Digital leadership and digital capability development for organizational innovation in emerging market SMEs
Ngoc Duy Pham, Anh Truong Thi PhuongPurpose
This study aims to examine how digital leadership (DL) is associated with organizational innovation in small and medium-sized enterprises (SMEs) through digital capability (DC) development. It further investigates whether digital culture (DIC) strengthens the relationship between DL and DC, and whether environmental dynamism (ED) conditions the relationships between DC and two forms of organizational innovation: incremental innovation (II) and radical innovation (RI).
Design/methodology/approach
Data were collected from 298 Vietnamese SMEs and analyzed using partial least squares structural equation modeling (PLS-SEM). The study examines the direct relationships among DL, DC, II and RI, the mediating role of DC, and the moderating roles of DIC and ED.
Findings
The results show that DL is positively associated with DC and II, whereas its direct relationship with RI is not significant. DC is positively associated with II, but its direct relationship with RI is not supported. DC mediates the relationship between DL and II, but not between DL and RI. DIC strengthens the positive relationship between DL and DC. ED strengthens the relationships between DC and both II and RI, with a substantially stronger moderating effect on RI. These findings suggest that II is more directly associated with leadership orientation and digital capability development, whereas RI depends more heavily on dynamic and uncertain environmental conditions.
Originality/value
This study contributes to the dynamic capabilities, digital transformation and innovation management literature by showing that digital capability development is an important mechanism linking DL and organizational innovation in emerging-economy SMEs. It also demonstrates that the innovation value of DC differs across innovation outcomes: DC supports II more consistently, while its contribution to RI becomes more pronounced under high ED. The study provides a differentiated explanation of how SMEs build and use digital capabilities for technology-enabled innovation under digitalization pressure.