Does Digital Leadership Impact Directly or Indirectly on Dynamic Capability: Case on Indonesia Telecommunication Industry in Digital Transformation?

Telecommunication sectors are the area where the digital disruption has taken significant influence to the incumbent firms. The market become more competitive and dynamic, hence, it will be required the incumbent firms to transform to have a dynamic capability. In digital era, The development of dynamic capability is driven from the role of digital leader. According to digital disruption view, the activities process derived from the customer and market orientation, and due to the nature of digital become global the alliance capability is important to study. Due to the important role of digital leadership and limitation study on the effect digital leadership in developing dynamic capability, this study will assess the effective path analysis of the role digital leadership in developing dynamic capabilities. Does the digital leadership has direct influence to dynamic capability, or indirect influence through market orientation capabilities or alliance capabilities?. The study was conducted on 88 respondents who are senior level from Indonesia telecommunication companies. The statistical data analysis used Smart-PLS application. The result explained that digital leadership impacts directly and indirectly through mediation variable of market orientation.. While the mediation role of alliance capability has shown not significant influence in relationship between dynamic capability and digital leadership.. This finding has implication on strategic initiative in dealing dynamic capability, where the digital leadership shall focus on market orientation to create the optimal value to face the current and future business challenges.