and knowledge sharing, Servant Leadership can significantly impact hospital value. Consequently, hospital managers and policymakers should consider integrating these factors to enhance organizational outcomes, improve patient care, and drive operational excellence

In conclusion, the research provides valuable insights into the strategic role of Servant Leadership and Knowledge Management in enhancing the overall value of Tjitrowardojo Hospital, offering practical implications for leadership and management strategies in healthcare institutions.

Implications

This study provides theoretical and practical implications that can enhance organizational value in the healthcare sector, particularly at Tjitrowardojo Hospital, Purworejo.

Theoretical Implications

The findings of this study provide significant theoretical contributions to understanding the relationships between Servant Leadership, Knowledge Management, and Organizational Value. Firstly, the positive and significant direct effects of Servant Leadership on Knowledge Management and Organizational Value, along with the decisive mediating role of Knowledge Management, highlight the importance of leadership in fostering organizational processes that enhance value creation. The result is that knowledge management directly impacts organizational value and further emphasizes the strategic role of knowledge within organizations. The intense mediation between Servant Leadership and Organizational Value via Knowledge Management extends the theoretical understanding of leadership’s indirect impact on organizational outcomes, contributing to existing management and leadership theories.

Additionally, the significant path coefficients and the positive mediating role of Knowledge Management suggest that future research could explore the relationship dynamics further. Researchers might investigate the specific mechanisms by which Servant Leadership influences Knowledge Management and how different forms of knowledge enhance organizational value.

Practical Implications

The findings offer valuable insights for managers and policymakers within healthcare organizations, particularly those aiming to improve organizational value through leadership and knowledge management. Servant Leadership has been demonstrated to have a direct and significant impact on both Knowledge Management and Organizational Value, indicating that organizations should invest in leadership development programs focused on promoting servant leadership qualities. By fostering trust, collaboration, and a supportive work environment, Servant Leadership can catalyze knowledge-sharing behaviors that ultimately lead to improved organizational performance.

The study highlights that effective Knowledge Management practices are essential in enhancing organizational value. Healthcare managers should prioritize the development of knowledge-sharing infrastructures, such as collaborative platforms, training programs, and incentive systems, that encourage employees to exchange information and expertise. This will enhance the hospital’s operational efficiency, innovation, and overall value.

Furthermore, the partial mediation effect of Knowledge Management emphasizes that while leadership alone can influence organizational outcomes, its impact is significantly strengthened when combined with strong knowledge management practices. This underscores the importance of integrating leadership and knowledge management strategies in organizational planning and decision-making.

The study suggests that healthcare organizations should nurture servant leadership styles and build robust knowledge management systems to improve their performance and value. These efforts will have a cascading effect on employee engagement and organizational success, ultimately benefiting the hospital’s value and reputation in the healthcare industry.

Limitations and Future Research

The findings presented in this study provide valuable insights into the relationships between Servant Leadership, Knowledge Management, and Value within Tjitrowardojo Hospital. However, several limitations must be considered, and future research can address these to further enhance the understanding of these constructs. One limitation is the sample size and generalizability. Since the study relied on data from Tjitrowardojo Hospital, the findings may not directly apply to other healthcare settings. Future research could replicate this study in different hospitals to improve the external validity of the results. Additionally, the study identified the mediating role of Knowledge Management, but some other potential mediators and moderators could influence these relationships. For instance, variables like organizational culture, employee engagement, or external environmental factors warrant further exploration. Future studies should incorporate these variables to better understand the mechanisms at play.

Furthermore, while this study relied on quantitative methods, integrating qualitative data through interviews or case studies could offer a richer, more in-depth perspective on how Servant Leadership and Knowledge Management impact organizational value. This approach would complement the quantitative analysis and provide more comprehensive insights. By addressing these limitations, future research can further refine and expand the understanding of the roles of leadership and knowledge management in enhancing organizational value across different contexts.

ACKNOWLEDGMENT

The authors would like to thank the staff and Management of Tjitrowardojo Purworejo General Hospital for their willingness to participate in this study.

Our thanks also go to our colleagues and research assistants, who offered their time and expertise throughout the study, and to our families, Fitri Kartika, Shankara, Shahzada, and Shahraza, Shahirah, for their patience and encouragement.

Finally, we thank the reviewers and editors for their constructive feedback, significantly improving the manuscript.

Ethical Approval

This study was conducted in compliance with ethical research standards. All participants provided informed consent

before participating in the research. The

the research was approved by the ethical

review board of Tjitrowardojo General Hospital, Purworejo, ensuring adherence to

ethical guidelines for studies involving

human subjects.

Contributorship

Dr. Chusni Mubarakh was the principal author, conceptualizing the study framework, supervising the research process, and drafting the initial manuscript. Dr. Fitri Kartika supported the project as the manuscript editor, enhancing the content and ensuring that the document adhered to publication standards. Dr. Miswanto Miswanto, Dr. Baldric Siregar, and Dr. Frasto Biyanto contributed as mentors, offering valuable guidance and critical feedback and validating the research framework and findings. All authors reviewed and approved the final manuscript.

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest concerning this article’s research, authorship, and publication.

Funding

The author(s) received no financial support for this article’s research and authorship.

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APPENDIX

APPENDIX A

Table 4. The Gaussian Copula Approach Test For Endogeneity Bias

Table 5. Mediation and Path Analysis Summary

Note. Indirect Effect (N/A). The indirect effect is only calculated for mediated relationships. Direct relationships such as Knowledge Management → Value and Servant Leadership → Value do not involve a mediating variable, and thus no indirect effect is reported.

Confidence Interval (N/A). Confidence intervals are only applicable to indirect effects to validate the mediation analysis. They are not relevant or reported for direct effects.

Figure 2. Empirical results of the structural path model (Hair Jr, J. F., Sarstedt, M., Ringle, C. M., & Gudergan, 2018; Kock, 2014, 2021; Kock & Moqbel, 2016).

Figure 3. Bootstrapping  Final Model (Hair Jr, J. F., Sarstedt, M., Ringle, C. M., & Gudergan, 2018; Kock, 2014, 2021; Kock & Moqbel, 2016).

APPENDIX B

Table 6. Descriptive statistical analysis (Chin, 2010; J. F. Hair et al., 2014)

APPENDIX C

Table 7. Measurement Model Evaluation (Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, 2017; Kock, 2014).

APPENDIX D

Table 8. Structural Model Evaluation and Bootstrap Analysis  (Hayes, 2009; Kock & Moqbel, 2016).

APPENDIX E

Table 9. Goodness-of-Fit (GoF) Evaluation  (Gountas & Gountas, 2016; Kock, 2021; Sauro & Lewis, 2012)