Assessing the Impact of Digital Leadership on Public Sector Performance: The Mediation Role of Digital Transformation in Developing Economies

Abstract

This study investigates the role of digital leadership in enhancing organizational performance in Uganda’s public sector, with a focus on the mediating effect of digital transformation. Using a cross-sectional survey design, data were collected from 590 public sector employees and analyzed using SPSS Process Macro. Results reveal that digital transformation significantly mediates the relationship between digital leadership and organizational performance. These findings highlight the importance of strengthening digital leadership and transformation initiatives to drive performance improvements in public institutions.

Keywords

digital leadership digital transformation organizational performance public sector organizations Uganda

Introduction

In an era branded by rapid technological advancement, the role of digital leadership in shaping public sector performance has garnered significant attention globally (Namatovu & Kyambade, 2025; Kyambade & Namatovu, 2025c; Qiao et al., 2024). The public sector, entrusted with delivering essential services and fostering national development (Kyambade, Bartazary, & Namatovu, 2024), faces unique challenges and opportunities in harnessing digital technologies. Uganda, like many developing nations, stands at a pivotal juncture where effective digital leadership can potentially transform governance and service delivery (Kyambade & Namatovu, 2025d; Kyambade, Namuddu, et al., 2024). Digital leadership, defined as the strategic utilization of technology by public sector leaders to drive organizational change and innovation (United Nations Public Administration Network, 2019), plays a pivotal role in shaping the adoption and effectiveness of digital transformation initiatives. Digital leadership encompasses the strategic use of technology by leaders to drive organizational change, enhance efficiency, and promote innovation (United Nations Public Administration Network, 2019). In Uganda, where the digital divide persists but digital infrastructure is rapidly evolving (Kyambade & Namatovu, 2025b), understanding the influence of digital leadership on public sector performance becomes vital. This study aims to explore this impact, focusing particularly on how digital transformation acts as a mediating factor in this relationship. Digital transformation comprises the comprehensive integration of digital technologies into all facets of organizational operations (World Bank, 2020). It spans the adoption of digital platforms, the automation of processes, and the enhancement of citizen engagement through digital channels (Ministry of ICT and National Guidance, Uganda, 2023). In the context of Uganda’s public sector, digital transformation plays a pivotal role in modernizing service delivery, improving transparency, and increasing administrative efficiency.

Uganda’s public sector faces a pressing need to adapt to the digital era to improve governance effectiveness and service delivery amidst significant challenges (Fraser-Moleketi et al., 2025; Kalema, 2024; Kyambade, Namatovu, Namubiru, & Muganzi, 2025). While digital technologies offer transformative potential, the specific influence of digital leadership and digital transformation on public sector performance in Uganda remains underexplored. According to recent statistics, Uganda has made strides in digital adoption with internet penetration reaching approximately 51.1% of the population by 2023 (International Telecommunication Union, 2023). Despite this progress, the integration of digital technologies into public administration processes and citizen services varies, highlighting gaps in leveraging digital tools to enhance efficiency and transparency (Qiao et al., 2024). The mechanisms through which digital leadership influences public sector performance in Uganda, particularly through digital transformation pathways, necessitate rigorous investigation.

Our study represents a significant contribution to the Technology-Organization-Environment framework (TOE), which provides a comprehensive lens for understanding the complex dynamics of technology adoption and its organizational and environmental impacts. In the context of Uganda, a developing nation striving to modernize its public sector amidst technological advancements, the TOE framework offers a structured approach to analyzing how digital leadership influences organizational outcomes through digital transformation initiatives. Digital leadership being the strategic use of technology by public sector leaders (United Nations Public Administration Network, 2019), shapes the implementation and adoption of digital transformation strategies within public institutions. Digital transformation, encompassing the integration of digital technologies into administrative processes and citizen services (Bindel Sibassaha et al., 2025; World Bank, 2020), acts as a mediating mechanism through which digital leadership initiatives are operationalized and impact public sector performance. This study aims to explore these interrelationships within the TOE framework, examining how technological characteristics, organizational factors, and the external environment collectively influence the effectiveness of digital leadership in Uganda’s public sector.

Despite global advancements in digital leadership and transformation research, there is a notable dearth of studies specifically examining their impact within Uganda’s public sector. While digital transformation has been extensively researched in developed countries (World Bank, 2020), its application and effectiveness in the African context, particularly in Uganda, remain underexplored. This gap hinders a comprehensive understanding of how digital leadership strategies tailored to local contexts can drive public sector performance improvements. The majority of studies tend to analyze digital leadership, digital transformation, and public sector performance independently (Alvarenga et al., 2020; Ushaka Adie et al., 2024), overlooking their interconnectedness and potential synergies. By neglecting to examine these variables holistically, existing research fails to capture the full spectrum of factors influencing digital governance effectiveness in Uganda. A comprehensive study that integrates these dimensions would provide a nuanced understanding of how strategic leadership, technological adoption, and performance of the organization are intertwined in the public sector context. Existing literature often overlooks the mediation role of digital transformation on digital leadership and public sector performance (Qiao et al., 2024). While studies separately analyze digital leadership strategies and the outcomes of digital transformation initiatives, few explore how these elements interact and synergize within organizational contexts. Understanding this mediation pathway is crucial for elucidating the mechanisms through which digital leadership influences performance outcomes in public sector organizations. Research on digital leadership and transformation frequently centers on private sector firms (Gledson et al., 2024; Magesa & Jonathan, 2022; Namuddu et al., 2024), with fewer studies dedicated to public sector organizations. This gap is particularly pronounced in Uganda and Africa as a whole, where the unique challenges and opportunities in governance and service delivery necessitate tailored approaches to digital innovation. Investigating these variables within public sector contexts is essential for developing strategies that address specific institutional needs and contribute to sustainable development goals.

