Digital leadership and organizational performance in industry 4.0: a conditional process model of digital transformation capability and innovative work behavior
Aug 2026· Strategy & Leadership· 0 citations· 82 references
TL;DR
The findings reveal that digital leadership positively influences both innovative work behavior and organizational performance, and digital transformation capability strengthens the positive effect of digital leadership on organizational performance.
Abstract
Despite increasing scholarly attention to digital transformation, limited research has examined how digital leadership translates into organizational performance through employee behavioral mechanisms and organizational capabilities. Addressing this gap, the present study investigates the direct and indirect effects of digital leadership on organizational performance through innovative work behavior and examines the moderating role of digital transformation capability in Industry 4.0 manufacturing organizations.
A time-lagged survey design was employed to collect data from 400 employees working in manufacturing organizations located in Gujarat and Pune, India. Data were analyzed using Partial Least Squares Structure Equation Modelling (PLS-SEM) to test the proposed relationships, mediation, and moderation effects.
The findings reveal that digital leadership positively influences both innovative work behavior and organizational performance. Innovative work behavior significantly enhances organizational performance and partially mediates the relationship between digital leadership and organizational performance. Furthermore, digital transformation capability strengthens the positive effect of digital leadership on organizational performance. However, the moderated mediation effect was not supported.
This study advances the digital leadership literature by integrating Social Exchange Theory and Dynamic Capabilities Theory within a multilevel framework. It contributes to existing knowledge by identifying innovative work behavior as a key behavioral mechanism and digital transformation capability as an important contextual enabler through which digital leadership enhances organizational performance in Industry 4.0 manufacturing environments.
Digital transformation encourages organizations, including non-bank financial institutions, to strengthen technology-based leadership while cultivating a digital culture and digital capabilities to achieve sustainable organizational performance. This study aims to analyze the influence of digital leadership on sustainable organizational performance and examine the mediating role of digital culture and employee digital capabilities. A quantitative approach was used with the Structural Equation Modeling Partial Least Squares (SEM-PLS) method on data collected from 166 BMT employees in the Purwokerto and Purbalingga areas. The results show that digital leadership has a positive effect on digital culture, employee digital capabilities, and organizational performance. Furthermore, digital culture is shown to mediate the relationship between digital leadership and sustainable organizational performance; This finding is categorized as partial mediation because the direct influence of digital leadership remains significant. Conversely, employee digital capabilities are unable to mediate the relationship between digital leadership and organizational performance. These findings indicate that digital culture plays a significant role in supporting sustainable organizational performance, while individual capabilities have not shown a significant mediating role. This research provides theoretical contributions to the development of digital leadership literature as well as practical recommendations for non-bank financial institutions to prioritize strengthening digital culture in order to promote organizational sustainability
Aulia Arif Rahman, F. Bagis, Akhmad Darmawan et al.· Bulletin of Pedagogical Rese...· 0 citations
It is shown that sustainable organizational performance can be achieved when digital leadership is effectively translated into agile employee behavior, and empirical evidence that sustainable organizational performance can be achieved when digital leadership is effectively translated into agile employee behavior is provided.
