<![CDATA[Despite substantial investment in digital capabilities, service organizations continue to face inconsistent performance and employee disengagement. This study integrates Dynamic Capability Theory, Service-Dominant Logic, and Self-Determination Theory to examine how a Human Capability System (HCS) translates into Adaptive Service Excellence (ASE) through psychological empowerment and employee resourcefulness. Using survey data from 300 frontline employees in Indonesian banking, fintech, and hospitality firms, PLS-SEM was employed to test mediation and moderation hypotheses. Results indicate that psychological empowerment and employee resourcefulness partially mediate the HCS → ASE relationship, as significant indirect effects coexist with a persistent direct effect of HCS on ASE, jointly explaining substantial variance in adaptive service outcomes (R² = 0.621). The HCS exhibited strong positive effects on both mediators, underscoring its role as a foundational organizational dynamic capability. Psychological empowerment emerged as the most influential proximal determinant of ASE, reinforcing the importance of intrinsic motivational mechanisms in enabling adaptive performance, while employee resourcefulness provided a complementary behavioral pathway through cognitive flexibility and improvisational capacity. Furthermore, service climate strengthened the effects of HCS on both mediators, highlighting the importance of supportive service environments in activating human-centered capabilities. In contrast, organizational innovativeness did not significantly moderate the resourcefulness–ASE relationship, suggesting that innovation orientation alone may be insufficient to foster adaptability without corresponding psychological readiness. These findings emphasize that investments in human capability systems enhance adaptive service excellence through both direct and indirect pathways and must be embedded within enabling service climates to realize their adaptive potential in digitally intensive service contexts.]]>