Our study bridges theory and practice by exploring critical intersections within the evolving landscape of digital governance. In developing economies, including Uganda, digital leadership represents a pivotal strategy for leveraging technology to enhance public sector performance. This study extends beyond conventional approaches by investigating how digital transformation mediates the association between digital leadership and organizational outcomes. Digital leadership, characterized by strategic technology utilization by public sector leaders (Qiao et al., 2024; United Nations Public Administration Network, 2019), holds promise for fostering innovation, improving service delivery, and enhancing administrative efficiency. Concurrently, digital transformation initiatives, encompassing the integration of digital technologies into administrative processes and citizen services (World Bank, 2020), play a crucial mediating role in translating leadership strategies into tangible performance improvements. Despite growing interest in digital governance globally (Das, 2024; Kitsios et al., 2023; Kyambade, Tushabe, & Namatovu, 2024; Latupeirissa et al., 2024; Liu & Zowghi, 2023; Sigurjonsson et al., 2024), there remains a notable gap in understanding these dynamics within developing economies. Existing research predominantly focuses on developed nations, neglecting the unique contextual factors and challenges faced by countries like Uganda. By addressing this gap, the study aims to provide both theoretical insights into the mechanisms through which digital leadership influences organizational outcomes and practical implications for enhancing governance in developing country contexts. Specifically, this study investigates the role of digital leadership in enhancing organizational performance in Uganda’s public sector, with particular attention to the mediating effect of digital transformation. To guide this investigation, the main hypothesis is that digital transformation significantly mediates the relationship between digital leadership and organizational performance. This framing allows for a deeper understanding of how digital capabilities and leadership practices interact to influence performance outcomes in public institutions.

Literature Review

Theory

This study is grounded in the Technology-Organization-Environment (TOE) framework, initially developed by Tornatzky and Fleischer (1990), which provides a comprehensive lens for understanding the adoption and implementation of technological innovations in organizational settings. The TOE framework outlines three critical dimensions that influence technology-related decisions: technology, organization, and environment.

The technology dimension refers to the internal and external technologies relevant to the organization. In this study, digital transformation represents the technological change being implemented within public sector institutions in Uganda. It includes the adoption of digital tools, platforms, and systems aimed at improving service delivery and operational efficiency (Cheng et al., 2025). These innovations are central to modernizing public services, enhancing transparency, and driving operational excellence.

The organization dimension concerns internal characteristics such as leadership, resources, and culture. Here, digital leadership is conceptualized as a core organizational factor that drives strategic vision, digital capabilities, and readiness for innovation (Mihardjo et al., 2019; Mikalef et al., 2018). Leaders play a crucial role in influencing how digital technologies are adopted, integrated, and scaled within institutions, especially in resource-constrained public sector environments (Kyambade & Namatovu, 2025b).

The environment dimension includes the external context in which the organization operates, such as regulatory conditions, citizen expectations, and socio-economic pressures. In Uganda’s public sector, these environmental influences shape the demand for digital service delivery and affect the responsiveness of institutions to innovation pressures (ElMassah & Mohieldin, 2020; Kyambade, Kagere, et al., 2024).

By applying the TOE framework, this study positions digital leadership (organization) and digital transformation (technology) as key drivers of public sector performance, while acknowledging the broader environmental factors that shape these dynamics. This theoretical approach strengthens the study’s explanatory power by situating it within an established and empirically supported model of technological change in organizational contexts.

This aspect of the framework focuses on the technological innovations and digital tools that digital leaders utilize to drive transformation within public sector organizations (Vial, 2019). It includes the assessment of digital leadership capabilities, technological infrastructure, and the adoption of digital technologies. This element examines the internal organizational factors that impact digital transformation initiatives, such as organizational culture, structure, resources, and capabilities (Bindel Sibassaha et al., 2025). The TOE framework helps in understanding how digital leadership influences these organizational factors to achieve successful digital transformation (Baker, 2012). Organizational performance metrics, particularly in the public sector, align with TOE by evaluating the outcomes of digital transformation efforts in terms of efficiency, service delivery, and stakeholder satisfaction. The framework considers how digital leaders leverage technology to drive change. This includes the implementation of digital tools and platforms that facilitate digital transformation in public sector organizations (DeLone & McLean, 2003; Dwivedi et al., 2019). It examines the preparedness of the organization to undergo digital transformation, influenced by the leadership’s vision, strategic goals, and resource allocation. The framework accounts for the unique challenges faced by public sector organizations in developing economies, such as limited infrastructure, regulatory hurdles, and socio-economic factors that impact digital transformation efforts.

