The Impact of Inclusive Leadership on Organizational Resilience Mediated by Strategic Agility and Innovation Capability in MSMEs

This study aims to analyze the impact of inclusive leadership on organizational resilience by examining the mediating roles of strategic agility and innovation capability among micro, small, and medium enterprises (MSMEs) in the food and beverage sector in Batam City, Riau Islands Province. This research employed a quantitative explanatory approach with a cross-sectional design. The sample comprised 250 MSME owner-managers selected through purposive sampling. Data were collected using questionnaires distributed online via Google Forms, WhatsApp, and email, as well as offline through direct field visits. Data were analyzed using Structural Equation Modeling with AMOS 29, while mediation effects were tested using the Sobel test. The findings indicate that inclusive leadership has a positive and significant effect on strategic agility and innovation capability, but does not exert a direct effect on organizational resilience. Strategic agility also does not significantly affect organizational resilience and fails to mediate the relationship between inclusive leadership and organizational resilience. In contrast, innovation capability has a positive and significant effect on organizational resilience and significantly mediates the relationship between inclusive leadership and organizational resilience. These findings highlight the importance of inclusive leadership in fostering innovation as the primary pathway for strengthening MSME resilience in a turbulent business environment. The study supports Dynamic Capabilities Theory by showing that organizational resilience is more effectively built through operational innovation capability than through strategic agility alone and provides a basis for designing more sustainable regional MSME development programs.

Inclusive Leadership, Organizational Resilience, Strategic Agility, Innovation Capability

1. Abid, N., Ceci, F., & Aftab, J. (2024). Attaining sustainable business performance under resource constraints: Insights from an emerging economy. Sustainable Development, 32(3), 2031–2048. https://doi.org/10.1002/sd.2763 [Google Scholar] [Crossref]

2. Adomako, S., Amankwah-Amoah, J., Donbesuur, F., Ahsan, M., Danso, A., & Uddin, M. (2022). Strategic agility of SMEs in emerging economies: Antecedents, consequences and boundary conditions. International Business Review, 31(6), 102032. https://doi.org/10.1016/j.ibusrev.2022.102032 [Google Scholar] [Crossref]

3. AlMulhim, A. F., & Mohammed, S. M. (2023). The impact of inclusive leadership on innovative work behavior: a mediated moderation model. Leadership and Organization Development Journal, 44(7), 907–926. https://doi.org/10.1108/LODJ-05-2023-0224 [Google Scholar] [Crossref]

4. Arranz, N., Arroyabe, M., Li, J., & Fernandez de Arroyabe, J. C. (2020). Innovation as a driver of eco-innovation in the firm: An approach from the dynamic capabilities theory. Business Strategy and the Environment, 29(3), 1494–1503. https://doi.org/10.1002/bse.2448 [Google Scholar] [Crossref]

5. Bhamra, R., Dani, S., & Burnard, K. (2011). Resilience: The concept, a literature review and future directions. International Journal of Production Research, 49(18), 5375–5393. https://doi.org/10.1080/00207543.2011.563826 [Google Scholar] [Crossref]

6. Blunch, N. (2012). Introduction to Structural Equation Modelling Using SPSS and AMOS. In Introduction to Structural Equation Modelling Using SPSS and AMOS. https://doi.org/10.4135/9781446249345 [Google Scholar] [Crossref]

7. BPS Kepri. (2024). Provinsi Kepulauan Riau Dalam Angka 2024. Badan Pusat Statistik Provinsi Kepulauan Riau. [Google Scholar] [Crossref]

8. BPS Kepri. (2025). Profil Industri Mikro dan Kecil Provinsi Kepulauan Riau 2024. Badan Pusat Statistik Provinsi Kepulauan Riau. [Google Scholar] [Crossref]

9. Byrne, B. M. (2013). Structural Equation Modeling With AMOS. In Structural Equation Modeling With AMOS. https://doi.org/10.4324/9781410600219 [Google Scholar] [Crossref]

10. Carmeli, A., Reiter-Palmon, R., & Ziv, E. (2010). Inclusive leadership and employee involvement in creative tasks in the workplace: The mediating role of psychological safety. Creativity Research Journal, 22(3), 250–260. https://doi.org/10.1080/10400419.2010.504654 [Google Scholar] [Crossref]

11. Carfora, A., Scandurra, G., & Thomas, A. (2021). Determinants of environmental innovations supporting small- and medium-sized enterprises sustainable development. Business Strategy and the Environment, 30(5), 2621–2636. https://doi.org/10.1002/bse.2767 [Google Scholar] [Crossref]

