Managerial innovative capabilities,

competitive advantage and

performance of healthcare sector
during Covid-19 pandemic period
Demetris Vrontis, Hani El Chaarani, Zouhour El Abiad, Sam El Nemar and
Alissar Yassine Haddad

Abstract Demetris Vrontis is based

Purpose – The purpose of this paper is to reveal the impact of dynamic managerial innovative at the University of Nicosia,
capabilities on the competitive advantage (CA), financial performance (FP) and non-financial Nicosia, Cyprus.
performance (NFP) of the health-care sector during the very turbulent Covid-19 pandemic period. The Hani El Chaarani is based
focus is on human behavior and personnel interaction in the hospitals that receive Covid-19 cases. at Beirut Arab University,
Design/methodology/approach – Data for this research was collected from the medical sector in Beirut, Lebanon.
Lebanon. The authors approached 14 public hospitals and 60 private hospitals for the study and only 48 Zouhour El Abiad is based
hospitals (total of 284 respondents) accepted to complete the survey and provide data using a structured at Lebanese University,
questionnaire.
Beirut, Lebanon.
Findings – This study reveals the moderating impact of CA on the relationship between dynamic
Sam El Nemar is based at
managerial innovative capabilities and the performance of the health-care sector. Based on 48 Lebanese
AZM University, Tripoli,
health-care centers during the Covid-19 pandemic, the results of the structural equation modeling model
indicate that dynamic managerial innovative practices positively impact on CA and NFP. The results also Lebanon.
reveal that CA has a moderating effect on the relationship between dynamic managerial innovative Alissar Yassine Haddad is
practices and NFP. based at Beirut Arab
Practical implications – This study does not reveal any direct or indirect relationship between University, Beirut, Lebanon.
managerial capabilities and FP during the pandemic.
Originality/value – As the world deals with the Covid-19 pandemic, the health-care sector needs new
approaches and methods for confronting the constantly evolving and turbulent environment. This study
examines how health-care leaders are dealing with these dynamic challenges and tests a three-dimensional
SEM model of dynamic managerial capabilities (sensing, seizing and reconfiguration) that impact CA.
Keywords Innovation, Competitive advantage, Financial performance, Health-care sector,
Non-financial performance, Dynamic managerial capabilities
Paper type Research paper

1. Introduction
It will be recorded that, in 2020, the world was unified against a common enemy, Covid-19,
which interrupted people in all aspects of their lives. The Covid-19 pandemic has brought
enormous pressure to the global health-care system. First, this unrivaled situation poses a
significant challenge to the safety of health-care workers who face a major risk of getting
infected while providing care for confirmed or suspected Covid-19 cases. This horrific
situation compels health-care workers to develop innovative ways to protect themselves, Received 15 February 2021
Revised 15 April 2021
especially when innovation strategies of knowledge are also sources of competitive 21 July 2021
advantage for health-care institutions (Penco et al., 2019). Accepted 11 August 2021

DOI 10.1108/FS-02-2021-0045 © Emerald Publishing Limited, ISSN 1463-6689 j FORESIGHT j

 This has enhanced the burden to provide care, due to a shortage of health-care
professionals. Another challenge facing the health-care workforce is its gender distribution.
Globally, women represent 70% of the health-care workforce (Boniol et al., 2019), and the
lockdown measures have impacted their work-life balance tremendously because they also
have demanding roles in their households. The new situation has added more emotional
and social stress to female nurses and it has affected their work shifts and schedules.
Moreover, the health-care efforts and resources are directed mainly toward fighting Covid-
19, causing many hospitals to cancel or defer appointments for elective procedures,
chronic disease care, maternal health care, preventive medical care and many other non-
urgent procedures. This delay has no doubt led to the suspension of care primarily for
patients with chronic diseases, placing them at higher risk for comorbidities or even
mortalities. Medical service delays did not affect only patients but also had an effect on
hospitals’ finances. Many health-care facilities have limited their services and closed many
wards and many others have been struggling to cope with shortages in financial and human
resources.
With the surge of critically ill Covid-19 patients who need hospital care, hospital resources
are intensely depleted. There is a huge demand for personal protective equipment (PPEs),
ventilators, intensive care unit (ICU) beds, disinfectants and many other vital resources.
A few short months after Covid-19 started spreading, health-care leaders realized the need
to reassess their resources and change their strategies to adapt to the uncertain future. As
with any innovative paradigm change, leaders are expected to move forward while avoiding
reckless or hasty decisions (Kuhn, 2012), while being the first to change (Vrontis et al.,
2020). During a crisis, leaders must act fast and look forward, yet, they should think of
options and the impact of actions taken (Netolicky, 2020). To lead during a crisis is
fundamentally flawed, and errors will be made, but it is the push forward that is crucial and
the key to getting through the most difficult moments.
President Kennedy (1959) once said: the Chinese use two brush strokes to write the word
crisis. One brush stroke stands for danger: the other for opportunity. In a crisis, be aware of
the danger – but recognize the opportunity. Amid the uncertain situation raised by Covid-
19, the creation of opportunity requires mastering specific skills, such as knowledge,
resilience, creativity, perception of customer concerns and the ability to wisely turn this into
an opportunity through actions.
A large and growing body of literature has investigated the moderating effect of the
contextual variable, environmental dynamism, on the relation between innovative dynamic
capabilities and performance. Schilke (2014) highlighted that there are different beliefs on
the moderating effect of environmental dynamism. Some studies have suggested that a
dynamic environment increases the link (Drnevich and Kriauciunas, 2011; Winter, 2003),
whereas others have suggested the opposite effect happens and that, in turbulent
environments, innovative dynamic capabilities are less effective (Eisenhardt and Martin,
2000; Schreyögg and Kliesch-Eberl, 2007).
The first objective of this study is to fill gaps in the existing findings by exploring the impact
of innovative dynamic managerial capabilities on the performance and competitive
advantage of the health-care sector in Lebanon. This sector in Lebanon has emerging
challenges after the development of Covid-19. Therefore, the medical centers have to
adapt, to innovate and to change their traditional managerial systems and practices to
survive in the turbulent environment. This study aims to close the existing practical and
theoretical gaps by proposing new dynamic managerial practices for the relevant
stakeholders of the health-care sector in Lebanon.
The second objective of the study consists of revealing if there is any moderating effect of
competitive advantage in the relationship between innovative dynamic managerial
capabilities and performance of the health sector in Lebanon.

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The rest of this paper is organized as follows: Section 2 reviews the theoretical background
and the literature on dynamic managerial capabilities and their effect on competitiveness
and performance. Section 3 presents the data, methodology and conceptual model.
Sections 4 and 5 are dedicated to analyzing and discussing the findings of the study and
include the concluding comments.