Digital Leadership and Organizational Performance

Digital leadership is branded by the ability to guide organizations through digital transformation, which involves integrating digital technologies in all aspects of business operations to achieve strategic objectives (Cheng et al., 2025). Leaders who exhibit digital leadership are adept at fostering a digital culture, encouraging innovation, and driving change (Wang et al., 2022). According to Kane (2019), effective digital leaders possess a combination of technical proficiency, strategic vision, and change management skills. Numerous studies have explored the association between digital leadership and organizational performance. Research indicates that digital leadership positively impacts various performance metrics, including operational efficiency, customer satisfaction, and financial performance. For instance, a study by Shin et al. (2023) found that organizations with strong digital leadership are more likely to achieve higher levels of digital maturity, which in turn led to better performance outcomes. Digital leadership facilitates the alignment of digital initiatives with organizational goals, ensuring that technological investments translate into tangible benefits. Leaders who successfully implement digital strategies can improve decision-making processes, enhance employee productivity, and foster a culture of continuous improvement (Ahsan, 2025). Additionally, digital leadership is associated with improved agility and responsiveness to market changes, enabling organizations to maintain a competitive edge (Kyambade, Mugambwa, Namuddu, & Namatovu, 2024; Kyambade, Mugambwa, Nkurunziza, et al., 2024; Probojakti et al., 2025). While existing research underscores the importance of digital leadership in enhancing organizational performance (Lu et al., 2024), several gaps remain. There is a limited understanding of the specific competencies and behaviors that define effective digital leaders. Future studies should aim to develop comprehensive frameworks that outline the essential skills and attributes of digital leaders (Hanelt et al., 2021). Most studies on digital leadership have focused on private sector organizations, with limited attention given to public sector institutions. Given the unique challenges faced by public sector organizations, more studies are needed to explore how digital leadership can be leveraged to improve public service delivery and governance (Mergel et al., 2019). The influence of digital leadership on organizational performance in different cultural and geographical contexts remains underexplored. Comparative studies across diverse settings can provide valuable insights into how digital leadership practices vary and what factors influence their effectiveness (Banks et al., 2022).

H1: Digital leadership positively relates with organizational performance

Digital Leadership and Digital Transformation

Digital transformation is the incorporation of digital technologies into all aspects of a company, radically altering how it runs and provides value to consumers. This process involves a shift from traditional to digital business models, requiring significant changes in organizational culture, structure, and processes (Probojakti et al., 2025). The influence of digital transformation is profound, affecting various aspects of organizational performance. Research has shown that successful digital transformation can lead to improved operational efficiency, enhanced customer experiences, and increased innovation (Ahsan, 2025). Moreover, organizations that effectively navigate digital transformation are better positioned to respond to market disruptions and maintain a competitive edge (Probojakti et al., 2025). The association between digital leadership and digital transformation is well-documented in the literature. Digital leaders play a crucial role in aligning digital strategies with organizational goals, driving digital transformation initiatives, and fostering a culture that embraces change and innovation (Hanelt et al., 2021). According to Magesa and Jonathan (2022), the presence of strong digital leadership is a key determinant of digital transformation success. Digital leadership facilitates the adoption of digital technologies by promoting a vision of digital change, mobilizing resources, and guiding the organization through the complexities of the transformation process. Studies have shown that organizations with effective digital leadership are more likely to achieve higher levels of digital maturity and realize the benefits of digital transformation (Shin et al., 2023). The need for continuous learning and adaptation in a rapidly evolving digital landscape poses additional challenges for digital leaders (Hanelt et al., 2021). While significant progress has been made in understanding the role of digital leadership in digital transformation, several gaps remain. There is a limited understanding of the specific competencies and behaviors that define effective digital leaders. Future research should aim to develop comprehensive frameworks that outline the essential skills and attributes of digital leaders (Hanelt et al., 2021). Most research on digital leadership and transformation has focused on large, private sector organizations, with limited attention given to small and medium-sized enterprises (SMEs) and public sector institutions. Given the unique challenges faced by these organizations, more studies are needed to explore how digital leadership can be leveraged in diverse organizational contexts (Mergel et al., 2019; Tushabe et al., 2023). The influence of digital leadership on digital transformation in different cultural and geographical contexts remains underexplored. Comparative studies across diverse settings can provide valuable insights into how digital leadership practices vary and what factors influence their effectiveness (Banks et al., 2022).

H2: Digital leadership positively relates with digital transformation

Digital Transformation and Organizational Performance

Digital transformation encompasses the implementation and adoption of digital technologies such as cloud computing, artificial intelligence, big data analytics, and the Internet of Things. These technologies enable organizations to enhance operational efficiency, improve customer experiences, and create new business models (Ahsan, 2025; Kyambade et al., 2023). Vial (2019) and Kayanja et al. (2025) defines digital transformation as “a process that aims to improve an entity by triggering significant changes in its properties through computing, communication, combinations of information, and connectivity technologies.” This broad definition captures the essence of DT as a multifaceted phenomenon that impacts various aspects of organizational performance. The impact of digital transformation on organizational performance is profound and multi-dimensional. Research indicates that successful digital transformation can lead to Digital technologies streamline processes, reduce costs, and enhance productivity (Kyambade, Namatovu, Ssentumbwe, & Tushabe, 2025; Probojakti et al., 2025). For example, the automation of routine tasks can free up employees to focus on higher-value activities. Digital transformation enables organizations to better understand and meet customer needs through personalized services and improved responsiveness (Ahsan, 2025; Kyambade, Mugambwa, et al., 2023; Kyambade, Namuddu, et al., 2023). DT fosters a culture of innovation by encouraging experimentation and the adoption of new business models. It also facilitates the development of new products and services (Henriette et al., 2016). Organizations that effectively implement digital transformation are better positioned to respond to market changes and disruptions, thereby gaining a competitive edge (Shin et al., 2023). Additionally, aligning digital transformation initiatives with overall business strategy and ensuring sustained leadership commitment are critical for success (Kyambade, Namubiru, et al., 2025; Probojakti et al., 2025). While the literature on digital transformation and organizational performance is extensive, several gaps remain: Much of the existing research focuses on large, multinational corporations. There is a need for more studies examining the impact of digital transformation on small and medium-sized enterprises (SMEs) and organizations in developing countries (Sebastian et al., 2017). Most studies provide a snapshot of digital transformation at a single point in time. Longitudinal research is needed to understand the long-term effects of DT on organizational performance and to capture the dynamic nature of the transformation process (Vial, 2019). There is a lack of comprehensive frameworks that integrate the various dimensions of digital transformation and their influence on organizational performance. Future research should aim to develop models that consider the interplay between technology, strategy, and organizational culture (Hanelt et al., 2021). Different sectors face unique challenges and opportunities in digital transformation. More sector-specific studies are needed to provide tailored insights and recommendations for industries such as healthcare, education, and public services (Ahsan, 2025; Kyambade, Tushabe, et al., 2025).

