Identifying digital leadership's role in fostering competitive advantage through responsible innovation: A SEM-Neural Network approach

Abstract

Contemporary research suggests that digital leadership (DL) plays a pivotal role in harnessing digital transformation to drive digital development, impacting organisations, society, and the environment. Nonetheless, empirical studies on the role of DL in fostering responsible innovation (RI) for a competitive advantage (CA) remain scarce despite its significance. Drawing on the upper echelons theory, this research examines how DL, operationalised as a reflective-formative higher-order construct, influences CA with RI as the mediator and social orientation (SO) as the moderator. Data were gathered through an online survey from 150 innovative firms, and a dual-stage analysis, combining Partial Least Squares Structural Equation Modelling (PLS-SEM) and Artificial Neural Network (ANN) techniques, was performed. The PLS results indicated that DL positively influences RI, which in turn, positively contributes to CA. Additionally, SO strengthens the link between DL and RI. The subsequent ANN analysis, in alignment with the PLS findings, predicted that the role of “digital innovator” holds the greatest significance, followed by the “digital manager” and “digital enabler” roles within the spectrum of DL. Overall, these findings hold substantial implications for the fields of leadership and RI within digital organisations, shedding light on the crucial relationship between DL, RI, SO and CA.