2. Literature review
2.1 The new dynamic model of the health-care industry
The future of the health-care sector is becoming consumer-centered care and this future is
now, according to Deloitte’s 2019 global health care consumer survey (Betts and Korenda,
2019). Nowadays, every patient is considered a unique case, arriving with different needs
at different times. It is crucial for health-care leaders to sense changes in consumer
behavior, which is embracing several attitudes and behaviors. Patients are becoming more
demanding, acting independently, seeking more health information, sharing in decisions
related to their health and well-being and evaluating different choices. They are researching
other customers’ reviews and comparing prices and quality of care. Patients’ attitudes
toward their relations with their caregivers are also changing. They are more willing to argue
with their clinicians and are willing to change them if they are not satisfied with their health
plan or service (Betts and Korenda, 2019).
Another important aspect of consumer behavior is the tendency to use technology and
digital tools to seek plans for health and wellness. The consumer is more willing to use
virtual care, medical tools and apps. Furthermore, consumers are willing to share their
health information anonymously for use in the analysis and development of therapies to treat
patients with similar conditions. Thus, consumer behavior is becoming more proactive,
which is influencing the demand for preventive care, healthy diet and exercise plans.
Recently, a wide range of medical apps have been made available in patients’ mobile
medical care devices. Typical examples are those apps that monitor a patient’s pain, blood
glucose or blood pressure levels. If a patient deteriorates, this technology may alert the
patient to ask for help while sending an alert to the caregiver to react fast. The emergence
of mobile medical/health apps has improved patient satisfaction, has saved patients’ time
when visiting doctors and has helped to decrease the geographical and system barriers to
delivering health care (Lu et al., 2018). In 2020, EMarketer reported that more than 87% of
US smartphone users have used health and fitness apps, with a 27% increase from 2019
(Phaneuf, 2020). The health apps market is growing rapidly, and according to Zion Market
Research (2019), the value of this market is forecasted to increase from US$8.0bn in 2018
to around US$111.1bn by 2025.
Not only are consumers seeking more information but hospital physicians also need
immediate information of a patient’s diagnostic results to take decisions. Additionally,
management needs data to make accurate decisions and guide planning. Investing in
innovative health information systems (HIS) is critical to achieve this objective. The
implementation of HIS and electronic medical records (EMR) is fundamental for hospitals,
given the new challenges for hospital managers to gather more information at the
operational level to monitor system efficiency and at the tactic level to support strategic
decision-making. For physicians and health-care providers, these systems provide ready
information on patient diagnoses, histories and case evolutions. HIS and EMR facilitate
information communication and accessibility.
The health-care industry is shifting to a new model of care and value-based payments. At
the same time, hospital leaders are concerned about the increasing cost of health services.
Many factors influence this increase, such as service inefficiencies, technology costs, the
increase in the aging population with the accompanying chronic diseases that need more

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 specialized multidisciplinary care, and emerging infectious diseases such as Covid-19 that
threaten public health.
Health-care leaders are expected to align their strategies to meet those emerging needs,
including changing consumer behavior. They have to use dynamism to balance health-care
institutions’ subsystems with the external environment. Health-care leaders have been urged
to pay attention to internal organizational contextual factors in hospitals to understand their
nature and their dynamic and mutual interaction with the organizational system (Kutz, 2018).
These factors include (but are not limited to) human resources, organizational structure,
internal laws and regulations, customers, technology, services and organizational culture.
Following this, organizational contextual intelligence is a skill that leaders need to align their
actions with objectives to create new strategies, which allow them to adapt to new situations
(Kutz and Bamford-Wade, 2013). A number of studies on leadership have reported evidence
that, when organizations are perceived as successful, others will attribute this performance
to the leaders of the organization (Carpi et al., 2020; Kelley, 1967; Shamir, 1992).
There is a need to develop and improve different managerial capabilities to enable
hospitals to improve outcomes and drive health-care systems forward in an uncertain,
turbulent environment. Scholars have identified the significance of strategic leaders, notably
chief executive officer (CEOs), as a determining factor of organizational performance (Agle
et al., 2006).
Several studies, thus far, have indicated that health-care managers often are under-skilled
with respect to the expected capabilities and responsibilities (Barati et al., 2016). Barati
et al. (2016) carried out a qualitative study to “identify the challenges that hospital managers
face and the skills they must use to overcome these challenges” (Barati et al., 2016, p. 2). In
their study, different managerial skills and capabilities were identified qualitatively, notably
interaction and communication, work experience, knowledge of management,
understanding hospital infrastructure, personality and ethical characteristics, systematic
thinking and problem-solving and motivation and interest. Passionate health-care
professionals who strive to provide safe, high-quality and patient-centered care add a
competitive advantage to their organizations (Huselid et al., 1997), as human capital can be
a competitive advantage (Al-Zyoud and Mert, 2019).
As explained by contingency theory, researchers follow a systematic approach to identify
the organizational ailment and prescribe the cure (Morgan, 1997). Contingency theory
highlights that effective organizations, such as hospitals, succeed in attaining a good fit
internally and externally. Internal organizational fit occurs when organizations achieve
alignment between different elements, namely, use strategy (defender vs prospector), use
technology, employ people, dominant culture, organizational structure and dominant
managerial style. External fit lies in the ability of the organization to adapt its internal
subsystems to its external environmental conditions. Achieving this internal and external
balance is one major strategic task facing top management. There are three main
typologies across the continuum: defender, analyzer and prospector.
Any organization that falls within these three typologies is considered successful, as long as
there is congruence between its subsystems and the environment. However, if subsystems
are incongruent, the organization will struggle to sustain its position within the industry
(Morgan, 1997).

2.2 Innovative dynamic capabilities: a basic source of performance and competitive

advantage
How businesses create and sustain a competitive advantage is of particular concern in the
strategic management discipline. According to the resource-based view (RBV), for an
organization to gain a competitive advantage, it should own resources that are

