Investigating the Relationship of Change Leadership, Knowledge Acquisition, and Firm Performance in Digital Transformation Context

Abstract

The purpose of this research is (1) to confirm the impact of change leadership (CL) and Knowledge Acquisition (KA) on firm performance (FP) of large manufacturing companies implementing digital transformation projects; (2) to investigate the mediation effect of KA on the relationship between CL and FP. The relationships between CL-FP and KA-FP have been studied separately. However, empirical research studying these relationships in a digital transformation context is still scarce. In addition, previous studies investigating the relationship between CL and KA can hardly be found. To the best of our knowledge, this is the first integrated study of CL, KA, and FP relationships in the context of digital transformation among large Indonesian manufacturing companies. A quantitative research method was used in this study. Quasi Snowball sampling method was used to distribute the questionnaires. From the 148 returned questionnaires, only 122 samples are usable for further processing. The respondents are scattered throughout 10 provinces of Indonesia. Their products are diverse in 19 categories. A Structural Equation Model was developed for this study and analyzed using AMOS. The findings support previous research suggesting that change leadership is a prerequisite for firm performance, specifically in this study in the digital transformation context. The study also contributes to the body of knowledge by confirming that KA mediates the effect of CL on FP. Based on the findings in this study, the authors develop a framework to guide digital transformation leaders in their digital transformation journey. It is called the 6Cs of Digital Transformation Leadership.