Despite the growing body of literature on the impact of digital transformation (DT) on organizational performance, several gaps persist that need to be addressed to advance the understanding of this relationship: Most studies focus on organizations in sectors that are already technology-intensive, such as information technology, finance, and manufacturing. However, the effects of digital transformation in non-technological or traditional industries, such as agriculture, healthcare, education, and public services, are relatively underexplored. These sectors face different challenges in adopting digital tools and platforms, including issues of regulatory compliance, workforce digital literacy, and infrastructural limitations. More research is needed to understand how digital transformation manifests in these understudied sectors and the unique strategies required for success (Sebastian et al., 2017). In developing economies, organizations may face cultural and institutional barriers that affect the adoption and success of digital transformation. Factors such as digital infrastructure limitations, lack of access to capital, and government regulations may pose significant challenges to effective transformation. Additionally, cultural attitudes toward technology adoption, innovation, and change management in different regions can impact how digital transformation is perceived and implemented. Our research explores the unique barriers and facilitators of digital transformation in developing economies, providing insights into context-specific strategies for overcoming these challenges.

H3: Digital transformation positively relates with organizational performance

Mediation of Digital Transformation on Digital Leadership and Organizational Performance

The role of digital transformation as a mediator between digital leadership and organizational performance is critical. Digital leaders drive digital transformation by setting strategic directions, mobilizing resources, and fostering an environment conducive to change and innovation (Magesa & Jonathan, 2022; Mugambwa et al., 2024). The success of these transformation efforts, in turn, significantly impacts organizational performance. Digital leaders ensure that digital transformation initiatives are aligned with the organization’s strategic goals. This alignment is crucial for realizing the potential benefits of digital technologies, such as improved customer satisfaction and efficiency (Shin et al., 2023; Kyambade & Namatovu, 2025a, 2025c). Effective digital transformation requires managing resistance to change, upskilling employees, and modifying organizational structures and processes. Digital leaders play a vital role in facilitating these changes, thereby enhancing the likelihood of successful transformation (Probojakti et al., 2025). Digital transformation fosters a culture of innovation and agility, essential for maintaining competitive advantage in a dynamic market. Digital leaders encourage experimentation and learning, which are critical for sustaining performance improvements over time (Ahsan, 2025). Despite the growing body of research on digital transformation, digital leadership, and organizational performance (Cheng et al., 2025), several gaps remain. While theoretical frameworks suggest that digital transformation mediates the association between digital leadership and organizational performance (Hanelt et al., 2021; Qiao et al., 2024), empirical studies testing this mediation effect are limited. More research is needed to quantify the extent of this mediation and to identify specific factors that influence its effectiveness. Most studies focus on large, multinational corporations, with limited attention given to small and medium-sized enterprises (SMEs) and organizations in developing economies. Research that explores how digital transformation mediates the association between digital leadership and performance in diverse organizational contexts is needed (Cheng et al., 2025; Sebastian et al., 2017; Tushabe et al., 2025). Different industries face unique challenges and opportunities in digital transformation. Sector-specific studies can provide tailored insights into how digital leadership drives transformation and performance in various contexts, such as healthcare, education, and public services (Ahsan, 2025; Kyambade, Bartazary, Namatovu, & Tushabe, 2024).

While the existing literature underscores the importance of digital transformation as a mediator between digital leadership and organizational performance, several notable gaps remain that need to be addressed. Although theoretical frameworks suggest that digital transformation mediates the relationship between digital leadership and organizational performance (Hanelt et al., 2021; Qiao et al., 2024), there is a shortage of empirical studies testing this mediation effect. The majority of the existing research provides conceptual models or case studies (Kyambade, Namatovu, & Ssentumbwe, 2025), but few studies have rigorously quantified how digital transformation facilitates the link between leadership and performance outcomes. A significant proportion of the literature focuses on large, multinational corporations, often in developed economies, which leaves a gap in understanding how digital transformation operates in small and medium-sized enterprises (SMEs) or organizations in developing economies. Research addressing this gap could provide valuable insights into how digital leadership influences transformation efforts in resource-constrained environments or smaller organizational settings. While much of the research has explored the general link between digital leadership, transformation, and performance, there is limited attention to sector-specific dynamics. Different industries, such as healthcare, education, public services, and manufacturing, face unique challenges and opportunities in implementing digital transformation. Tailored studies focusing on specific sectors would enhance understanding of how digital leadership and transformation interact to drive performance improvements in varying contexts (Ahsan, 2025; Kyambade, Mugambwa, Namuddu, Namatovu, & Kwemarira, 2024; Kyambade, Abdul, & Namatovu, 2023). There is a gap in the identification of specific factors that influence the effectiveness of digital transformation as a mediator between leadership and performance. While the literature emphasizes the importance of digital leaders in mobilizing resources and fostering innovation (Magesa & Jonathan, 2022), more research is needed to explore how variables such as employee resistance, organizational culture, and upskilling contribute to or hinder the mediation effect.

H4: Digital transformation mediates Digital leadership and organizational performance

Figure 1 illustrates the conceptual model guiding this study. The model explores the relationship between digital leadership and organizational performance in Uganda’s public sector, while examining the mediating role of digital transformation. The model suggests that digital leadership influences organizational performance both directly and indirectly through digital transformation.

