The mediating role of managerial capabilities in local governments: Leadership style and strategy execution

Type of the article: Research ArticleAbstractLeadership style and managerial capability remain critical yet understudied factors influencing strategy execution in local governments. This quantitative study examines how paternalistic, transactional, and transformational leadership shape managerial capability and strategy execution, and whether managerial capability mediates these relationships. Using a structured questionnaire, data were collected from 382 civil servants (ASN) across 10 regencies, cities, and the provincial government in North Maluku, and analyzed using PLS-SEM. The statistical results show that all three leadership styles significantly enhance managerial capability, with paternalistic (β = 0.291), transactional (β = 0.283), and transformational (β = 0.282) leadership demonstrating positive effects (p < 0.05). Paternalistic and transformational leadership also positively influence strategy execution, whereas transactional leadership shows no significant direct effect (β = –0.004, p = 0.473). Managerial capability significantly improves strategy execution and serves as a meaningful mediator, supported by indirect path coefficients ranging from β = 0.109 to 0.112 (p < 0.05). These findings reinforce the role of managerial capability as a strategic public-sector resource within the RBV framework. Practically, the results highlight the importance of leadership development programs that integrate paternalistic and transformational behaviors, supported by selective transactional practices, to strengthen managerial capability and improve strategy implementation in local governments.