EXPLORING THE SUSTAINABILITY BENEFITS OF DIGITAL TRANSFORMATION: THE MEDIATING ROLE OF GREEN INNOVATION IN MANUFACTURING ORGANIZATIONS IN PAKISTAN

Abstract

Digital transformation has become a critical priority for companies looking to become more sustainable in their business operations and overcome technical change and environmental challenges. This study investigates the relationships between digital transformation capabilities, green innovation (GIN), and sustainable business performance (SSP) of manufacturing organizations in Pakistan with the mediation of GIN. Specifically, it explores the relationship between digital exploitation capabilities (DXL), digital exploration capabilities (DXP), digitalization strategy adoption (DAS), and digital leadership capabilities (DLP) and GIN. Based on the dynamic capabilities theory, the study views GIN as a process for transforming digital resources and capabilities into sustainable outcomes for the organization. Using convenience sampling, 724 managers of manufacturing organizations were selected as a sample group for collecting the survey data. The proposed relationship was analyzed using the model of partial least squares (PLS-SEM). The findings on the hypotheses show positive relations between the constructs proposed and a mediating role of GIN. The study adds to the digital transformation and SSP literature by connecting different aspects of the digital capabilities to sustainable innovation in green technology in the context of manufacturing in an emergent economy. The findings have implications for managers who wish to link digital investments, leadership and innovation of their environment with the long-term sustainability of their organization.