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simultaneously valuable, rare, inimitable and non-substitutable (Barney, 1991, 1995). The
foundation of RBV is the fact that a firm’s resources are heterogeneous, which enables it to
survive over time. However, this theory focuses on how organizations are able to gain
enormous earnings and profits when the environment is static (Barney, 2001a, 2001b;
Lockett et al., 2009). What about organizations that are working in a turbulent and changing
environment? This is the focus of the dynamic capabilities view (DCV), which considers how
to create future resources or modify the current valuable stock of resources determinedly
and overtime in a rapidly changing environment (Teece et al., 1997).
The organization that has the potential to systematically reconfigure its resources and
capabilities and to efficiently make timely decisions in line with the recognized opportunities
and environmental changes can create and sustain a competitive advantage (Teece, 2012;
Li and Liu, 2014). Hence, the innovative dynamic capability view is capturing special
attention from practitioners and scholars, as it exceptionally focuses on how firms develop
and sustain competitive advantage (Shams et al., 2020; Ambrosini and Bowman, 2009).
DCV was introduced by David Teece as a new strategic management lens. From this
perspective, Teece et al. (1997) emphasized the need of an organization to enhance their
internal and external skills and resource deployment to address rapidly changing
environments in which there is deep uncertainty (Teece et al., 1997, p. 510). These
capabilities are unique to the organization and they are part of its daily routine (Winter,
2003). They are also difficult to emulate, creating a competitive advantage in different firms.
According to Teece et al. (1990, p. 11), for dynamic capabilities, it is not only the bundle of
resources that matter, but the mechanisms by which firms learn and accumulate new skills
and capabilities, and the forces that limit the rate and direction of this process. The
emphasis of their view is that successful organizations are those that are able to establish
“timely responsiveness and rapid and flexible product innovation, along with the
management capability to effectively coordinate and redeploy internal and external
competencies” (Teece and Pisano, 1994, p. 537). Therefore, the role of strategic
management is mainly to consider the changes in the external environment and how to
adapt, integrate and reconfigure internal and external organizational resources and skills to
cope with these changes. This explains why many organizations failed when their
environment changed, as they were unable to effectively adapt to change (Harreld et al.,
2007).
Teece (2007) stated that dynamic capabilities are built on three pillars, namely, sensing;
seizing; and reconfiguring. Sensing capacity refers to the process of sensing and
interpreting stimuli of change in the organization’s environment to recognize new
opportunities and potential threats. Zahra and George (2002a) point out that sensing
capacity is a crucial strategic skill for organization survival in the changing environment.
Seizing is the ability of the organization to raise resources and take advantage of the
opportunities and deal with the threats it has identified. Reconfiguring allows an
organization to organize new and old resources to achieve maximum value. These activities
are on the management foresight.
In effect, much of the recent research on dynamic capabilities has directed attention to
managerial leadership skills (Teece, 2016; Ambrosini and Bowman, 2009) and the role of
managers in transforming an organization’s resources implicated in the change, which are
needed to develop a competitive advantage (Ambrosini and Altintas, 2019; Adner and
Helfat, 2003).
Rehman and Saeed (2015) studied the impact of dynamic capabilities on a firm’s
performance with a moderating role of organizational competencies. They surveyed
professionals and top and middle level managers of five medium-sized organizations, and
40 small organizations working in the Paper sector in Lahore, Pakistan. Their study
suggests that there is an indirect relationship between dynamic capabilities and firm

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 performance. According to the study, although dynamic capabilities do not directly build up
an organization’s sustainable competitive advantage, these capabilities contribute to its
performance by combining, reallocating and renewing its competencies. Their study
speculated that dynamic capabilities influence organizations’ performance in either a highly
dynamic or static environment.
DCV recognizes senior managers as the principal players in an organization, responsible
for anticipating the need for and driving change in the business environment where there is
great uncertainty (Augier and Teece, 2009). Likewise, Daft et al. (1988) stated that, in
uncertain environments, organizations performed much better when their CEOs frequently
and widely scanned their business environment. It has been argued that top managers’
dynamic managerial capabilities is one of the most critical factors in long-term competitive
advantage and the likelihood of business survival (Helfat and Martin, 2015; Zhang, 2007).
On the other hand, economic literature has little to say about the roles of manages,
entrepreneurs and leaders and instead of classical economic theories has ignored their
value creating role and considers management as:
[. . .] a passive calculator that reacts mechanically to changes imposed on it by fortuitous
external developments over which it does not exert, and does not even attempt to exert, any
influence [. . .]. One does not hear of them because there is no way in which they can fit into the
model. (Baumol, 1968, p. 67)

In recent times, the empirical research of Guajardo Treviño and Zapata Cantu  (2019), which
was conducted over a three-year period, suggests a non-linear relationship between
dynamic capabilities and competitive advantage. The study tested two specific dynamic
capabilities – alliance management capability and new product development capability –
for their effects on competitive advantage in different dynamic environments. Their study
was based on longitudinal data collected from 279 firms. The results support that the
strongest effect of the tested capabilities is strongly associated with a moderately dynamic
environment. This relation was found to be weaker in both high and low dynamic
environments.
To attain sustained competitive advantage, Covin and Slevin (1991) revealed that a
dynamic entrepreneurial organization has to consider the following essential components,
namely, sensing opportunities and threats; seizing these opportunities; and finally
reconfiguring organization resources (Helfat and Martin, 2015). The performance of an
organization that operates within a highly turbulent environment is found to be higher in
organizations underpinned by a less formal hierarchical, organic structure that allows
flexibility than a conventional organizational structure (Burns and Stalker, 1961). Likewise,
research suggests that motivated, committed and creative employees can only fit in an
organic organization structure (Morgan, 1997).
The dynamic managerial capabilities are considered the right tool for achieving congruence
between organizational skills and environmental change (Helfat and Martin, 2015).
Organizational environment unfolds dynamic managerial capabilities, accordingly, and
evolving work environments can guide and promote these capabilities (Corrêa et al., 2019).
This view is supported by Fainshmidt et al. (2017), who asserted that the more dynamic the
industry is in a current organization, the more likely it is to develop stronger asset
management capabilities and to outperform during a crisis.
To summarize, in times of change, ordinary capabilities that deal with best practice and
doing the right thing to pursue efficiency may not be enough for differentiation and building a
competitive advantage, whereas dynamic capabilities that entail a constant assessment of
the business environment to chase opportunities may be the right option for organizations.
Table 1 provides basic differences between ordinary and dynamic capabilities.

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 Table 1 Differences between ordinary and dynamic capabilities
Ordinary capabilities Dynamic capabilities

Purpose Technical efficiency in business Congruence with customer needs and

function with technological and business
opportunities
Tripartite schema Operate, administrate and govern Sense, seize and transform
Key routines Best practices Signature (upgraded) processes
Managerial emphasis Cost control Entrepreneurial asset orchestration,
leadership and learning
Priority Doing things right Doing the right things
Imitability Relatively imitable Inimitable
Result Technical fitness (static Evolutionary fitness (ongoing learning,
efficiency) capability enhancement and alignment)
Source: Adapted from Teece (2014)

Published studies on dynamic managerial capabilities outline three fundamental elements

of this construct, namely, human capital, social capital and managerial cognition (Adner
and Helfat, 2003). These three elements, whether combined or not, affect both the strategic
and operational decisions of managers. Furthermore, those elements help managers to
adapt to environment changes, which are often unpredictable (Buil-Fabregà et al., 2017),
such as the current Covid-19 pandemic.

