Managing Change for Sustainability: An Integrated Model of Digital Capability, Leadership, Culture, and Employee Engagement

Abstract

Drawing upon the Dynamic Capabilities Theory and Transformational Leadership Theory, this research proposes a conceptual framework that integrates technological, human, and cultural dimensions of organizational change toward sustainability. Using a quantitative research design, data were collected from 385 managers and employees across various industries implementing sustainability initiatives. The hypothesized relationships were tested using Partial Least Squares Structural Equation Modeling (PLS-SEM) with SmartPLS 4.0.  The structural model results revealed that digital transformation capability, leadership commitment, and organizational culture for sustainability significantly influence change readiness. Similarly, these independent variables showed significant positive effects on employee engagement. Furthermore, both change readiness and employee engagement demonstrated strong positive relationships with sustainability performance. Mediation analysis confirmed the indirect effects, with change readiness and employee engagement serving as significant mediators in the relationships between the independent variables and sustainability performance. This study contributes to the existing literature by providing an integrated framework that highlights the critical role of change readiness and employee engagement in translating organizational capabilities and leadership commitment into tangible sustainability outcomes. The findings offer practical implications for managers seeking to enhance sustainability performance through effective change management strategies.