The Influence of Digital Leadership and Organizational Agility on Firm Performance: Evidence from Indonesian Mid-Sized Companies

Bagas Pratama Nugroho; Siti Rahmawati Putri

doi:10.70716/ecoma.v3i3.329

Authors

Bagas Pratama Nugroho Faculty of Economics and Business, Universitas Sebelas Maret, Indonesia
Siti Rahmawati Putri Faculty of Economics and Business, Universitas Brawijaya, Indonesia

DOI:

https://doi.org/10.70716/ecoma.v3i3.329

Keywords:

digital leadership, organizational agility, firm performance, dynamic capability, Indonesia

Abstract

This study examines the influence of digital leadership and organizational agility on firm performance in Indonesian mid-sized companies. Rapid digital disruption forces firms in emerging economies to strengthen leadership capabilities and adaptive capacity to sustain performance. This research adopts a quantitative approach using survey data collected from managers of mid-sized firms across service and manufacturing sectors in Indonesia. Data are analyzed using structural equation modeling to test direct and indirect relationships among variables. The findings show that digital leadership has a significant positive effect on organizational agility and firm performance. Organizational agility also demonstrates a strong positive impact on firm performance and partially mediates the relationship between digital leadership and performance outcomes. These results confirm dynamic capability theory, which emphasizes leadership and agility as critical mechanisms for navigating digital transformation. The study contributes empirically by clarifying how digital leadership translates into performance advantages through agile organizational processes in the context of developing economies. Practically, the findings suggest that managers should invest in digital-oriented leadership development and agile structures to improve responsiveness, decision speed, and competitive performance. This study provides relevant insights for scholars and practitioners seeking to understand performance drivers in digitally transforming mid-sized firms in Indonesia.

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