Digital Transformation and Innovation Capability as Determinants of Sustainable SME Performance: The Mediating Role of Organizational Agility
DOI:
https://doi.org/10.61132/jusbit.v3i2.1624Keywords:
Digital transformation, Innovation Capability, Organizational Agility, SMEs, Sustainable PerformanceAbstract
Small and medium-sized enterprises (SMEs) face growing pressure to respond to rapid digitalization, market uncertainty, and sustainability demands. This study examines the effects of digital transformation and innovation capability on sustainable SME performance and evaluates the mediating role of organizational agility. A quantitative explanatory design was employed using a cross-sectional survey of 200 SME owners and managers in Indonesia selected through purposive sampling. Data were collected through a five-point Likert-scale questionnaire and analyzed using Partial Least Squares Structural Equation Modeling. The measurement model was evaluated through indicator reliability, internal consistency reliability, convergent validity, and discriminant validity, while the structural model was assessed using path coefficients, explanatory power, effect sizes, predictive relevance, and bootstrapping. The findings demonstrate that digital transformation and innovation capability positively affect organizational agility and sustainable SME performance. Organizational agility also has a positive effect on sustainable performance and partially mediates the effects of digital transformation and innovation capability. These results indicate that digital technologies and innovative practices generate stronger economic, environmental, and social outcomes when supported by market sensing, rapid decision-making, flexible coordination, and resource reconfiguration. The study contributes to management and dynamic capability research by clarifying the organizational mechanism that converts digital and innovative resources into sustainable performance. SME managers should therefore integrate digital investment and innovation development with agile organizational practices to strengthen adaptability, competitiveness, resilience, and long-term sustainability.
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