Figure 1.

Conceptual model.

Methodology

Sampling

Employees from several Ugandan public-sector institutions provided data. As a result, in the current study, we apply metrics of digital leadership (DL), digital transformation (DT), and organizational performance (OP). We approached personnel at the selected corporate groups through emails and in-person visits. Respondents were guaranteed anonymity and that the results would be used strictly for scholarly purposes. To perform multiple regressions, the item-to-response strategy required a minimum of 20 replies per item in the questionnaire, for a total of 440 responses (Chan et al., 2022). Furthermore, data obtained from public sector enterprises indicates heterogeneity in the sample, which increases statistical power (Valentine et al., 2010). The study adhered to the Declaration of Helsinki, anonymized participation was emphasized and data was used for academic research only. Thus, 590 complete replies were received from various organizations over a 3-month period. Of the total 590 replies, 362 were male (61.4%) and 228 were female (38.6%). The average age of responders was 31.14 years. The majority of respondents (391, 66.2%) had employment experience ranging from 0 to 6 years. Furthermore, a high proportion of respondents (488, 82.7%) had a permanent position in their firms, whereas 102 (17.3%) were on temporary assignment (see Table 1).

Table 1.

Demographic Characteristics of Respondents (N = 590).

Variable	Category	Frequency (n)	Percentage (%)
Gender	Male	362	61.4
	Female	228	38.6
Age group	20–25 years	106	18.0
	26–30 years	211	35.8
	31–35 years	147	24.9
	36–40 years	79	13.4
	Above 40 years	47	8.0
Work experience	0–6 years	391	66.2
	7 years and above	199	33.8
Employment Status	Permanent	488	82.7
	Temporary	102	17.3

We carefully selected individuals who were involved in or had significant knowledge of digital transformation processes. The selection was purposive, targeting employees in managerial, operational, and IT roles within the public-sector institutions. These roles are closely linked to implementing and overseeing digital initiatives, as well as assessing organizational performance. Further, respondents were asked to participate based on their ability to evaluate key performance metrics, such as service delivery efficiency, cost reduction, and overall digital transformation outcomes. For example, individuals in leadership or managerial positions with direct oversight of digital transformation projects were prioritized. This ensured that participants had relevant experience and knowledge to accurately respond to questions such as, “To what extent have digital initiatives improved service delivery efficiency or cost reduction?” To ensure that respondents were qualified to provide informed opinions, we conducted a preliminary screening process during participant recruitment. This process involved verifying their involvement with digital transformation initiatives and assessing their knowledge of organizational performance metrics. By doing so, we ensured that only employees with relevant expertise and firsthand experience were included in the final sample, which strengthens the validity of the findings.

Measurement of Variables

The survey was administered in English and all variables were measured using a 5-point Likert scale (5 “strongly agree” to 1 “strongly disagree”). For multivariate analysis, we used the average of all the items in each measure (Nakra & Kashyap, 2025).

Digital leadership (DL) was measured using vision and strategy, digital literacy, and innovative management (Magesa & Jonathan, 2022; Schwarzmüller et al., 2018; Shin et al., 2023). The sample questions used to measure digital leadership were “To what extent does the leadership develop and implement strategies that align digital initiatives with organizational goals?,”“How proficient are the leaders with current digital tools and technologies relevant to the organization?,” and “How supportive is the leadership of new ideas and digital initiatives proposed by employees?” Digital transformation (DT) was measured using Process Digitalization, Technology Adoption and employee engagement (Probojakti et al., 2025; Sebastian et al., 2017; Vial, 2019). The sample questions used to measure digital transformation were “To what extent have core processes been digitized within your organization?,”“How quickly does your organization adopt new digital technologies?,” and “To what extent are employees trained to use new digital systems?” Organizational performance (OP) was measured using Service Delivery and Operational Efficiency as per (Bititci et al., 2012; Kaplan & Norton, 2005; Neely et al., 2005). The sample questions were “To what extent have digital initiatives improved service delivery efficiency?” and “To what extent has cost reduction been achieved through digital initiatives?” respectively.

We accounted for demographic characteristics such as employee age, gender, work experience, kind of job, and type of organization. Previous studies have discussed the potential effects of these variables on performance of organization (Kalia & Bhardwaj, 2019; Konya et al., 2016; Nakra & Kashyap, 2025). All participants were informed of the purpose of the study, assured of confidentiality and anonymity, and provided informed consent. Participation was voluntary, and respondents could withdraw at any time without consequence. The collected data were used strictly for academic research purposes.

Results

Confirmatory Factor Analysis

Before testing the hypotheses, we conducted Confirmatory Factor Analysis (CFA) using IBM AMOS 20.0 to assess reliability and validity of the measurement model in the Ugandan context. Following Hu and Bentler (1999), acceptable model fit was indicated by CFI and TLI > 0.90 and RMSEA ≤ 0.08.

The initial three-factor model yielded the following fit indices: χ²(232) = 1,028.173, CFI = 0.809, TLI = 0.788, RMSEA = 0.085. After reviewing the modification indices, we allowed the error terms of items 1 and 2 under employee engagement to correlate, improving model fit slightly: χ²(231) = 1,061.047, CFI = 0.805, TLI = 0.803, RMSEA = 0.083. In contrast, a single-factor model provided a poorer fit: χ²(234) = 1,465.701, CFI = 0.754, TLI = 0.737, RMSEA = 0.088.

