LEADERSHIP EFFECTIVENESS AND DIGITAL TECHNOLOGY ADOPTION IN MALAYSIA: INSIGHTS FOR NAVIGATING INDUSTRY

Abstract

In Malaysia’s ongoing transition toward Industry 4.0 and the MyDIGITAL Blueprint, effective leadership has become the cornerstone of successful digital transformation. This study examines how leadership effectiveness mediates the relationship between key determinants—perceived usefulness, perceived ease of use, cost-effectiveness, communication effectiveness, and digital literacy—and digital technology adoption across Malaysian organizations. Employing a quantitative design with 351 respondents from diverse sectors and analyzed via Partial Least Squares Structural Equation Modelling (PLS-SEM), the results reveal that leadership effectiveness exerts a significant mediating influence, transforming readiness and perceptions into actual adoption outcomes. Notably, perceived ease of use and cost-effectiveness show weak direct effects but become impactful through leadership mediation, underscoring leaders’ role in simplifying complexity, aligning strategy, and driving behavioral change. Theoretically, this study extends the Technology Acceptance Model (TAM) and Technology-Organization-Environment (TOE) frameworks by embedding leadership as a central mediator. Practically, it provides actionable insights for policymakers, organizational leaders, and educators seeking to strengthen Malaysia’s digital readiness and competitiveness. The findings advocate for digital leadership development, cross-sectoral collaboration, and sustainable adoption strategies that empower Malaysia’s government, SMEs, and service industries to thrive in a rapidly evolving global digital economy.