2.2.1 Human capital. Human capital is the set of expertise and on the job training and
acquired knowledge that managers develop over time (Becker, 1964). The diversity of
human capital elements shapes decision-making and differentiates how different teams or
managers perform, even when faced with the same challenges (Helfat and Martin, 2015).
Diverse and complementary human capital positively impacts the performance of the
organization, emphasizing the importance of collective management (Wright et al., 2014). In
other words, being in a generic form or unique to a specific function, industry, technology or
team knowledge can underpin managerial human capital and benefit the organization
(Helfat and Martin, 2015).

2.2.2 Social capital. Social capital is a set of common values that enables individuals to
work together as part of a group to effectively achieve a common objective. Putnam (2000)
highlights the importance of social capital in building relationships of trust and collaboration,
resulting in a supportive environment for the collective. In addition, social capital
corresponds to managers’ personal and business relationship networks, both inside and
outside the company, that are critical to the organization’s access to a channel of
information and resources that can be helpful to sense new opportunities (Blyler and Coff,
2003; Adner and Helfat, 2003). To illustrate, social connections and networks outside the
organization may provide access to resources, such as funding and qualified personnel,
required for investments to seize opportunities. Moreover, a social status or position can
render power over resources (Bailey and Helfat, 2003; Castanias and Helfat, 1991, 2001).

2.2.3 Cognitive capital. Cognitive capital consists of a set of mental processes or models,
also known as knowledge structures (Eggers and Kaplan, 2013) and emotions (Hodgkinson
and Healey, 2011) that construct and direct decision-making by using the right information
and knowledge in a certain context. Cognitive capital is related to the acquisition and
processing of information and is strongly interconnected to an individual’s beliefs and
knowledge. How individuals acquire and process information may be different in ways that
are not limited to perception, learning, memory, problem-solving and reasoning (Sternberg,
2006).

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 2.3 Applying innovative dynamic capabilities during the Covid-19 pandemic
During the Covid-19 pandemic, all health professionals, such as physicians, nurses and
other health staff, are risking their personal health and well-being each time they are
exposed to a positive Covid-19 patient. They are most likely to be infected because of their
continuous close contact with positive Covid-19 patients (Delgado et al., 2020). Multiple
approaches have been recommended by various bodies to help protect frontline health-
care workers. The common approach has been social distancing and using PPE. However,
not all health professionals were able to access enough PPE because, at the beginning of
the pandemic, there was a lack of suitable PPE (Catton, 2020) in the supply chain. Studies
have indicated that when proper PPE is available and people adequately social distance,
transmission rates are significantly reduced, protecting health professionals’ lives (Ehrlich
et al., 2020). Another method to reduce infection between health-care workers and patients
is to administer Povidone-iodine disinfectant to the nasal cavity and use it as a mouthwash
(Kirk-Bayley et al., 2020).
In addition, the Covid-19 crisis forced hospitals and health-care professionals to adopt
innovative technological solutions for their daily patient care. Some innovative technological
approaches are used to protect health-care professionals while providing care, such as
telemedicine, via phone or the internet, to patients at home without requiring them to visit a
clinic and exposing health-care professionals to the risks of being infected by Covid-19
(Delgado et al., 2020). Moreover, an integrated and unified hospital-wide HIS is necessary
to bridge the gap and accelerate the ability of professionals to access patient information in
different settings, such as in-patient, ambulatory or home health-care settings. Nurses using
technology solutions to rapidly assess patients unable to go to the hospital is another
example of the importance of adopting innovative technologies during this crisis. For
example, different hospitals are using dashboards to facilitate the exchange of information
about patients and available beds and respirators to accelerate patient transfers from one
hospital to another. Another typical example is the use of telemetry devices connected to
central stations to remotely monitor Covid-19 patients’ vital signs to decrease the risk of
nurses and doctors having direct contact with infected patients. Many hospitals use tablets
to share live videos of Covid-19 patients with their loved ones.
Human resources management is also at the heart of the digital transformation in hospital
practices during the Covid-19 pandemic. Employees need to acquire the skills to use the
new technologies (Sheppard, 2020). Moreover, digital platforms that enable remote and
virtual work must be adopted.
In the hyper-uncertain environment surrounding hospitals during Covid-19, health-care
leaders should keep a close eye on technological innovation and threats to supplies. They
should chase new information to analyze the situation and deploy suitable strategies in a
timely manner to improve financial and non-financial performance (NFP). Thus, this study
aims to determine the relationship between innovative dynamic managerial capabilities and
organization financial and NFP:
H1. Innovative dynamic managerial capabilities have positive impacts on the financial
performance (FP) of the health-care sector, specifically:
H1a. Sensing has a positive impact on the FP of the health-care sector.
H1b. Seizing has a positive impact on the FP of the health-care sector.
H1c. Reconfiguration has a positive impact on the FP of the health-care sector.
H2. Innovative dynamic managerial capabilities have positive impacts on the NFP of the
health-care sector, specifically:
H2a. Sensing has a positive impact on the NFP of the health-care sector.
H2b. Seizing has a positive impact on the NFP of the health-care sector.

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 H2c. Reconfiguration has a positive impact on the NFP of the health-care sector.
With the Covid-19 crisis and the associated risks of resource availability, internal strengths
and external opportunities, the ordinary capabilities of hospital administrations to develop
strategies may be unable to support them anymore or may even become obstacles for
further development. Thus, hospitals should ensure the right direction by sensing the
environment, mobilizing resources in time and implementing innovative adjustments
dynamically to reach a competitive advantage. Therefore, this study also seeks to answer
what is the effect of implementing dynamic capabilities on competitive advantage:
H3. Innovative dynamic managerial capabilities have a positive impact on the
competitive advantage of the health-care sector, specifically:
H3a. Sensing has a positive impact on the competitive advantage of the health-care
sector.
H3b. Seizing has a positive impact on the competitive advantage of the health-care
sector.
H3c. Reconfiguration has a positive impact on the competitive advantage of the health-
care sector.
Developing dynamic capabilities impacts the achievement of long-term performance by
continuously providing products or services to the customer that offer higher competitive
advantages. In this study, during Covid-19, does innovative competitive advantage have a
moderating effect on the relationship between performance and dynamic managerial
capabilities?
H4. Innovative competitive advantage has a moderating effect on the relationship
between performance and dynamic managerial capabilities, specifically:
H4a. Competitive advantage has a moderating effect on the relationship between NFP
and dynamic managerial capabilities.
H4b. Competitive advantage has a moderating effect on the relationship between FP and
dynamic managerial capabilities.