Syarifuddin Syarifuddin, M. L. Siraj, Fahrian Arsyam Gultom et al.· Economics & business journal...· 0 citations
The transition toward Industry 5.0 has fundamentally reshaped organizational priorities by emphasizing human-centricity, sustainability, resilience, and intelligent collaboration between advanced technologies and human capabilities. Within this context, transformational leadership has emerged as a strategic driver of organizational adaptability and long-term competitiveness. This study investigates the direct and indirect effects of transformational leadership on organizational resilience by examining the mediating roles of knowledge management capability and employee innovative behavior. A quantitative research design was employed using a survey of employees from organizations undergoing digital transformation across multiple industrial sectors. Data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) to evaluate both measurement and structural models. The findings reveal that transformational leadership significantly enhances knowledge management capability, stimulates employee innovative behavior, and directly strengthens organizational resilience. Knowledge management capability also exerts a significant positive influence on employee innovative behavior and organizational resilience, confirming its strategic role in facilitating organizational learning and adaptive capacity. Furthermore, employee innovative behavior significantly contributes to organizational resilience by enabling continuous improvement, creative problem-solving, and organizational flexibility. Mediation analysis demonstrates that knowledge management capability and employee innovative behavior partially mediate the relationship between transformational leadership and organizational resilience, indicating that leadership effectiveness is reinforced through organizational knowledge processes and innovation-oriented employee behavior. These findings contribute to the growing Industry 5.0 literature by integrating leadership, knowledge management, innovation, and resilience into a comprehensive conceptual framework. The study offers practical implications for managers seeking to develop resilient organizations by fostering transformational leadership, strengthening knowledge management systems, and encouraging employee innovation to achieve sustainable organizational performance in increasingly dynamic and digitally driven business environments.
Dasmadi· Journal of Intelligent Decis...· 0 citations
This study investigates the indirect effect of digital leadership on employee digital performance through High-Involvement Human Resource Management Practices (HI-HRMP) and employee dynamic capability and reveals that digital leadership does not directly influence employee digital performance.
Rafanjamalala Benjamine Andreas, Naelati Tubastuvi, S. Santoso et al.· SENTRALISASI· 0 citations
This study analyzes the influence of compensation, engagement, competence, and organizational culture on employee performance through the application of digitalization and leadership in PTPN IV Regional I. The research is motivated by the importance of digital transformation and strengthening human resources in increasing organizational effectiveness and work productivity of state-owned plantation companies. A quantitative approach was used by collecting data through questionnaires to 264 employees using the purposive random sampling technique. Data analysis was carried out using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results of the study show that compensation, engagement, competence, and organizational culture have a positive and significant effect on the implementation of digitalization, leadership, and employee performance. In addition, the implementation of digitalization and leadership has also been proven to have a positive and significant effect on employee performance. The results of mediation testing showed that the implementation of digitalization and leadership was able to mediate the relationship between compensation, engagement, competence, and organizational culture on employee performance. These findings confirm that improving employee performance requires integrating human resource management, organizational culture, digital transformation, and adaptive leadership to continuously improve work effectiveness and company competitiveness.
Thamrin, Endang Maryanti, Loly et al.· International Journal of Acc...· 0 citations
The increasing pace of digitalization has made digital transformation a critical strategic priority for small and medium-sized enterprises (SMEs), particularly in developing economies. This study examines the effects of Digital Transformation Leadership (DTL) on Business Model Innovation (BMI) and Firm Performance (FP), while investigating the moderating role of Organizational Agility (OA). Data were collected from 500 employees working in Pakistani SMEs and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The findings reveal that Digital Transformation Leadership has significant positive effects on Organizational Agility, Business Model Innovation, and Firm Performance. However, Organizational Agility does not significantly moderate the relationships between Digital Transformation Leadership and either Business Model Innovation or Firm Performance. The structural model demonstrates satisfactory explanatory and predictive capability, confirming the strategic importance of Digital Transformation Leadership in enhancing organizational innovation and performance. This study contributes to the literature by providing empirical evidence from an emerging economy and by demonstrating that Organizational Agility functions as an important organizational capability but does not strengthen the effects of Digital Transformation Leadership on Business Model Innovation or Firm Performance. The findings suggest that managers should prioritize leadership capabilities and digital transformation initiatives while simultaneously developing complementary organizational capabilities beyond agility to maximize digital transformation outcomes. The study also provides practical implications for policymakers seeking to strengthen SMEs' digital competitiveness through investments in digital infrastructure, digital skills, and innovation support programs.
M. B. Hossain, Mujib Ur Rahman, A. Nurbatsin et al.· Decision Making Advances· 0 citations
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