Sustainability and Organizational Performance in South Korea: The Effect of Digital Leadership on Digital Culture and Employees’ Digital Capabilities

Abstract

In the era of digital transformation, organizations are making efforts towards sustainability. In particular, leadership is transforming into digital leadership according to changes in management environments, which are deeply related to organizational performance. In this study, we focus on organizational performance and sustainability management and clarify the role of digital culture and employees’ digital capabilities in perspectives on digital leadership. We collected data from 149 employees who work in South Korean organizations using a survey based on digital leadership, digital culture, employees’ digital capabilities, and organizational performance, and we tested our hypotheses using structural equation modeling. The results show that digital leadership has a positive direct and indirect effect on organizational performance. Moreover, digital culture and employees’ digital capabilities partially mediate the relationship between digital leadership and sustainable organizational performance in South Korea. This study contributes to leadership and resource-based view (RBV) research by providing evidence for the role of digital leadership in sustainable organizational performance. As leadership continues to extend alongside verification of the RBV theory, the crucial role of digital leadership is changing, and the role of employees’ digital capabilities in organizational performance in South Korea needs to be considered.