The effect of digital transformation and organization agility on organizational performance: The mediating role of innovation capability
Keywords:
Digital Transformation, Organizational Agility, Innovation Capability, Organizational Performance, Dynamic Capabilities, Mediation AnalysisAbstract
Digital transformation and organizational agility have become increasingly important strategic capabilities for organizations seeking to sustain competitiveness in dynamic business environments. Nevertheless, the mechanisms through which these capabilities translate into superior organizational performance require further investigation. This study aims to examine the effects of digital transformation and organizational agility on organizational performance, with innovation capability serving as a mediating variable. Drawing on Dynamic Capabilities Theory, the study proposes an explanatory quantitative research model incorporating direct and indirect relationships among four organizational constructs. The proposed research design employs a cross-sectional survey, with data intended to be collected from 250 managerial and professional respondents across business organizations. Data analysis is designed to employ IBM SPSS Statistics for descriptive statistics, instrument assessment, and multiple regression, complemented by PROCESS Macro Model 4 with 5,000 bootstrap samples for mediation analysis. For methodological illustration, simulated statistical findings indicate that digital transformation and organizational agility are positively associated with innovation capability and organizational performance. Innovation capability also demonstrates a positive association with organizational performance and partially mediates both relationships. These illustrative findings suggest that organizational performance may depend not only on technological integration and adaptive organizational practices but also on the ability to translate these resources into meaningful innovations. The study offers a theoretically grounded framework for examining how organizations can integrate digital transformation, organizational agility, and innovation capability to strengthen performance.
Downloads
References
Ahmed, F., Malik, M. Y., & Shah, S. K. A. (2026). Digital transformation management and organizational performance: The mediating role of organizational agility and the moderating effect of technological readiness. Inverge Journal of Social Sciences, 5(3). https://doi.org/10.63544/ijss.v5i3.284
AlNuaimi, B. K., Singh, S. K., Ren, S., Budhwar, P., & Vorobyev, D. (2022). Mastering digital transformation: The nexus between leadership, agility, and digital strategy. Journal of Business Research, 145, 636–648. https://doi.org/10.1016/j.jbusres.2022.03.038
Preacher, K. J., & Hayes, A. F. (2008). Asymptotic and resampling strategies for assessing and comparing indirect effects in multiple mediator models. Behavior Research Methods, 40(3), 879–891. https://doi.org/10.3758/BRM.40.3.879
Serrador, P., & Pinto, J. K. (2015). Does agile work?—A quantitative analysis of agile project success. International Journal of Project Management, 33(5), 1040–1051. https://doi.org/10.1016/j.ijproman.2015.01.006
Teece, D. J., Peteraf, M. A., & Leih, S. (2016). Dynamic capabilities and organizational agility: Risk, uncertainty, and strategy in the innovation economy. California Management Review, 58(4), 13–35. https://doi.org/10.1525/cmr.2016.58.4.13
Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509–533. https://doi.org/10.1002/(SICI)1097-0266(199708)18:7%3C509::AID-SMJ882%3E3.0.CO;2-Z
Verhoef, P. C., Broekhuizen, T., Bart, Y., Bhattacharya, A., Dong, J. Q., Fabian, N., & Haenlein, M. (2021). Digital transformation: A multidisciplinary reflection and research agenda. Journal of Business Research, 122, 889–901. https://doi.org/10.1016/j.jbusres.2019.09.022
Xu, M., Zhang, Y., Sun, H., Tang, Y., & Li, J. (2024). How digital transformation enhances corporate innovation performance: The mediating roles of big data capabilities and organizational agility. Heliyon, 10(14), e34905. https://doi.org/10.1016/j.heliyon.2024.e34905
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2026 Tennessee Research International of Social Sciences
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Articles published in the Tennessee Research International of Social Sciences (TRISS) are available under Creative Commons Attribution Non-Commercial No Derivatives Licence (CC BY-NC-ND 4.0). Authors retain copyright in their work and grant TRISS right of first publication under CC BY-NC-ND 4.0. Users have the right to read, download, copy, distribute, print, search, or link to the full texts of articles in this journal, and to use them for any other lawful purpose.
Articles published in TRISS can be copied, communicated and shared in their published form for non-commercial purposes provided full attribution is given to the author and the journal. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this journal.