To check for common method variance, we applied Harman’s single-factor test. A principal components analysis revealed that a single factor accounted for only 39.98% of the variance—well below the 50% threshold suggested by Podsakoff et al. (2003). Hence, common method bias is unlikely to be a concern.

Validity and Reliability of constructs

We assessed internal consistency using both Cronbach’s alpha and composite reliability (CR). According to Hair et al. (2010), values >0.70 indicate acceptable reliability. All constructs met this threshold. We also assessed convergent validity using Average Variance Extracted (AVE), with values >0.50 indicating good validity (Fornell & Larcker, 1981). The results are presented in Table 2.

Table 2.

Construct Validity and Reliability.

Variable	Constructs	Loadings	Reliability	AVE
Digital leadership	DL1	0.716	.801	0.764
	DL2	0.717
	DL3	0.745
	DL4	0.708
	DL5	0.787
Digital transformation	DT1	0.863	.837	0.751
	DT2	0.808
	DT3	0.891
	DT4	0.786
	DT5	0.811
Organizational performance	OP1	0.716	.820	0.707
	OP2	0.777
	OP3	0.831
	OP4	0.797
	OP5	0.828

Source. Primary data.

Descriptive statistics

Table 3 presents the means, standard deviations, correlations, and variance inflation factors (VIF). Digital leadership (DL) was significantly correlated with digital transformation (DT; r = .59, p < .01) and organizational performance (OP; r = .56, p < .01). DT was also significantly correlated with OP (r = .46, p < .01).

Table 3.

Descriptive Analyses.

Variable	Mean	SD	1	2	3	4	5	6	7	8
Age	31.14	4.99
Gender	1.44	0.35	0.09*
Experience	1.58	0.65	0.69**	0.02
Nature of employee	1.10	0.31	0.00	0.08*	−0.03
Nature of organization	1.98	0.34	−0.07*	−0.01	−0.04	0.04
DL	2.89	0.70	−0.05	−0.04	0.00	−0.10**	0.02	0.89 (0.78)
DT	2.47	0.62	−0.04	0.00	−0.03	−0.10	−0.00	0.59**	0.88 (0.74)
OP	2.97	0.69	−0.04	−0.02	0.00	−0.10	0.02	0.56**	0.46**	0.74 (0.88)
VIF	—	—	2.17	1.01	2.15	1.02	1.00	1.63	1.64	—

Significant correlation at 2-tailed (0.05 level).

Significant correlation at 2-tailed (0.01 level).

Hypothesis Testing

We tested the hypotheses using Hayes’ PROCESS Macro Model 4 (Hayes, 2018; Nakra & Kashyap, 2025) in SPSS 20, with 5,000 bootstrap samples and 95% bias-corrected confidence intervals (CI). Control variables included age, gender, work experience, nature of employment, and organization.

Table 4 shows that digital leadership significantly predicts organizational performance (β = .54, t = 18.04, p < .01), accounting for 27% of the variance (R² = .27). Thus, H1 is supported. Digital leadership positively influences digital transformation (β = .52, t = 19.83, p < .01), with the model explaining 38% of the variance (R² = .38), supporting H2. Digital transformation significantly predicts organizational performance (β = .29, t = 6.48, p < .01), supporting H3. The indirect effect of digital leadership on organizational performance via digital transformation is significant (β = .14, 95% CI [0.21, 0.31]), confirming partial mediation. The direct effect remains significant but reduced (from β = .54 to β = .35). Total variance explained in the model is 34% (R² = .34), supporting H4.

Table 4.

PROCESS Macro Regression Results.

	Organizational performance—total effect			Digital transformation—direct effect			Organizational performance—indirect performance
Variables	B	T	p	β	t	p	β	t	p
Constant	1.78	7.06	0.00	1.64	7.25	0.00	1.24	4.87	0.00
Age	−0.00	−0.10	0.86	0.00	0.71	0.41	−0.00	−0.31	0.67
Gender	−0.00	−0.15	0.81	0.04	1.30	0.13	−0.01	−0.55	0.50
Experience	0.00	0.00	0.95	−0.05	−1.50	0.10	0.01	0.44	0.59
Nature of employee	−0.08	−1.04	0.11	−0.06	−1.41	0.13	−0.05	−1.09	0.22
Nature of organization	0.01	0.40	0.61	−0.02	−0.59	0.48	0.02	0.61	0.47
Digital leadership	0.54	18.0	0.00	0.52	19.83	0.00	0.35	9.27	0.00
Digital transformation	—	—	—	—	—	—	0.29	6.48	0.00
F		55.14			70.57			59.34
R ²		.27			.38			.34
Indirect, direct, and total effects of digital leadership and organizational performance
		Effect		SE		LLCI		ULCI
Total effect of DL on OP		0.54		0.02		0.48		0.59
Direct effect of DL on OP		0.35		0.02		0.37		0.43
Indirect effect of DL on OP through DT		0.14		0.02		0.21		0.31

Note. All effects significant at p < .001.

The results also show a positive association between digital leadership and our proposed mediator, digital transformation (β = .52, t = 19.83, p < .01). The model explained 38% of the variation (R² = .38), hence supporting Hypothesis 2. Digital transformation is favorably associated with organizational performance (β = .29, t = 6.48, p < .01), supporting Hypothesis 3. The study found that digital transformation, as a mediator, reduced the effect of digital leadership and organizational performance from β = .54, t = 18.04, p < .01 to β = .35, t = 9.27, p < .01 while remaining significant. In addition, digital leadership has a favorable and significant indirect effect and organizational performance throughout digital transformation (β = .14, p < .01). The findings consequently give support for Hypothesis 4. Overall, this model explained 34% of the variance (R² 50.34) in the dependent variable, organizational performance.

