The Mediating Role Of Digital Competency In Leadership Competency And Business Performance Relationship In The Tourism Sector Of Terengganu
DOI:
https://doi.org/10.37231/jmtp.2025.6.1.450Keywords:
Post Pandemic, Business Recovery, Digital Competency,, Leadership Competency, Small and Medium Enterprises, Tourism IndustryAbstract
In the era of digital evolution, leaders and organizations have had to quickly adapt to the challenges posed by the pandemic. This paper examines the link between leadership competency and business performance, with digital capability acting as the mediator within the context of businesses recovering from the pandemic. It explores how leaders have leveraged digital competency to drive business strategy and operations, fostering an environment of innovation and collaboration that positively impacts business performance. Focusing on the tourism industry in Terengganu, this study utilizes a questionnaire survey of 168 SMEs, providing empirical evidence for the analysis. Data analysis was conducted using Structural Equation Modelling, revealing a significant positive effect of Leadership Competencies on Business Performance and Digital Competencies, with Digital Competency playing a significant mediating role. According to the resource-based view theory, these results suggest that a company's success depends on its internal resources, capabilities, and competencies to remain competitive. Valuable internal resources, such as leadership capabilities and digital competencies, should be well-managed to achieve superior performance, especially in the digital era. This study empirically demonstrates that leadership skills are crucial for coordinating and maximizing opportunities offered by digital advancements, thereby enhancing future business performance. This study has empirically evidenced that leadership skills are imperative for coordinating and maximizing the opportunities offered by the trending digital measures, thus navigating future business performance.
This research article has been prepared under the Internal Grant e-ICBM 2021 fund, project code: UniSZA/2021/PPL/FPP(036).
Downloads
References
Aburumman, A. A. (2020). COVID-19 impact and survival strategy in business tourism market: the example of the UAE MICE industry, Humanities and Social Sciences Communications, 7 (341). https://doi.org/10.1057/s41599-020-00630-8
Afthanorhan, A., Awang, Z., & Aimran, N. (2020). Five common mistakes for using partial least squares path modeling (PLS-PM) in management research. Contemporary Management Research, 16(4), 255-278.
Afthanorhan, A., Ghazali, P. L., & Rashid, N. (2021). Discriminant validity: a comparison of CBSEM and consistent PLS using Fornell & Larcker and HTMT approaches. In Journal of Physics: Conference Series, 1874(1), p. 012085. IOP Publishing.
Alldredge, M. E., & Nilan, K. J. (2000). 3M's leadership competency model: An internally developed solution. Human resource management, 39(2‐3), 133-145.
Akhtar, R., Sultana, S., Masud, M. M., Jafrin, N., & Al-Mamun, A. (2021). Consumers’ environmental ethics, willingness, and green consumerism between lower and higher income groups. Resources, Conservation and Recycling, 168, 105274.
Amit, R., & Schoemaker, P. J. (1993). Strategic assets and organizational rent. Strategic management journal, 14(1), 33-46.
Anning-Dorson, T. (2021). Organizational culture and leadership as antecedents to organizational flexibility: implications for SME competitiveness. Journal of Entrepreneurship in Emerging Economies, 13(5), 1309-1325.
Aragón-Correa, J. A., Hurtado-Torres, N., Sharma, S., & García-Morales, V. J. (2008). Environmental strategy and performance in small firms: A resource-based perspective. Journal of environmental management, 86(1), 88-103.
Asree, S., Zain, M., & Rizal Razalli, M. (2010). Influence of leadership competency and organizational culture on responsiveness and performance of firms. International Journal of Contemporary hospitality management, 22(4), 500-516.
Awang, Z., Wan Afthanorhan, W. M. A., Hui, L. S., Zainudin, N. F. S. (2023). Sem Made Simple 2.0 A Gentle Approach Of Structural Equation Modeling. PENERBIT UniSZA.
Balula, A., Moreira, G., Moreira, A., Kastenholz, E., Eusébio, C., & Breda, Z. (2019). Digital transformation in tourism education. Tourism in Southern and Eastern Europe, 5, 61-72.
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of management, 17(1), 99-120.
Barney, J., Wright, M., & Ketchen Jr, D. J. (2001). The resource-based view of the firm: Ten years after 1991. Journal of management, 27(6), 625-641.
Berk, R. A. (1990). Importance of expert judgment in content-related validity evidence. Western journal of nursing research, 12(5), 659-671.
Boxall, P., & Purcell, J. (2000). Strategic human resource management: where have we come from and where should we be going?. International journal of management reviews, 2(2), 183-203.