12. Chan, C. M. L., Teoh, S. Y., Yeow, A., & Pan, G. (2019). Agility in responding to disruptive digital innovation: Case study of an SME. Information Systems Journal, 29(2), 436–455. https://doi.org/10.1111/isj.12215 [Google Scholar] [Crossref]

13. Chang, A., Lee, T. S., Lee, H. M., & Wang, J. (2023). The Influence of Responsible Leadership on Strategic Agility: Cases from the Taiwan Hospitality Industry. Sustainability (Switzerland), 15(3), 1–15. https://doi.org/10.3390/su15032760 [Google Scholar] [Crossref]

14. Ciasullo, M. V., Montera, R., & Douglas, A. (2022). Building SMEs’ resilience in times of uncertainty: the role of big data analytics capability and co-innovation. Transforming Government: People, Process and Policy, 16(2), 203–217. https://doi.org/10.1108/TG-07-2021-0120 [Google Scholar] [Crossref]

15. Colclough, S. N., Moen, Ø., Hovd, N. S., & Chan, A. (2019). SME innovation orientation: Evidence from Norwegian exporting SMEs. International Small Business Journal: Researching Entrepreneurship, 37(8), 780–803. https://doi.org/10.1177/0266242619870731 [Google Scholar] [Crossref]

16. Coordinating Ministry for Economic Affairs of the Republic of Indonesia. (2023, August 24). Dorong UMKM naik kelas dan go export, pemerintah siapkan ekosistem pembiayaan yang terintegrasi. [Google Scholar] [Crossref]

17. Dai, X., & Fang, Y. (2023). Does inclusive leadership affect the organizational socialization of newcomers from diverse backgrounds? The mediating role of psychological capital. Frontiers in Psychology, 14(April), 1–10. https://doi.org/10.3389/fpsyg.2023.1138101 [Google Scholar] [Crossref]

18. Doz, Y. L., & Kosonen, M. (2010). Embedding strategic agility: A leadership agenda for accelerating business model renewal. Long Range Planning, 43(2–3), 370–382. https://doi.org/10.1016/j.lrp.2009.07.006 [Google Scholar] [Crossref]

19. Duchek, S. (2020). Organizational resilience: A capability-based conceptualization. Business Research, 13(1), 215–246. https://doi.org/10.1007/s40685-019-0085-7 [Google Scholar] [Crossref]

20. Eisenhardt, K. M., & Martin, J. A. (2000). Dynamic capabilities: What are they? Strategic Management Journal, 21(10–11), 1105–1121. https://doi.org/10.1002/1097-0266(200010/11)21:10/11<1105::AID-SMJ133>3.0.CO;2-E [Google Scholar] [Crossref]

21. García-Valenzuela, V. M., Jacobo-Hernandez, C. A., & Flores-López, J. G. (2023). Dynamic Capabilities and Their Effect on Organizational Resilience in Small and Medium-Sized Commercial Enterprises. Management and Marketing, 18(4), 496–514. https://doi.org/10.2478/mmcks-2023-0027 [Google Scholar] [Crossref]

22. Garrido-Moreno, A., Martín-Rojas, R., & García-Morales, V. J. (2024). The key role of innovation and organizational resilience in improving business performance: A mixed-methods approach. International Journal of Information Management, 77, 102777. https://doi.org/10.1016/j.ijinfomgt.2024.102777 [Google Scholar] [Crossref]

23. Gupta, S., Nawaz, N., Tripathi, A., Arif Chaudhry, S., & Agrawal, K. (2022). Impact of Inclusive Leadership on Innovation Performance During Coronavirus Disease 2019 Outbreak: Mediating Role of Employee Innovation Behavior and Moderating Role of Psychological Empowerment. Frontiers in Psychology, 13(August), 1–14. https://doi.org/10.3389/fpsyg.2022.811330 [Google Scholar] [Crossref]

24. Hamid, N. A., Ismail, I. S., Yunus, N., Jali, M. N., & Rosly, A. S. (2022). Taxpayer Perceptions of Tax Awareness, Tax Education, and Tax Complexity among Small and Medium Enterprises in Malaysia: A Quadrant Analysis Approach. Universal Journal of Accounting and Finance, 10(1), 231–242. https://doi.org/10.13189/ujaf.2022.100124 [Google Scholar] [Crossref]

