Sustainability, Digital Transformation, and Firm Outcomes: The Mediating Role of Digitalization

Abstract

Recent empirical research shows that sustainability and green practices within organizations have, in turn, become tied up with performance management and digital transformation and are thereby given a status strategically vital concerning the context of management engagement. Thus, this study examines the interrelationship between green organizations and management commitment, and the moderating effect played by digitalization in influencing the relationship between green organizations and organizational performance. A quantitative research approach was taken in the study, and a survey study was conducted with 500 professionals of the services sector and information technology industries in Birmingham and Dhaka, Bangladesh. Structural Equation Modeling was performed with the use of SmartPLS software to examine the hypothesized relationships based on the Resource-Based View and the Technology Acceptance Model. The empirical findings both indicate that the management commitment to environmental practices has a meaningful positive effect on organizational performance and that digitalization plays a vital mediating role in the relationship by enhancing the influence of green CE on organizational performance. Moreover, the findings show that the sustainability-competing organizations with integrated digital tools under the sustainable-oriented leadership conditions achieve higher levels of competitiveness, innovation, and profitability. The research contribution is theoretical by combining theoretical resources in the perspectives of strategic resource management and technology acceptance that can be used to explain the contingent role of managerial commitment to form synergetic performance with digitalization. In conclusion, the results suggest that organizations place environmental responsibility within the context of digital strategies in order to increase operating efficiency, legitimacy, and resilience.