Discussion

The findings of our study reveal a significant positive association between digital leadership and organizational performance in public sector organizations. This result aligns with previous research of Magesa and Jonathan (2022) highlighted that digital leadership, characterized by the ability to envision and drive digital initiatives, is crucial for achieving high performance in organizations. Leaders who possess strong digital competencies and strategic vision can effectively guide their organizations through the complexities of digital transformation, thereby enhancing overall performance. Shin et al. (2023) also emphasized that digital leadership is a key driver of business transformation, leading to improved operational efficiency, innovation, and customer satisfaction. This study’s findings are consistent with their assertion that digital leaders play a critical role in fostering an environment conducive to digital innovation and performance improvement. Moreover, Schwarzmüller et al. (2018) found that leaders who embrace digital tools and strategies can significantly impact their organizations’ ability to adapt to changing technological landscapes. Their study demonstrated that digital leadership is associated with better organizational outcomes, including increased efficiency and effectiveness, which aligns with the results of this study.

The findings further reveal a significant positive association between digital leadership and digital transformation in public sector organizations. This result aligns with existing research and provides further evidence of the critical role that digital leadership plays in driving digital transformation efforts within the public sector. For instance, Magesa and Jonathan (2022) emphasized the importance of leadership in navigating digital transformation, highlighting that leaders who possess a clear vision and strategic direction are pivotal in implementing successful digital initiatives. Such leaders are essential in fostering an environment conducive to digital change and innovation. Shin et al. (2023) also underscored the role of digital leadership in enabling organizations to leverage digital technologies effectively. They argued that leaders who understand the digital landscape can better align technological advancements with organizational goals, thereby facilitating a smoother and more effective transformation process. This study’s findings reinforce their assertion that digital leadership is a key enabler of digital transformation. Moreover, findings from Sebastian et al. (2017) indicate that organizations with strong digital leadership are more likely to achieve successful digital transformations. Their research demonstrated that leaders who prioritize digital initiatives and possess the skills to manage digital projects significantly influence the extent and success of digital transformation efforts. This study’s results are consistent with these insights, further validating the vital role of digital leadership in the transformation process.

The positive association between digital transformation and organizational performance is well-supported by previous studies. For instance, Vial (2019) emphasized that digital transformation, characterized by the integration of digital technologies in various aspects of an organization, leads to improved operational efficiency, innovation, and customer satisfaction. This study’s findings align with Vial’s assertion, highlighting that effective digital transformation initiatives significantly enhance organizational performance. Similarly, a study by Probojakti et al. (2025) found that organizations that embrace digital transformation are better positioned to achieve higher performance levels. Their research demonstrated that digital technologies enable organizations to streamline processes, reduce costs, and improve service delivery, leading to better overall performance. The results of this study reinforce these findings, underscoring the importance of digital transformation in achieving performance improvements. Moreover, Sebastian et al. (2017) identified that digital transformation initiatives contribute to enhanced organizational agility and responsiveness. Their research indicated that organizations undergoing digital transformation can adapt more quickly to changing market conditions and stakeholder needs, resulting in better performance outcomes. This study’s results are consistent with these insights, further validating the positive influence of digital transformation on organizational performance.

The mediation role of digital transformation in the association between digital leadership and organizational performance aligns with the findings of various studies. For instance, Magesa and Jonathan (2022) emphasized that digital leadership involves not only the adoption of digital technologies but also the transformation of organizational processes and culture. Leaders who drive digital initiatives effectively enable their organizations to leverage these technologies to enhance performance. Shin et al. (2023) also highlighted that digital leadership is pivotal in guiding organizations through the digital transformation complexities. Their research showed that leaders who prioritize digital innovation and foster a culture of continuous improvement facilitate successful digital transformation, which in turn leads to better organizational outcomes. This study’s findings reinforce their assertion by demonstrating that digital transformation serves as the mechanism through which digital leadership impacts performance. Moreover, a study by Gong and Ribiere (2021) found that digital transformation efforts, when led by effective digital leaders, significantly enhance organizational capabilities and performance. Their research indicated that leaders who champion digital initiatives create an environment that supports technological integration and process optimization, resulting in improved organizational performance. This study’s results are consistent with these insights, further validating the mediating role of digital transformation.

Additionally, the findings show that while digital leadership has a significant positive effect on organizational performance, the inclusion of digital transformation reduces this direct effect. This counterintuitive result may be attributed to the complex and resource-intensive nature of digital transformation initiatives in the context of developing economies like Uganda. Specifically, while digital leaders may initiate ambitious transformation efforts, the transitional phase can disrupt workflows, overstrain limited infrastructure, and create resistance among staff due to increased demands for new competencies. Such turbulence may temporarily suppress the immediate benefits of digital leadership on performance outcomes. This aligns with prior studies (Alrub et al., 2025; Tenggono et al., 2025) that caution that digital transformation often involves initial performance dips before long-term gains are realized. It also suggests that digital leadership’s effectiveness depends on contextual readiness and supportive organizational structures that enable the smooth execution of transformation agendas.

Public sector organizations can benefit from this mediation effect by ensuring that their digital leaders are equipped with the skills and vision necessary to drive transformation. This includes investing in training and development programs that enhance leaders’ digital competencies and their ability to manage change effectively. Additionally, organizations should prioritize digital transformation initiatives that align with their strategic goals and performance objectives.