Branco, M. C., & Rodrigues, L. L. (2006). Corporate Social Responsibility and Resource-Based Perspectives. Journal of Business Ethics, 69(2), 111–132. http://doi.org/10.1007/s10551-006-9071-z
Branham, L. (2020). How to Become a Digital Leader: Understanding Trends and Tools. Forbes. Retrieved from https://www.forbes.com/sites/loubranham/2020/02/26/how-to-become-a-digital-leader-understanding-trends-and-tools/?sh=f9e2f64f62c6
Carr, A. (2020). COVID-19, indigenous peoples and tourism: a view from New Zealand, Tourism Geographies, pp.1-12 https://doi.org/10.1080/14616688.2020.1768433
Chen, Y. (2020). Leadership Competencies and Digital Competencies: How to Enhance Your Leadership Skills. Retrieved from https://www.g2.com/articles/leadership-competencies-and-digital-competencies-how-to-enhance-your-leadership-skills
Coff, R.W. & Kryscynski, D. (2011). Drilling for Micro-Foundadion of Human Capital Based Competitive Advantage. Journal of Management, 37(5), 1429-1443.
Cong, L.C., Thu, D.A. & Thao, V.T. (2021), The Competitiveness of SME in the Tourism Sector; The Role of Leadership Competencies, Journal of Economics and Development, 23(3), 299-316.https://jed.neu.edu.vn/Uploads/JED%20Issue/2021/Vol%2023%20No3/10-1108_JED-06-2020-0080.pdf
Crossan, M. M., & Apaydin, M. (2010). A multi‐dimensional framework of organizational innovation: A systematic review of the literature. Journal of management studies, 47(6), 1154-1191.
Crossland, C., & Hambrick, D. C. (2007). How national systems differ in their constraints on corporate executives: A study of CEO effects in three countries. Strategic Management Journal, 28(8), 767-789.
Dannenberg, P., Fuchs, M., Riedler, T., & Wiedemann, C. (2020). Digital transition by COVID‐19 pandemic? The German food online retail. Tijdschrift voor economische en sociale geografie, 111(3), 543-560.
Department of Statistics Malaysia (DOSM). (2022). Tourism Satellite Account 2021, availableat:https://www.dosm.gov.my/v1/index.php?r=column/cthemeByCat&cat=111&bul_id=NGtqNllWaTJIYm9uV0lwM0J1Y2RZQT09&menu_id=TE5CRUZCblh4ZTZMODZIbmk2aWRRQT09 (Accessed 11 October 2022).
Dijkstra, T. K., & Henseler, J. (2015). Consistent partial least squares path modeling. MIS quarterly, 39(2), 297-316.
Domínguez-Escrig, E., Mallén-Broch, F. F., Lapiedra-Alcamí, R., & Chiva-Gómez, R. (2019). The influence of leaders’ stewardship behavior on innovation success: the mediating effect of radical innovation. Journal of Business Ethics, 159, 849-862.
Dwivedi, P. S., & Verma, A. (2021). Understanding The Impact Of Covid-19 On Indian Tourism Sector. Turkish Online Journal of Qualitative Inquiry, 12(9).
Edmondson, A. C., Roberto, M. A., & Watkins, M. D. (2003). A dynamic model of top management team effectiveness: Managing unstructured task streams. The Leadership Quarterly, 14(3), 297-325.
Elkington, R., & Booysen, L. (2015). Innovative leadership as enabling function within organizations: A complex adaptive system approach. Journal of leadership studies, 9(3), 78-80.
Farahnak, L. R., Ehrhart, M. G., Torres, E. M., & Aarons, G. A. (2020). The influence of transformational leadership and leader attitudes on subordinate attitudes and implementation success. Journal of Leadership & Organizational Studies, 27(1), 98-111.
Foo, L.P., Chin,M.Y., Tan, K.L. & Phuah, K.T. (2020). The impact of COVID-19 on tourism industry in Malaysia, Current Issues in Tourism, https://doi.org/10.1080/13683500.2020.1777951
Gabryelczyk, R. (2020). Has COVID-19 accelerated digital transformation? Initial lessons learned for public administrations. Information Systems Management, 37(4), 303-309.
Gamerschlag, R., & Moeller, K. (2011). The positive effects of human capital reporting. Corporate Reputation Review, 14, 145-155.
