DIGITAL LEADERSHIP AND ORGANIZATIONAL PERFORMANCE: THE MEDIATING ROLE OF EMPLOYEE INNOVATION IN MODERN BUSINESSES

Digital transformation has significantly altered how organizations operate, compete, and create value. Among the various factors driving successful transformation, digital leadership has emerged as a critical determinant of organizational performance. Leaders who embrace digital technologies, foster innovation, and encourage continuous learning create an environment where employees contribute more effectively to organizational success. This study investigates the relationship between digital leadership and organizational performance while examining employee innovation as a mediating factor. A quantitative research approach was adopted using survey responses from 260 employees working in medium and large organizations across different industries. Statistical analyses including descriptive statistics, correlation, and regression were conducted to evaluate the proposed relationships. The findings reveal that digital leadership positively influences employee innovation, which subsequently enhances organizational performance. Furthermore, employee innovation partially mediates the relationship between digital leadership and organizational performance. The study contributes to existing business literature by highlighting the strategic importance of leadership in promoting innovation and achieving sustainable competitive advantage in the digital era. The findings offer practical implications for managers, policymakers, and organizational leaders seeking to improve performance through effective leadership practices.