Ethically embedded dynamic capabilities and firm performance: corporate reputation as a strategic mechanism in Indonesian life insurance firms

Abstract

Drawing on the resource-based view and dynamic capabilities theory, this study examines whether innovation and technology adoption shape organizational agility, how organizational agility and employee moral competence influence corporate reputation, and how corporate reputation affects firm performance in the Indonesian life insurance industry, where stakeholder trust is critical. Using validated multi-item Likert scales, survey data were collected from 237 senior and middle managers in national, multinational, and Sharia life insurers and analysed using partial least squares structural equation modelling. The results show that innovation and technology adoption positively affect organizational agility; organizational agility and, more strongly, employee moral competence enhance corporate reputation; and corporate reputation is strongly associated with financial and non-financial firm performance. These findings indicate that, in a credence service context, corporate reputation is the central mechanism through which technological, organizational, and ethical capabilities are converted into superior performance. By integrating dynamic capabilities, micro-level ethics, and corporate reputation into a single framework, the study highlights employee moral competence as an overlooked strategic capability for insurers seeking stronger trust, reputation, and performance.