Gatto, M. (2021). What Leaders Need to Know in the Digital Age. Forbes. https://www.forbes.com/sites/margiegatto/2021/03/19/what-leaders-need-to-know-in-the-digital-age/?sh=1b42d3ae56f3
Gebel, A. (2020). Leaders need to use digital tools to stay ahead in the competition. Forbes. Retrieved from https://www.forbes.com/sites/forbescoachescouncil/2020/03/19/leaders-need-to-use-digital-tools-to-stay-ahead-in-the-competition/#3c3c3d3b7e2e
Gillespie, P. (2018). SMEs and tourism: How small and medium-sized enterprises help to create jobs and generate revenue. Tourism Management Perspectives, 26, 23-30. doi:10.1016/j.tmp.2018.06.003
Hair, F. Jr, J., Sarstedt, M., Hopkins, L., & G. Kuppelwieser, V. (2014). Partial least squares structural equation modeling (PLS-SEM) An emerging tool in business research. European business review, 26(2), 106-121.
Harrison, P. (2013). The resource-based view: A review and assessment of its critiques. Journal of Management, 39(4), 839-858. doi:10.1177/0149206312470813
Hollenbeck, G. P., McCall Jr, M. W., & Silzer, R. F. (2006). Leadership competency models. The Leadership Quarterly, 17(4), 398-413.
Hoskisson, R. E., Hitt, M. A., Wan, W. P., & Yiu, D. (1999). Theory and research in strategic management: Swings of a pendulum. Journal of management, 25(3), 417- 456.
Hu, M.K. & Kee, D.M.H. (2021). SMEs and Business Sustainability: Achieving Sustainable Business Growth in the New Normal, Handbook of Research on Sustaining SMEs and Entrepreneurial Innovation in the Post-COVID-19 Era, https://doi.org/10.4018/978-1-7998-6632-9.ch016
Huarng, K. H., & Hui‐Kuang Yu, T. (2011). Entrepreneurship, process innovation and value creation by a non‐profit SME. Management Decision, 49(2), 284-296.
Iskamto, D., Ghazali, P. L., Aftanorhan, A., & Bon, A. T. (2020). Exploratory Factor Analysis (EFA) To Measure Entrepreneur Satisfaction. In The International Conference on Industrial Engineering and Operations Management. Detroit, MI, USA (p. 9).
Karim, W., Haque, A., Anis, Z., & Ulfy, M. A. (2020). The Movement Control Order (MCO) for COVID-19 Crisis and its Impact on Tourism and Hospitality Sector in Malaysia, International Tourism and Hospitality Journal, 3(2), 1-7
Kaushal, V. & Srivastava, S. (2021). Hospitality and tourism industry amid COVID-19 pandemic: Perspectives on challenges and learnings from India, International Journal of Hospitality Management, 92, 1-9
Khairani, A., Asrie, P. D., & Lailatul, F. R. (2021). Implementation of Porter’s Generic Strategies in Indonesian Airlines Industry During Covid-19 Pandemic (Case Study: Garuda Indonesia and AirAsia). In 4th European International Conference on Industrial Engineering and Operations Management, IEOM 2021 (pp. 842-852). IEOM Society.
Khan, S. (2020). How SMEs are Embracing Digital Marketing and Advertising Practices to Reach Potential Customers. Entrepreneur. Retrieved from https://www.entrepreneur.com/article/353863
Khan, M. A. A. & Hashim, H. (2020). The Effect of Covid-19 on Tourism and Hospitality Industry in Malaysia, Resurgence in the Post-Pandemic Era: A Conceptual Criterion, International Journal of Tourism & Hospitality Review, 7(2), pp. 54-62 https://doi.org/10.18510/ijthr.2020.726
Kiew, A., & Othman, N. (2018). The Role of Small and Medium Enterprises in Promoting Tourism in Terengganu. Tourism, Culture & Communication, 18(3), 167-179. doi:10.3727/109830418X15236495479864
Kirsten, M., & Rogerson, C. M. (2002). Tourism, business linkages and small enterprise development in South Africa. Development Southern Africa, 19(1), 29-59.
Lambert, S., & Schwab, S. (2020). Strategic digital competencies: Applying the resource-based view of the firm. Information Systems and e-Business Management, 18(1), 1-17. doi:10.1007/s10257-019-00405-6
López-Feldman, A., Chávez, C., Vélez, M. A., Bejarano, H., Chimeli, A. B., Féres, J. & Viteri, C. (2020). Environmental impacts and policy responses to Covid-19: a view from Latin America. Environmental & resource economics, 1.
Lowry, P. B., & Gaskin, J. (2014). Partial least squares (PLS) structural equation modeling (SEM) for building and testing behavioral causal theory: When to choose it and how to use it. IEEE transactions on professional communication, 57(2), 123-146.
