DIGITAL LEADERSHIP AND ORGANIZATIONAL AGILITY: DRIVING GOVERNMENT PERFORMANCE THROUGH INNOVATION CAPABILITY
Keywords:
Digital Leadershi, Organizational Agility, Technological Innovation, Leadership Enhancement, Digital Innovation, Government Performance.Abstract
This study investigates how Digital Leadership, Organizational Agility, and Technological Innovation shape Government Performance, while considering Leadership Enhancement and Digital Innovation as intervening mechanisms. Drawing on Dynamic Capability Theory, the study argues that organizational capabilities generate performance improvements primarily through processes of capability transformation, rather than solely through direct relationships between organizational capabilities and performance. A quantitative explanatory research design was adopted, based on survey responses from 300 civil servants holding managerial positions within local government institutions in North Aceh Regency, Bireuen Regency, and Lhokseumawe City, Indonesia. The hypothesized relationships were empirically assessed using Structural Equation Modelling–Partial Least Squares (SEM-PLS). The empirical results indicate that Digital Innovation constitutes the strongest determinant of Government Performance, as reflected in both its largest direct effect and highest effect size. Technological Innovation likewise exerts a statistically significant direct influence on Government Performance. However, neither Digital Leadership nor Organizational Agility demonstrates a direct effect on Government Performance; instead, both significantly contribute to Digital Innovation and Leadership Enhancement. The mediation results further establish Digital Innovation as the principal pathway through which Digital Leadership, Organizational Agility, and Technological Innovation translate into improved Government Performance. Leadership Enhancement also mediates these relationships, although its mediating contribution is comparatively weaker. Taken together, the findings provide support for fourteen of the seventeen hypothesized relationships, whereas three hypotheses are not supported. The study advances the literature on digital government and strategic management by broadening the application of Dynamic Capability Theory to the public-sector context. The findings indicate that organizational capabilities contribute to superior government performance mainly when they are converted into innovation-driven transformation processes. From a practical perspective, policymakers should place greater emphasis on developing digital innovation, strengthening digital leadership capabilities, fostering organizational agility, and maximizing the potential of technological innovation as complementary pathways for improving government performance and creating greater public value.
Downloads
References
AlNuaimi, B., Khan, M., & Ajmal, M. (2022). The nexus between leadership, agility, and digital strategy: Evidence from public organizations. Journal of Business Research, 145, 120–131. https://doi.org/10.1016/j.jbusres.2022.01.045
Alomari, K., & Sandhu, K. (2024). E-leadership capabilities for digital government transformation. Government Information Quarterly, 41(1), 101800. https://doi.org/10.1016/j.giq.2023.101800
Atobishi, T., Alhassan, I., & Mohammed, A. (2024). Digital transformation capabilities and organizational performance in public sector institutions. Public Organization Review, 24(3), 415–432.
Cepiku, D., Mussari, R., & Giordano, F. (2021). Public management reforms and government performance: Evidence from European countries. International Review of Administrative Sciences, 87(3), 581–600. https://doi.org/10.1177/0020852320944981
Dwivedi, Y. K., Hughes, L., Coombs, C., Constantiou, I., Duan, Y., Edwards, J. S., Gupta, B., Lal, B., Misra, S., Prashant, P., Raman, R., Rana, N. P., Sharma, S. K., & Upadhyay, N. (2021). Impact of digital government transformation on public sector leadership. Government Information Quarterly, 38(4), 101600. https://doi.org/10.1016/j.giq.2021.101600
ElBadawy, T. A. (2024). Organizational agility and public sector performance during crisis: An empirical study. Public Organization Review, 24(2), 221–239. https://doi.org/10.1007/s11115-023-00670-y
Elia, G., Margherita, A., & Passiante, G. (2022). Digital leadership and collaborative innovation in public organizations. Information Systems Management, 39(1), 33–45. https://doi.org/10.1080/10580530.2021.1954692
Guenduez, A. (2025). Digital innovation and public trust: Evidence from citizen-centric services. Government Information Quarterly, 42(1), 101845. https://doi.org/10.1016/j.giq.2024.101845
Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2022). A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM) (3rd ed.). Thousand Oaks, CA: Sage Publications.
Haug, N., Dan, P., & Mergel, I. (2023). Digital transformation in government: Innovation, responsiveness, and transparency. Public Management Review, 25(7), 1061–1082. https://doi.org/10.1080/14719037.2022.2104767
Hong, S., Kim, B., & Kwon, M. (2022). Digital innovation in the public sector: Drivers and outcomes. Government Information Quarterly, 39(3), 101687. https://doi.org/10.1016/j.giq.2022.101687
Juknevičienė, V., Petrauskas, R., & Petronytė, G. (2025). E-leadership within public sector organisations: Challenges and opportunities. Sustainability, 17(10), 4474. https://doi.org/10.3390/su17104474
Kim, Y. J. (2022). Exploring technology innovation factors, government policies, and sustainability outcomes. Sustainability, 14(22), 15406. https://doi.org/10.3390/su142215406
Kock, N. (2021). Common method bias in PLS-SEM: A full collinearity assessment approach. International Journal of e-Collaboration, 17(1), 1–10. https://doi.org/10.4018/IJeC.2021010101
Lee, J. (2022). Government performance in the digital era: The role of technology-enabled leadership. Information Polity, 27(4), 425–440. https://doi.org/10.3233/IP-220012
Ludviga, I. (2023). Organizational agility during crisis: Evidence from European public organizations. Sustainability, 15(5), 4507. https://doi.org/10.3390/su15054507
Morton, C. (2023). Agility in public organizations: Responding to sudden changes. Journal of Organizational Change Management, 36(4), 512–528. https://doi.org/10.1108/JOCM-11-2022-0345
Nurdin, N., Stockdale, R., & Scheepers, H. (2023). Digital innovation in government: Citizen participation and service improvement. International Journal of Public Administration, 46(8), 601–614. https://doi.org/10.1080/01900692.2023.2178426
OECD. (2023). Leadership for a digital-ready public sector. Paris: OECD Publishing. https://doi.org/10.1787/9789264896542-en
Popa, S., Soto-Acosta, P., & Martinez-Conesa, I. (2024). Technological innovation and government performance: Evidence from EU member states. Technological Forecasting and Social Change, 196, 122516. https://doi.org/10.1016/j.techfore.2023.122516
Ren, J., Zhang, H., & Li, X. (2025). Digital leadership, dynamic capabilities, and service innovation in the public sector. Humanities and Social Sciences Communications, 12(1), 145. https://doi.org/10.1057/s41599-025-05378-7
Shamayleh, G. A., & Nurgabdeshov, A. (2025). Transforming Governance: An Integrated Framework for Digital Modernization in the Public Sector. Academy of Management Proceedings. https://doi.org/10.5465/AMPROC.2025.22817abstract
Teece, D. J. (2007). Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal, 28(13), 1319–1350. https://doi.org/10.1002/smj.640
Teece, D. J. (2018). Business models and dynamic capabilities. Long Range Planning, 51(1), 40–49. https://doi.org/10.1016/j.lrp.2017.06.007
Yusuf, M., Idris, M., & Hasan, A. (2023). Exploring the role of digital leadership and digital transformation on the performance of public sector organizations. International Journal of Data and Network Science, 7(4), 1231–1244. https://doi.org/10.5267/j.ijdns.2023.7.008
Zhang, W., & Li, Y. (2025). The impact of e-government on technological innovation in the public sector. Emerging Markets Finance and Trade, 61(3), 212–230. https://doi.org/10.1080/1540496X.2025.2500443
