Conditional Indirect Effects of Strategic Leadership on Sustainable Organizational Performance: A Moderated-Mediation Model

Abstract

The a priori assumption is that strategic leadership influences organizational performance based on their strategic decisions and choices. However, empirical studies at times yields inconsistent set of results regarding these strategic leadership effects. This is indicative that strategic leadership effects on organisational performance may not be absolute but are also predicated upon the influence of other endogenous and exogenous factors. The external operating environment and the digitalization phenomenon represent two such contingent factors. Although leadership has been extensively studied, there is limited empirical evidence regarding the moderated-mediation effects arising from the interplay of the external environment and digitalization on the primary relationship between strategic leadership and sustainable performance especially in the context of public sector organisations. The objective of this study was to not only address these empirical and contextual gaps but also contribute to the ongoing academic discourse among scholars by conducting an analytical cross sectional census survey of 250 State owned Corporations in Kenya. The results show that the moderated-mediation effects arising from the pairwise interplay of the external environment and digitalization on the indirect influence of strategic leadership on organizational performance is statistically significant. These findings make important contributions at three levels. First, to theory by testing the predictions of the theories undergirding the study. Second, to policy by making recommendations geared towards enhancing the efficiency and effectiveness of public sector organizations. Finally, to management practice by outlining the most ideal configurations of strategic leadership, external environmental conditions and digitalization processes required to enhance sustainable organizational performance.

Keywords: Strategic leadership, digitalization, external environment, sustainable organizational performance.

DOI: 10.7176/EJBM/17-7-02

Publication date:August 31^st 2025