3. Research methodology
3.1 Sample definition and characteristics
Primary data for this research were collected from the medical sector in Lebanon. All the
hospitals and medical centers were considered for this research. The Ministry of Public Health in
Lebanon provided the database of addresses and contact details. There are 29 public and 111
private hospitals in Lebanon, for a total of 140. Out of those, we chose 14 public hospitals and
60 private hospitals for the study. The objective is to focus on human behavior and personnel
interaction in the hospitals that receive Covid-19 cases. Finally, from the 74 hospitals we
contacted, only 48 agreed to complete the survey and data collection. The 48 health facility
centers cover all the Lebanese regions, the details of which are provided in Table 2.
The study sample consists of 2 different groups extracted mainly from the 48 hospitals that
accepted to complete the survey. The first group is composed of top-level managers
(medical directors, administrative directors and CEOs). The second group is composed of

Table 2 Sample of study by regions in Lebanon

Regions of medical center Akkar Baalbeck-Hermel Beirut Bekaa Mount Lebanon North Lebanon Nabatiyeh South Lebanon

Number 2 3 6 5 15 7 6 4
% 4.17 6.25 12.50 10.42 31.25 14.58 12.50 8.33

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 physicians, nurses and administrative employees. A total of 69 executive managers and
215 non-executive employees provided information to the study (Figure 1). Focusing on
employees from different hierarchical lines enabled us to test the theory of dynamic
managerial capabilities by providing evidence on whether the dynamic managerial
practices have an impact on the FP of the Lebanese hospitals.
Table 3 presents the demographic data of the 284 respondents. The majority of the
respondents were female (58.1%). Most of the respondents (83.45%) had more than five
years of experience. The majority of the respondents (60.92%) were between 30 and
50 years old. Out of the 284 respondents 36% were physicians, 22.18% were nurses and
41.2% administrative employees.

3.2 Methodology and defining variables

A total number of 284 questionnaires were distributed and filled in by executive and non-
executive employees in 48 hospitals. The questionnaire was divided into three sections. The
first section focused on the demographic characteristics of the study’s sample. The second
section was related to the independent variable, which is the dynamic managerial practices
of the Lebanese health-care sector. Finally, the third part of the questionnaire was related to

Figure 1 Sample of study by hierarchical level

69 Top Line Managers

(director, CEO)

215 Operaonal Employees

(physicians, nurses and administrave
employees)

Sample Size = 284

Table 3 Characteristics of the sample

Item description Item description Frequency (%)

Gender Female 165 58.10

Male 119 41.90
Work experience Less than five years 47 16.55
Between 5 and 10 years 77 27.11
Between 10 and 20 years 83 29.23
More than 20 years 77 27.11
Age Between 20–30 years 27 9.51
Between 30–40 years 81 28.52
Between 40–50 years 92 32.39
Between 50–60 years 41 14.44
More than 60 years 43 15.14
Designation Physicians 104 36.62
Nurses 63 22.18
Administrative employees 117 41.20

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the dependent variables, which are the implications of dynamic managerial capabilities
mainly on the health-care sector’s competitive advantage and performance.
The research framework consists of studying the direct impact of dynamic managerial
practices on the FP and NFP of the health-care sector during the Covid-19 period.
Moreover, this research seeks to reveal the impact of dynamic managerial practices on the
competitive advantage of the health-care sector during the Covid-19 period. In the last
phase, the study tests the indirect impact of dynamic managerial practices on the
performance of the health-care sector through its competitive advantage (Figure 2).
To achieve the objective of this study, the construct of dynamic managerial practices was
measured with three variables, namely, sensing (SEN), seizing (SEI) and reconfiguration
(REC). The definitions of these variables originate from dynamic managerial theory and
previous empirical studies.
Sensing and seizing were each measured with six items, using a five-point Likert scale that
ranged from strongly agree to strongly disagree. Reconfiguration was measured with eight
items, also using a five-point Likert scale that ranged from strongly agree to strongly
disagree. Table 4 presents the different items in each independent variable, based on
Teece’s (2007) instructive proposal and other proposals from Eisenhardt and Martin (2000),
Zollo and Winter (2002), Zahra and George (2002a) and Kindström et al. (2013).
The construct of competitive advantage (CA) was measured by rating five items on a five-
point Likert scale, ranging from strongly agree to strongly disagree. Based on Porter’s
(1985) instructive model, the five items of competitive advantage are, namely, improving
quality (CA1), speed of product delivery (CA2), market share (CA3), pricing (CA4) and
introducing new services and products (CA5).
The construct of NFP was measured by rating three items on a five-point Likert scale,
ranging from very high performance level to very low performance level. The NFP items
used in this research are reputation level (NFP1), level of customer satisfaction (NFP2) and
level of customer retention (NFP3). These non-financial items were selected from the
literature review and empirical studies (Tempelmayr et al., 2019; Schilke, 2014).
Finally, the construct of FP was measured by rating five items on a five-point Likert scale,
ranging from very high performance level to very low performance level. The five items used
to measure the level of FP are growth in sales (FP1), growth in return on investment (FP2),
profit margin (FP3), growth in return on assets (FP4) and return on equity (FP5). Only the
top-level managers were required to fill in this part of the questionnaire because they are
the most familiar with financial data. This subjective method of FP evaluation is used by
many researchers to avoid a low level of responses.

Figure 2 Research framework

Dynamic Managerial Practices

Financial
Sensing Seizing
Performance
Non-Financial
Reconfiguration

Competitive advantage

j FORESIGHT j
 Table 4 Dynamic managerial practice variables
Dynamic managerial practices Items Source

Sensing 1. Identifying customer types (SEN1) 1. Teece (2007)

(SEN) 2. Identifying customer needs (SEN2) 2. Teece (2007)
3. Good networking (SEN3) 3. Teece (2007)
4. Looking for new external cooperation (SEN4) 4. Teece (2007)
5. Developing new thinking (SEN5) 5. Eisenhardt and Martin (2000)
6. Accumulating knowledge (SEN6) 6. Zollo and Winter (2002)
Seizing 1. Developing new processes and services (SEI1) 1. Teece (2007)
(SEI) 2. Developing actions based on customers’ feedbacks (SEI2) 2. Kindström et al. (2013)
3. Focusing on efficient management and functions (SEI3) 3. Teece (2007)
4. Creating, adapting and improving the business model (SEI4) 4. Teece (2007)
5. Investing in technology and design to reach the market (SEI5) 5. Teece (2007)
6. Taking and integrating new strategic decision (SEI6) 6. Zahra and George (2002)
Reconfiguration (REC) 1. Decentralizing decisions and activities (REC1) 1. Teece (2007)
2. Managing with flexibility (REC2) 2. Teece (2007)
3. Integrating and sharing knowledge (REC3) 3. Teece (2007)
4. Redistributing assets (REC4) 4. Teece (2007)
5. Using created knowledge (REC5) 5. Zahra and George (2002)
6. Supporting employees for customers services (REC6) 6. Kindström et al. (2013)
7. Rewarding service-oriented employee (REC7) 7. Kindström et al. (2013)
8. Communicating and cooperating interdepartmentally (REC8) 8. Kindström et al. (2013)
9. Generating new proposals and developing processes to alter 9. Zollo and Winter (2002)
existing routines (REC9)

In this study, the quantitative approach was used to reveal the impact of dynamic
managerial capabilities on the competitive advantage in the health-care sector in Lebanon
(Figure 2). The first phase consists of testing the consistency and the reliability of each item
in the three different constructs, namely, performance; competitive advantage; and
dynamic managerial capabilities. The second phase includes analyzing the descriptive
statistics and testing the hypotheses through structural equation modeling (SEM).

