The Impact of Digital Transformation Leadership Competencies on Firm Performance Through the Lens of Organizational Creativity and Digital Strategy

This paper investigates the pivotal role of Digital Transformation Leadership (DTL) in shaping Organizational Creativity (OC) and Firm Performance (FP) within manufacturing firms (MFs) in the Middle East region. In the context of the rapidly evolving digital landscape characterized by the pervasive influence of digital technologies, our study aims to bridge a critical gap by exploring the mediating effects of OC and Digital Strategy (DS) on the relationship between DTL and FP. Using survey data collected from 199 MFs listed in the Chamber of Industries of Jordan and Palestine, our research employs Structural Equation Modeling (SEM) with Partial Least Squares (PLS-SEM) software to analyze the intricate dynamics at play. Our findings underscore the positive correlation between DTL and both OC and DS, highlighting the transformative potential of effective leadership in driving digital initiatives within MFs. Furthermore, we observe a significant positive association between OC and FP, while DS does not exhibit a direct impact on FP. Notably, our analysis reveals that OC serves as a mediator in the relationship between DTL and FP, elucidating the pathways through which leadership fosters organizational creativity and influences firm performance outcomes. The implications of our research extend beyond academic discourse, offering actionable insights for practitioners and policymakers seeking to navigate the complexities of digital transformation in the Middle East’s manufacturing sector. By elucidating the interplay between DTL, OC, DS, and FP, our study contributes to a deeper understanding of the mechanisms driving organizational success in an increasingly digitized business environment.