Malaysian Association of Hotels (MAH), (2021). https://www.hotels.org.my/
Mata, F. J., Athanasopoulos, G., & O’Connor, P. (2014). Digital technology and its applications in the tourism sector. Journal of Hospitality, Leisure, Sport & Tourism Education, 13(1), 1-15. doi:10.1016/j.jhlste.2014.03.003
McCall, M. W. (2010). Recasting leadership development. Industrial and organizational psychology, 3(1), 3-19.
McFarlin, D. B., & Sweeney, P. D. (1992). Distributive and procedural justice as predictors of satisfaction with personal and organizational outcomes. Academy of management Journal, 35(3), 626-637.
Müller, R., & Turner, R. (2010). Leadership competency profiles of successful project managers. International Journal of project management, 28(5), 437-448.
Nofal, A. M., Cacciotti, G., & Lee, N. (2020). Who complies with COVID-19 transmission mitigation behavioral guidelines?. PloS one, 15(10), e0240396.
Penrose, E. T. (1959). The Theory of the Growth of the Firm. New York: John Wiley.
Pillay, M., & Rogerson, C. M. (2013). Agriculture-tourism linkages and pro-poor impacts: The accommodation sector of urban coastal KwaZulu-Natal, South Africa. Applied Geography, 36, 49-58.
Razavi, S. H., & Ab Aziz, K. (2017). The dynamics between entrepreneurial orientation, transformational leadership, and intrapreneurial intention in Iranian R&D sector. International Journal of Entrepreneurial Behavior & Research.
Roblek, V., Meško, M., Pušavec, F., & Likar, B. (2021). The role and meaning of the digital transformation as a disruptive innovation on small and medium manufacturing enterprises. Frontiers in Psychology, 12, 592528.
Rönkkö, M., & Evermann, J. (2013). A critical examination of common beliefs about partial least squares path modeling. Organizational Research Methods, 16(3), 425-448.
Rothaermel, F.T. (2020). Strategic Management: Concepts. New York, NY: McGraw-Hill.
Pratono, A. H., Ratih, R. V. S., & Arshad, D. (2018). Does entrepreneurial autonomy foster SME growth under technological turbulence? The empirical evidence from Indonesia. Journal of Technology in Behavioral Science, 3, 170-178.
Purch. (2020). "The Benefits of Digital Technology in Business: Streamlining Processes, Reducing Costs, and Improving Customer Service." Business News Daily. Retrieved on 16 Mar. 2020, http://www.businessnewsdaily.com/10264-digital-technology-benefits.html.
Robinson, F. (2005). Results of a Survey of Performance Deviations on Major Industrial Construction Projects in Alberta (1990-2003).” Report to Construction Owner Association of Alberta, Spring.
Seow, A. N., Choong, Y.O & Ramayah, T. (2020). Small and medium-size enterprises’ business performance in tourism industry: the mediating role of innovative practice and moderating role of government support, Asian Journal of Technology Innovation, https://sci-hub.mksa.top/10.1080/19761597.2020.1798796
Sharma, G.D., Thomas, A. & Paul, J. (2021). Reviving tourism industry post-COVID-19: A resilience-based framework, Tourism Management Perspectives, 37, 100786
Shahzad, A., Chin, H. K., Altaf, M., & Bajwa, F. A. (2020). Malaysian SME's performance and the use of e-commerce: A multi-group analysis of click-and-mortar and pure-play e-retailers. Pakistan Journal of Commerce and Social Sciences (PJCSS), 14(1), 1-33.
Smith, S. (2021). Digital Competency: Understanding the Skills, Knowledge and Attitudes Required for a Digital World. Online Journal of Digital Literacy and Technology, 1(1), 1-7.
World Tourism Organization, UNWTO. (2020). Impact of COVID-19 on International Tourism. Retrieved from https://www.unwto.org/covid19/impact-of-covid-19-on-international-tourism
Winarsih, M. I. & Fuad, K. (2021). Impact of Covid-19 on Digital Transformation and Sustainability in Small and Medium Enterprises (SMEs): A Conceptual Framework, Conference in Complex, Intelligent and Software Intensive Systems (CISIS 2020), 471-476 https://doi.org/10.1007/978-3-030-50454-0_48
Wright, P. M., Dunfort, B.B. & Snell, S. A. (2001). Human resources and the resource based view of the firm. Journal of Management, 27(6), 701–721. http://doi.org/10.1177/014920630102700607
Yeh, S.S. (2021). Tourism recovery strategy against COVID-19 pandemic, Tourism Recreation Research, 46 (2), pp. 188-194, DOI: 10.1080/02508281.2020.1805933
Downloads
Published
License
Copyright (c) 2025 The Journal of Management Theory and Practice (JMTP)
This work is licensed under a Creative Commons Attribution 4.0 International License.