4. Findings and discussion

4.1 Descriptive statistics
Table 5 shows the descriptive statistics and the correlation matrix among the different
variables of this research. The results, presented in Table 5, indicate that the health-care
sector in Lebanon is implementing dynamic managerial capabilities. The mean values of SEN,
SEI and REC are 3.73, 3.51 and 3.03, respectively. The performance indicators of the health-
care sector in Lebanon are not totally convergent. The mean values of competitive advantage
and NFP are high (3.28 and 3.92), while the mean value of FP is relatively low (2.36).
The correlation matrix indicates that there is a positive and significant correlation between
the different constructs of dynamic managerial capabilities in the Lebanese health-care

Table 5 Descriptive and correlation results

Variable Mean SD SEN SEI REC CA NFP FP

SEN 3.73 1.63 1

SEI 3.51 1.47 0.847 1
REC 3.03 1.35 0.742 0.792 1
CA 3.28 1.41 0.876 0.843 0.726 1
NFP 3.92 1.74 0.648 0.675 0.866 0.803 1
FP 1.96 1.23 0.563 0.622 0.588 0.756 0.831 1
  
Notes: p < 0.05; p < 0.01; p < 0.001

j FORESIGHT j
sector. This result indicates the interdependency between the three constructs of dynamic
managerial capabilities in the Lebanese health-care sector. Moreover, the results in Table 5
show a positive and significant correlation between the dynamic managerial capabilities
constructs and the competitive advantage of the health-care sector. Likewise, the results
show a positive and significant correlation between NFP of the health-care sector and the
first construct of dynamic managerial capabilities (sensing, SEN). Only FP has no significant
correlation with the different constructs of dynamic managerial capabilities.
Table 6 shows the descriptive analysis (mean and standard deviation) of each item of the
dependent and independent variables of this research. The results of the different items of
the sensing (SEN) variable indicate that the health-care sector accumulates knowledge
(Item#6), has good networking (Items#3&4) and is very aware about customer types and
needs (Items#1&2). The weak point of this construct is the low level of new thinking
development (Item#5).
The results of the second construct of dynamic managerial capabilities (seizing, SEI) show
that the health-care sector in Lebanon is using customer feedback (Item#2) to develop new
strategies (Item#6) and new services (Item#1). Moreover, the health-care sector invests in
technology (Item#5), focuses on efficient management processes (Item#3) and is able to
modify its business plan (Item#4) to reach its goals.
The results of the third construct of dynamic managerial capabilities (reconfiguration, REC)
indicate that not all the hospitals in Lebanon are able to decentralize (Item#1), change
existing routines (Item#9), be flexible (Item#2) and pay attention to the reward system
(Item#7). Moreover, they do not have high levels of interdepartmental communication and
cooperation (Item#8). On the opposite side, the hospitals are able to redistribute their
assets and align themselves with their strategies (Item#4). They integrate, share and use
the created knowledge (Items#3&5). Finally, they support employees to improve customer
services and customer satisfaction levels (Item#6).
The Lebanese health-care sector is characterized by high levels of competitive advantage.
The mean values of improving quality (Item#1), speed of product delivery (Item#2), market
share (Item#3), pricing (Item#4) and introducing new services and products (Item#5) are
3.12, 3.53, 3.25, 3.46 and 3.38, respectively.
The non-financial indicators have high level of performance. The mean values of reputation
level (Item#1), customer satisfaction (Item#2) and customer retention (Item#3) are 3.32, 4.12
and 3.78, respectively. On the opposite side, the level of FP of health-care sector is less than
the average except for the profit margin level. The average values of growth in sales (Item#1),
growth in return on investment (Item#2), profit margin (Item#3), growth in return on assets
(Item#4) and return on equity (Item#5) are 1.93, 1.56, 3.32, 1.42 and 1.48, respectively.

Table 6 Descriptive results of items in each variable

Construct ! SEN SEI REC CA FP NFP
Item # ; Mean SD Mean SD Mean SD Mean SD Mean SD Mean SD

1 4.21 1.84 3.45 1.44 2.62 1.33 3.12 1.12 1.93 1.52 3.32 1.24
2 4.07 1.72 4.11 1.62 2.45 1.22 3.53 1.44 1.56 1.45 4.12 1.73
3 3.41 1.42 3.24 1.35 3.12 1.51 3.25 1.21 3.32 1.22 3.78 1.64
4 3.37 1.35 3.08 1.25 3.53 1.66 3.46 1.41 1.42 1.35
5 2.56 1.12 3.32 1.42 3.22 1.32 3.38 1.32 1.48 1.32
6 3.71 1.58 3.22 1.35 3.62 1.53
7 2.67 1.41
8 2.73 1.52
9 2.65 1.24

j FORESIGHT j
 4.2 Hypotheses test

4.2.1 Confirmatory factor analysis. To achieve the objective of this study and before testing
the different hypotheses, the confirmatory factor analysis was used to test the validity and
reliability of the items used to measure the constructs of competitive advantage,
performance and dynamic managerial capabilities. The results in Table 7 show that
Cronbach’s alpha coefficient for all variables is greater than 0.821, which reveals that all the
items in each construct are internally consistent and reliable.
The results in Table 7 show that the values of composite reliability (CR) range between
0.849 and 0.937. The results of the average variance extract (AVE) range between 0.758
and 0.892. All the constructs have good levels of CR and AVE, as they are above 0.5, the