25. Hokmabadi, H., Rezvani, S. M. H. S., & de Matos, C. A. (2024). Business Resilience for Small and Medium Enterprises and Startups by Digital Transformation and the Role of Marketing Capabilities—A Systematic Review. Systems, 12(6), 220. https://doi.org/10.3390/systems12060220 [Google Scholar] [Crossref]

26. Huynh, T. N., Van Nguyen, P., Doan, N. P., Tran, K. T., & Nguyen, T. C. (2024). Navigating challenges in Vietnamese enterprises: An examination of the interplay between environmental regulations, organizational innovation, resilience, learning support, and performance. PLoS ONE, 19(12). https://doi.org/10.1371/journal.pone.0313075 [Google Scholar] [Crossref]

27. Javed, B., Fatima, T., Khan, A. K., & Bashir, S. (2021). Impact of Inclusive Leadership on Innovative Work Behavior: The Role of Creative Self-Efficacy. Journal of Creative Behavior, 55(3), 769–782. https://doi.org/10.1002/jocb.487 [Google Scholar] [Crossref]

28. Javed, B., Naqvi, S. M. M. R., Khan, A. K., Arjoon, S., & Tayyeb, H. H. (2019). Impact of inclusive leadership on innovative work behavior: The role of psychological safety. Journal of Management and Organization, 25(1), 117–136. https://doi.org/10.1017/jmo.2017.3 [Google Scholar] [Crossref]

29. Kang, H. (2021). Sample size determination and power analysis using the G*Power software. Journal of Educational Evaluation for Health Professions, 18, 17. https://doi.org/10.3352/jeehp.2021.18.17 [Google Scholar] [Crossref]

30. Kompas.com. (2025, January 20). PLUT Batam bina 1.800 pelaku UMKM, 80 persen sektor kuliner. [Google Scholar] [Crossref]

31. Lee, K., & Shin, H. C. (2025). Effect of inclusive leadership on the diversity sensitivity and innovative behavior of hotel employees. Social Behavior and Personality, 53(2). https://doi.org/10.2224/sbp.14102 [Google Scholar] [Crossref]

32. Lengnick-Hall, C. A., Beck, T. E., & Lengnick-Hall, M. L. (2011). Developing a capacity for organizational resilience through strategic human resource management. Human Resource Management Review, 21(3), 243–255. https://doi.org/10.1016/j.hrmr.2010.07.001 [Google Scholar] [Crossref]

33. Li, X., & Peng, P. (2023). Does inclusive leadership foster employee psychological resilience? The role of perceived insider status and supportive organizational climate. Frontiers in Psychology, 14, 1127780. https://doi.org/10.3389/fpsyg.2023.1127780 [Google Scholar] [Crossref]

34. Marquès, A. A. A. B. P. (2017). Strategic Agility driven business model renewal. In The Electronic Library (Vol. 34, Issue 1). [Google Scholar] [Crossref]

35. Mollah, M. A., Ibrahim, Masud, A. Al, & Chowdhury, M. S. (2024). How does digital leadership boost competitive performance? The role of digital culture, affective commitment, and strategic agility. Heliyon, 10(23), e40839. https://doi.org/10.1016/j.heliyon.2024.e40839 [Google Scholar] [Crossref]

36. Musa, S., & Enggarsyah, D. T. P. (2025). Absorptive capacity, organizational creativity, organizational agility, organizational resilience and competitive advantage in disruptive environments. Journal of Strategy and Management, 18(2), 303–325. https://doi.org/10.1108/JSMA-10-2023-0265 [Google Scholar] [Crossref]

37. Nembhard, I. M., & Edmondson, A. C. (2006). Making it safe: The effects of leader inclusiveness and professional status on psychological safety and improvement efforts in health care teams. Journal of Organizational Behavior, 27(7), 941–966. https://doi.org/10.1002/job.413 [Google Scholar] [Crossref]

38. Njaramba, F., & Olukuru, J. (2025). Surviving a crisis: A multilevel model of leadership styles, employees’ psychological capital and organizational resilience. PLoS ONE, 20(2 February), e0318515. https://doi.org/10.1371/journal.pone.0318515 [Google Scholar] [Crossref]

39. Nuwan, N., Shukri, M., & Khatibi, A. (2024). Managerial strategies for organisational resilience in SME sector. International Journal of Research and Scientific Innovation, 11(1), 385–404. https://doi.org/10.51244/IJRSI.2024.1101030 [Google Scholar] [Crossref]

40. Qi, L., Liu, B., Wei, X., & Hu, Y. (2019). Impact of inclusive leadership on employee innovative behavior: Perceived organizational support as a mediator. PLoS ONE, 14(2), 1–14. https://doi.org/10.1371/journal.pone.0212091 [Google Scholar] [Crossref]

