The Effect of Organizational Capabilities on Competitive Advantage: An Empirical Study of Yemeni Private Hospitals

Abstract

Drawing on the resource-based view and the resource-based theory of the firm, this study investigates the effect of organizational capabilities, together with their dimensions (human, physical, and marketing capabilities), on competitive advantage and its dimensions (quality, cost efficiency, and customer responsiveness) in private hospitals. The study adopts a quantitative, descriptive-analytical approach and employs partial least squares structural equation modeling (PLS-SEM) using SmartPLS 4.0 and SPSS 28. The population consists of 75 private hospitals located in Sana'a, the capital of Yemen, of which 15 hospitals (20 percent) were surveyed. A census sample of 376 managers, deputy managers, and heads of technical and administrative departments was approached, yielding 354 valid responses after outlier screening. The results reveal that organizational capabilities exert a strong and significant effect on competitive advantage (β = 0.463, t = 9.112, p < 0.001). At the dimensional level, human capabilities demonstrate the strongest effect (β = 0.333, t = 6.645, p<0.001), followed by physical capabilities (β = 0.322, t = 7.415, p < 0.001) and marketing capabilities (β = 0.303, t = 6.315, p < 0.001). The measurement model satisfies all reliability and validity criteria (composite reliability = 0.785–0.922; AVE = 0.530–0.755; HTMT < 0.90), and the model exhibits substantial explanatory and predictive power (R² for competitive advantage = 0.746; Q² = 0.591). The study contributes to the literature by providing empirical evidence from a developing-country healthcare context and offers practical implications for hospital managers seeking to configure organizational capabilities as a source of competitive advantage.