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.
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