Practical and Theoretical implications

Our study underscores the importance of cultivating digital leadership capabilities within public sector institutions in Uganda and other developing nations. We suggest investing in leadership training programs that emphasize digital skills and strategic thinking to effectively harness technology for organizational improvement. Insights from our study can guide public sector administrators in Uganda to prioritize digital transformation initiatives that streamline processes, reduce administrative burdens, and enhance service delivery efficiency. This includes leveraging digital tools for citizen engagement, data-driven decision-making, and operational transparency. Understanding the mediating role of digital transformation helps policymakers and administrators allocate resources effectively. This includes prioritizing investments in digital infrastructure, cybersecurity measures, and capacity-building initiatives to support sustainable digital governance practices. Our study extends to fostering collaboration with stakeholders, including citizens, private sector partners, and international organizations. By communicating the benefits of digital leadership and transformation initiatives, public sector entities can garner support, feedback, and participation in advancing governance objectives. Implementing frameworks for monitoring and evaluating the impact of digital leadership and transformation initiatives becomes critical. Establishing key performance indicators (KPIs) related to efficiency gains, service quality improvements, and citizen satisfaction can guide continuous improvement efforts.

Our study extends the TOE framework by offering a novel theoretical perspective that integrates digital leadership and digital transformation within the specific context of developing nations, particularly Uganda. Unlike prior studies that have examined these constructs in isolation or in more developed settings, our research emphasizes digital leadership as a strategic organizational capability within the TOE model, positioning it as a central organizational factor that shapes the adoption and implementation of digital transformation initiatives. By empirically testing the mediating role of digital transformation between digital leadership and public sector performance, the study advances theoretical understanding of how internal processes translate leadership intent into measurable outcomes, an area that remains underexplored in the context of the TOE framework.

Furthermore, we operationalize the TOE components through measurable variables aligned with public sector dynamics: digital infrastructure and tools (Technology), leadership and management practices (Organization), and regulatory or institutional environments (Environment). This approach not only clarifies the applicability of the TOE framework but also provides a structured lens through which digital transformation processes in resource-constrained environments can be understood. Importantly, the study introduces contextual sensitivity by situating the TOE framework in the realities of developing nations, where leadership often compensates for limited technological readiness and environmental volatility. This contextualization contributes theoretical novelty by demonstrating how leadership-driven transformation strategies operate in environments with distinct socio-economic and institutional constraints, thereby enriching the explanatory power of the TOE framework in non-Western settings.

Limitations of the Study

Despite the robust methodology and strong statistical analysis, this study is subject to several limitations that should be acknowledged. First, the use of a cross-sectional research design limits the ability to make causal inferences about the relationships between digital leadership, digital transformation, and organizational performance. Longitudinal studies would provide deeper insight into how these relationships evolve over time, particularly in response to dynamic technological or policy changes within Uganda’s public sector.

Second, the reliance on self-reported data introduces the potential for response bias, including social desirability bias. While efforts were made to ensure anonymity and encourage honest responses, the subjective nature of the survey responses could have influenced the accuracy of the findings. Additionally, although Harman’s single-factor test suggested that common method bias was not a significant concern, the use of a single survey instrument for all variables increases the risk of inflated associations.

Third, the study focused exclusively on public-sector institutions in Uganda, which may limit the generalizability of the findings to private-sector organizations or other low-income countries with different governance, cultural, or technological environments. Furthermore, while purposive sampling ensured that only participants with relevant experience in digital transformation were included, it may have excluded broader employee perspectives that are equally valuable for understanding organizational performance in digital contexts.

Finally, although demographic variables were included as controls, other contextual factors such as institutional size, funding levels, or digital infrastructure maturity were not fully accounted for and may influence the observed relationships. Future studies could benefit from integrating such organizational-level variables to build a more comprehensive model of digital transformation outcomes.

Conclusion and Future Directions

This study provides clear evidence of the pivotal role digital leadership plays in enhancing organizational performance in public sector organizations. Effective digital leadership characterized by strategic vision and digital competence is strongly linked to both improved organizational outcomes and the success of digital transformation efforts. The findings confirm that leaders who champion digital initiatives not only directly influence performance but also indirectly enhance it by enabling successful digital transformation.

Moreover, the study establishes that digital transformation positively affects organizational performance through improved efficiency, service delivery, and stakeholder satisfaction. The mediation effect observed highlights the strategic importance of investing in digital leadership to achieve sustainable performance improvements.

To maximize the benefits of digital leadership and transformation, public sector organizations should prioritize the development of digital leadership capabilities through targeted training programs and incorporate digital competencies into leadership evaluation and succession planning. Investments in digital infrastructure and supportive change management processes are essential to facilitate effective digital transformation and sustain improved organizational performance. Future research should extend the understanding of digital leadership’s impact by examining its influence on innovation capacity, employee engagement, and stakeholder trust within the public sector. Additionally, further studies could identify which specific digital technologies and transformation practices most effectively drive performance improvements, as well as investigate the long-term sustainability of these gains across diverse public sector environments. These insights will provide valuable guidance for policymakers and practitioners aiming to foster resilient, digitally-enabled public organizations.

Footnotes

ORCID iD

Mahadih Kyambade

Ethical Considerations

All research procedures involving human participants were conducted with the guidelines and regulations in accordance with the Declaration of Helsinki.

Consent to Participate

All participants provided written consent prior to participating.

Author Contributions

Afulah Namatovu and Mahadih Kyambade: Involved in the conception and design, or analysis and interpretation of the data; the drafting of the paper, revising it critically for intellectual content; the final approval of the version to be published; and agreement to be accountable for all aspects of the work. The author has read and approved the final version of the manuscript.

Funding

The authors received no financial support for the research, authorship, and/or publication of this article.

Declaration of Conflicting Interests

The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Data Availability Statement

The data presented in this study are available on request from the corresponding author.

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