Wawa Santoso, Ananda Sabil Hussein, Noermijati Noermijati, Sri Palupi Prabandari
The relationship between organizational values and business performance has yielded inconsistent results across studies in the field of strategic management. While some studies suggest that strong organizational values contribute positively to business performance, others report insignificant or weak relationships, indicating that the mechanisms through which values influence performance remain insufficiently understood. This conceptual article aims to resolve the inconsistency in the literature by developing a conceptual framework where compassion constitutes a fundamental organizational value. Drawing on a critical review and synthesis of the literature on compassion, organizational values, organizational ambidexterity, business model innovation, organizational agility, and business performance, this study identifies key limitations of the Resource-Based View (RBV), particularly its predominantly internal and relatively static orientation, which limits its ability to explain the competitive implications of organizational values in dynamic environments. To address this limitation, the paper incorporates Resource-Advantage Theory (RAT), a more dynamic theoretical perspective that emphasizes continuous competition, innovation, and adaptation in evolving market environments, to explain how compassionate organizational values translate into superior business performance. In addition, a bibliometric analysis reveals that compassion has been predominantly examined at the individual and psychological levels and has not yet been systematically conceptualized as a strategic organizational value within the strategic management literature. This gap provides the empirical and conceptual foundation for proposing a novel construct, Compassionate Organizational Values (COV) as a key contribution to the strategic management literature. The framework further positions organizational ambidexterity, business model innovation, and organizational agility as mediating mechanisms that link COV to business performance by enabling organizations to balance innovation and efficiency, redesign value creation processes, and respond effectively to environmental changes. This study is situated in the context of Catholic hospitals across Indonesia and offers a theoretical contribution to the advancement of strategic management scholarship in healthcare services and related service industries, particularly by demonstrating how compassion can function not only as an ethical principle but also as a strategic organizational resource capable of supporting sustainable performance in complex service environments. Copyright (c) 2025 The Authors. This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Faculty of Economics and Business, Universitas Brawijaya, Malang, Indonesia