Table 7 Items and constructs evaluation tests

Variable Factor loads CR AVE Cronbach’s a

Construct#1: Sensing (SEN) 0.892 0.758 0.831

SEN1 0.842
SEN2 0.768
SEN3 0.856
SEN4 0.772
SEN5 0.858
SEN6 0.823
Construct#2: Seizing (SEI) 0.861 0.798 0.859
SEI1 0.766
SEI2 0.762
SEI3 0.777
SEI4 0.761
SEI5 0.821
SEI6 0.833
Construct#3: Reconfiguration (REC) 0.849 0.763 0.823
REC1 0.832
REC2 0.773
REC3 0.782
REC4 0.715
REC5 0.692
REC6 0.855
REC7 0.774
REC8 0.769
REC9 0.784
Construct#4: Non-financial performance (NFP) 0.877 0.748 0.821
NFP1 0.812
NFP2 0.878
NFP3 0.865
Construct#5: Financial performance (FP) 0.937 0.892 0.901
FP1 0.865
FP2 0.883
FP3 0.715
FP4 0.844
FP5 0.754
Construct#6: Competitive advantage (CA) 0.912 0.870 0.844
CA1 0.857
CA2 0.845
CA3 0.866
CA4 0.776
CA5 0.792

j FORESIGHT j
minimum required threshold, defined by Hair et al. (2012). Therefore, all the items in each
construct should be maintained.
4.2.2 Structural equation modeling. This research uses SEM to test the different hypotheses
of this study. The SEM is a simultaneous analysis of the causal relationship between the
observed implicit and explicit variables.
The predictive relevance and validation of SEM is assessed by using different indicators
such as (X2/d), Root Mean Square of Approximation (RMSEA), Root Mean Square of
Residuals (RMR), Standard Root Mean Square Residual (SRMR), Incremental Fit-Index (IFI),
Fitness of Extracted-Index (NFI) and Non Normal Fit-Index (NNFI) (Du Toit and Du Toit,
2008). The values in Table 8 indicate that the SEM model has the goodness of fit indices.
The results of the different indicators are within the standard accepted values.
The results in Table 9 and Figure 3 show the impact of dynamic managerial capabilities on
the competitive advantage, FP and NFP of Lebanon’s health-care sector. Moreover, they
indicate the indirect impact of dynamic managerial capabilities on the performance of
health-care through competitive advantage.

4.3 Dynamic managerial practices and financial performance

The results of the SEM model in Table 9 reveal the absence of a significant impact of all the
dimensions of dynamic managerial capabilities on the FP of Lebanon’s health-care sector.
The impact of the three variables, sensing (SEN), seizing (SEI) and reconfiguration (REC), is
positive and non-significant. Therefore, H1a–H1 c are not supported.
Due to Covid-19, the Lebanese health-care sector is facing financial challenges. The medical
restrictions, the economic recession, the confinement and the difficulties in transportation have

Table 8 Fit indices of SEM model

Indices Value Accepted value

Chi-square 86.28(p < 0.05) Greater than 0.05

Absolute value of the residuals (Chi-square/df) 1.401 Less than 3
Root mean square of approximation (RMSEA) 0.018 Less than 0.1
Root mean square of residuals (RMR) 0.092 Close to 0.1
Standard root mean square residual (SRMR) 0.073 Close to 0
Incremental fit index (IFI) 0.967 0.9 minimum
Fitness of the extracted (NFI) 0.988 0.9 minimum
Non-normal fit index (NNFI) 0.972 0.9 minimum

Table 9 Results of SEM model

Hypothesis Structural path Path coefficient t-value p-value Conclusion

H1a Sensing ! financial performance 0.11 0.29n.s. 0.312 Not supported

H1b Seizing ! financial performance 0.21 0.35n.s. 0.390 Not supported
H1c Reconfiguration ! financial performance 0.15 0.31n.s. 0.365 Not supported
H2a Sensing ! non-financial performance 0.17 2.56 n.s. 0.229 Not supported
H2b Seizing ! non-financial performance 0.32 2.93 0.000 Supported
H2c Reconfiguration ! non-financial performance 0.26 2.38 0.001 Supported
H3a Sensing ! competitive advantage 0.33 2.42 0.000 Supported
H3b Seizing ! competitive advantage 0.46 3.92 0.000 Supported
H3c Reconfiguration ! competitive advantage 0.24 2.01 0.001 Supported
H4a Competitive advantage ! financial performance 0.09 0.18n.s. 0.346 Not supported
H4b Competitive advantage ! non-financial performance 0.48 4.21 0.001 Supported
Notes:  p < 0.05;  p < 0.01;  p < 0.001, n.s.: non-significant

j FORESIGHT j
 Figure 3 SEM model analysis

SEN1

SEN2 0.84
0.8
84 FP1
0.76 0.86
SEN3 0.88 FP2
0.85

SEN4 0.77 0.11

Financial 0.71
Sensing (SEN) FP3
performance (FP)
0.85
0.84
SEN5
0.82 FP4
0.75
SEN6
FP5
0.33

REC1
0.17 0.09
REC2
0.83
0 .8
0.77 CA1
REC3
0.85
0.78 0.15
CA2
REC4 0.84
0.71
Reconfiguration 0.24 Competitive 0.86
0.69 CA3
REC5 (REC) Advantage (CA)
0.77
0.85
0.26 CA4
REC6
0.79
0.77
REC7 CA5
0.76

REC8 0.78
0.48
0.21
REC9

SEI1 0.46
0.76

SEI2 0.81 NFP1

0.76
Non-Financial
SEI3 0.77 Seizing (SEI) 0.32 0.87 NFP2
performance
0.76 (NFP) 0.86
SEI4 NFP3
0..82
0.82
0.83
SEI5

SEI6

decreased the operational level of health-care services. In addition, the huge increase in Covid-
19 patients has threatened the intensive care units and increased the cost associated with
caring for those patients. Nowadays, the most profitable services in hospitals, such as
cardiovascular and diabetes treatment departments, are heavily affected. The outpatient
departments are closed, and elective services and visits are canceled. The World Health
Organization-WHO (2020) argues that the pandemic has completely or partially disrupted the
health-care sector in many countries, which has lowered the occupancy rate and the financial
profitability. Thus, the financial contribution of dynamic managerial practices has been marginal
during the Covid-19 period, as there is an absence of any significant impact of sensing (SEN),
seizing (SEI) and reconfiguration (REC) on the FP of health-care sector in Lebanon.

4.4 Dynamic managerial practices and non-financial performance

On the opposite side, the results in Table 9 show the partial positive impact of dynamic
managerial capabilities on the NFP of the health-care sector in Lebanon during the Covid-
19 period. The results reveal a positive and significant impact of seizing (SEI) on the FP of
the health-care sector. The coefficient causal pathway from seizing (SEI) to NFP is þ0.32.
In addition, the results presented in Table 9 show that the NFP of the Lebanese health-care
sector is positively and significantly affected by reconfiguration (REC). The coefficient
causal pathway from reconfiguration (REC) to NFP is þ0.26
However, the results do not indicate any significant impact of sensing (SEN) on the NFP of
the Lebanese health-care sector. The pathway between sensing (SEN) and NFP is positive
but non-significant.

j FORESIGHT j
Therefore, H2b and H2c are supported, while H2a is not supported. These results
indicate that health-care sector managers can benefit from two different innovative
managerial practices to improve the NFP of the health-care sector during a crisis
period, such as the Covid-19 pandemic. They should develop, adapt and innovate
the health-care services and processes. Mangers also must invest in new
technology to improve their business reaction based on customer feedback. They
have to be more flexible, cooperative and good communicators by sharing new
knowledge and applying decentralized decision-making.
During Covid-19, health-care institutions that have used innovation, communication and
new managerial practices have effectively faced the challenge and increased their
reputation and customer satisfaction.