41. Prayag, G., Jiang, Y., Chowdhury, M., Hossain, M. I., & Akter, N. (2024). Building dynamic capabilities and organizational resilience in tourism firms during COVID-19: A staged approach. Journal of Travel Research, 63(3), 713–740. https://doi.org/10.1177/00472875231164976 [Google Scholar] [Crossref]

42. Riau Islands Office of Cooperatives and SMEs. (2025). MSME data by sector in Riau Islands Province. Riau Islands Provincial Government. [Google Scholar] [Crossref]

43. Sharma, G. D., Kraus, S., Talan, A., Srivastava, M., & Theodoraki, C. (2024). Navigating the storm: the SME way of tackling the pandemic crisis. Small Business Economics, 63(1), 221–241. https://doi.org/10.1007/s11187-023-00810-1 [Google Scholar] [Crossref]

44. Teece, D. J. (2018). Dynamic capabilities as (workable) management systems theory. Journal of Management and Organization, 24(3), 359–368. https://doi.org/10.1017/jmo.2017.75 [Google Scholar] [Crossref]

45. Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509–533. https://doi.org/10.1002/(SICI)1097-0266(199708)18:7<509::AID-SMJ882>3.0.CO;2-Z [Google Scholar] [Crossref]

46. Teece, D., Peteraf, M., & Leih, S. (2016). Dynamic capabilities and organizational agility: Risk, uncertainty, and strategy in the innovation economy. California Management Review, 58(4), 13–35. https://doi.org/10.1525/cmr.2016.58.4.13 [Google Scholar] [Crossref]

47. Troise, C., Corvello, V., Ghobadian, A., & O’Regan, N. (2022). How can SMEs successfully navigate VUCA environment: The role of agility in the digital transformation era. Technological Forecasting and Social Change, 174, 121227. https://doi.org/10.1016/j.techfore.2021.121227 [Google Scholar] [Crossref]

48. Velu, S. R., Al Mamun, A., Kanesan, T., Hayat, N., & Gopinathan, S. (2019). Effect of information system artifacts on organizational resilience: A study among Malaysian SMEs. Sustainability (Switzerland), 11(11), 3177. https://doi.org/10.3390/su11113177 [Google Scholar] [Crossref]

49. Wang, H., Chen, M., & Li, X. (2021). Moderating multiple mediation model of the impact of inclusive leadership on employee innovative behavior. Frontiers in Psychology, 12, 666477. https://doi.org/10.3389/fpsyg.2021.666477 [Google Scholar] [Crossref]

50. Wided, R. (2022). Achieving sustainable tourism with dynamic capabilities and resilience factors: A post disaster perspective case of the tourism industry in Saudi Arabia. Cogent Social Sciences, 8(1). https://doi.org/10.1080/23311886.2022.2060539 [Google Scholar] [Crossref]

51. Xu, G., Hou, G., & Zhang, J. (2022). Digital Sustainable Entrepreneurship: A Digital Capability Perspective through Digital Innovation Orientation for Social and Environmental Value Creation. Sustainability (Switzerland), 14(18), 11222. https://doi.org/10.3390/su141811222 [Google Scholar] [Crossref]

52. Zahoor, N., Arslan, A., Miri, D., & Khan, Z. (2024). Organizational resilience, innovation capabilities, and SME performance in high-risk contexts. In Business and Management in Asia: Disruption and Change (pp. 171–186). Springer Nature Singapore. https://doi.org/10.1007/978-981-99-9371-0_11 [Google Scholar] [Crossref]

53. Zaniarti, S., Veronica, S., & Arvi Arsytania, R. (2022). The Effect of Financial Literacy on the Sustainability of Micro, Small, and Medium Enterprises with Access to Finance as a Mediating Variable. The International Journal of Management Science and Business Administration, 9(1), 17–31. https://doi.org/10.18775/ijmsba.1849-5664-5419.2014.91.1002 [Google Scholar] [Crossref]

• Impact of Foreign Direct Investment in India
• Issues Involved in Digitalisation Special Reference to Indian Tourism Growth
• Relationship Marketing and Customer Loyalty in the Fast-Moving Consumer Goods (FMCG) Industry in Nairobi County
• Financial Literacy or Financial Inclusion? Which is Which, What is What—To Achieve Uganda’s 10-Fold Economic Growth By 2040
• Harnessing Natural Gas for Economic Transformation: Overcoming the Regulatory and Infrastructural Bottlenecks in Nigeria