4.5 Dynamic managerial practices and competitive advantage

The results of the SEM model reveal a positive and significant impact of the three constructs
of dynamic managerial capabilities on the competitive advantage of the health-care sector
in Lebanon. The path coefficient from sensing (SEN) to competitive advantage is þ0.33.
This positive and significant pathway indicates that sensing (SEN) has a direct positive
impact on competitive advantage in the Lebanese health-care sector.
The results in Table 9 show that the competitive advantage of health-care institutions is
positively and significantly affected by seizing (SEI). The coefficient causal pathway from
seizing (SEI) to competitive advantage is þ0.46. This variable has the highest impact on the
competitive advantage of the Lebanese health-care sector.
Finally, the results reveal a positive and significant impact of reconfiguration (REC) on the
competitive advantage of the Lebanese health-care sector. The coefficient causal pathway
is þ0.24 from reconfiguration (REC) to competitive advantage.
Therefore, H3a–H3c are highly supported. Thus, practicing innovative managerial skills
leads to an increase in the competitive advantage of health-care institutions during a very
critical period, such as the Covid-19 pandemic.
Despite the challenges, the financial and non-financial difficulties due to Covid-19, many
health-care institutions have succeeded in competing and maintaining their market share by
identifying customer needs and developing innovative managerial decisions. Mangers in
the health-care sector have to stay close to their customers and their employees. They
should innovate, re-allocate their assets, redesign their organizational system, reduce
managerial complexity and cut unnecessary costs during uncertainty.

4.6 The moderating role of competitive advantage on the relationships between

dynamic managerial practices and non-financial performance
The results in Table 9 reveal a moderating impact of competitive advantage on the relationship
between NFP and dynamic managerial capabilities. The coefficient causal pathway from
competitive advantage to NFP is positive (þ4.21) and significant. Therefore, we confirm H4a,
“competitive advantage has a moderating effect on the relationship between FP and dynamic
managerial capabilities.” The application of innovative managerial practices increases the
competitive advantage, which can improve, in return, the NFP of the Lebanese health-care sector.
Covid-19 has triggered new challenges in the Lebanese health-care sector, which can lead
managers and owners to apply new managerial and commercial strategies. They have to
adapt their visions and their operational systems to deal with the existing uncertainty. They
should maintain their market share by focusing on innovative services based on health
technology and new digital health interfaces.

j FORESIGHT j
 The result of the SEM model also reveals the absence of a significant impact of competitive
advantage on FP. The moderating effect of competitive advantage between FP and
dynamic managerial capabilities cannot be supported. The coefficient causal pathway from
competitive advantage to FP is positive and non-significant. Therefore, we reject H4b,
“competitive advantage has a moderating effect on the relationship between FP and
dynamic managerial capabilities.” This result is in line with the direct relationship between
FP and dynamic managerial capabilities. Despite the importance of dynamic managerial
practices and competitive advantage for the health-care sector, their impacts are marginal
on FP during the Covid-19 pandemic period.

5. Conclusion
This study suggests that health-care organizations working in the highly uncertain environment of
the Covid-19 pandemic should invest in dynamic managerial capabilities to improve their
performance and gain a competitive advantage. The results of our SEM model show that the three
dimensions of dynamic managerial capabilities (sensing, seizing and reconfiguration) have a
positive and significant impact on the competitive advantage of Lebanon’s health-care sector
during the Covid-19 pandemic. Moreover, our findings indicate a positive and significant impact of
dynamic managerial capabilities on the NFP of Lebanon’s health-care sector. Finally, this study
reveals that competitive advantage has a positive moderating effect on the relationships between
the three dimensions of dynamic managerial capabilities and NFP. The variables of dynamic
managerial capabilities have no direct or indirect impact on FP of the health-care sector during the
uncertain Covid-19 period.

5.1 Practical implications

Many changes in the hospital industry are driven not just by the existence of the Covid-19
pandemic but also by social, demographic and environmental factors, which require
hospitals to provide safe, efficient and effective care. Due to this turbulent environment and
highly competitive situation, it is pertinent for hospitals to differentiate themselves from each
other by using dynamic managerial practices. These practices should be monitored to reach
their objectives mainly by providing quality health care that is based on best practice and is
safe, timely and efficient. It may sound easy but in reality, it is not. High quality may be
achieved with extra spending, but to combine efficiency and quality in health care is a key
challenge to leaders.
Covid-19 has challenged the global economy. All businesses are affected by either
shrinking or spiking demand. The health-care sector, for one, faced a very high demand for
services related to Covid-19 infection and all other services within the sector’s orbit.
Hospitals that gained a competitive advantage during this period were able to develop their
innovative dynamic capabilities. Hospitals are expected to design a framework for
responding to such crises while considering their stakeholders’ needs and concerns.
Furthermore, the market and opportunity shifts associated with the Covid-19 pandemic may
last for years. Hospital leaders should anticipate, through their innovative dynamic
capabilities, to ask profound questions to prepare their organizations for this future. These
questions should sense changes related to industry regulations, supply chain, customers
and importantly, the safety of their staff.
Generally, crises are able to underpin the cracks in organization system efficiency. Leaders
are supposed to develop innovative dynamic capabilities to sense the deficiencies,
respond quickly, build a learning curve from faulty decisions and spread the new
experience throughout the hospital. This imposes more flexible and resilient systems and
operations. Organizational structures that call for more cross-functional engagement must
be encouraged, silos should be broken, organizational boundaries should be removed,
hospital cross functions and departments should be aligned under a clear purpose and

j FORESIGHT j
mission and employees’ engagement should be indorsed. Hospitals are expected to seize
new technologies in their operations, as developing their HIS can provide on-time
information on their operations and customer buying behavior and feedback; moreover,
investing in virtual medical services is becoming a sine qua non. Using innovative tools in
communication is fundamental to reach customers and staff efficiently so that the chances
of infection are significantly reduced.

5.2 Future research and limitations

While most studies attempt to report a thorough spectrum of data, many will be limited to
some form of restrictions that will need further research. As such, this study also faced a
limitation by only focusing on Lebanon, whereby future studies should examine other
countries. In addition, this study only observed one period of sampling during the Covid-19
pandemic and as we now know, there should be further studies conducted during the
vaccination process. This study only focused on three dimensions of managerial
capabilities and further research should extend to other variables. This study only examined
the SEM model and future research could attempt to use alternative statistical testing of
other models, such as multiple models and other relevant case studies.

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Corresponding author
Hani El Chaarani can be contacted at: h.shaarani@bau.edu.lb

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