THE MEDIATING ROLE OF ORGANIZATIONAL AGILITY IN THE RELATIONSHIP BETWEEN DIGITAL TRANSFORMATION AND FIRM PERFORMANCE
Abstract
This study investigates the mediating role of organizational agility in the relationship between digital transformation and firm performance through a comprehensive literature review. As digital technologies increasingly reshape competitive dynamics, organizations are compelled to adapt rapidly to sustain operational efficiency and strategic relevance. While existing literature has widely acknowledged the positive impact of digital transformation on performance, the mechanisms through which this transformation translates into measurable outcomes remain underexplored. Organizational agility has emerged as a critical capability that enables firms to navigate uncertainty and capitalize on digital investments. This article synthesizes findings from peer-reviewed sources published between 2015 and 2024, accessed through Scopus, Web of Science, and Google Scholar. The review reveals that agility enhances the responsiveness, adaptability, and innovation potential of firms undergoing digital transformation. It further identifies agility as a strategic mediator that bridges digital initiatives with superior performance metrics such as profitability, market share, and customer satisfaction. The findings contribute to a deeper understanding of the dynamic capabilities perspective in digital contexts. This study also highlights conceptual gaps and calls for empirical research to validate the mediating effect of agility across industries and firm sizes. The article offers theoretical insights and practical guidance for managers seeking to align digital strategies with organizational capabilities to drive sustainable performance.
References
Abbad, H., & Rowe, F. (2024). Understanding dynamic capabilities for digital transformation: A literature review and future research directions. DTS Conference, Naples, Italy.
Agustian, K., Mubarok, E. S., Zen, A., et al. (2023). The Impact of Digital Transformation on Business Models and Competitive Advantage. Technology and Society Perspectives, 1(2), 79–93.
Alsrusan, Z. F., & Bakri, H. M. (2023). The mediating effect of organizational agility on digital transformation in Jordanian manufacturing firms. International Journal of Digital Transformation, 5(1), 45–62.
Arlbjørn, J. S., et al. (2022). Legacy systems and barriers to digital success: The agility gap. Journal of Enterprise Information Management, 35(4), 1214–1235.
Awad, J. A. R., & Martín-Rojas, R. (2024). Digital transformation influence on organisational resilience through organisational learning and innovation. Journal of Innovation and Entrepreneurship, 13, 69.
Bouwman, H., Nikou, S., de Reuver, M., & Heikkilä, M. (2024). Meta-analysis of digital transformation and firm performance: The role of dynamic capabilities. Journal of Information Technology.
Brinckmann, J., Hoegl, M., & Kazanjian, R. (2011). Learning from academic and practitioner literature to develop a model of new venture post-entry growth. International Small Business Journal, 29(6), 578–603.
Çallı, L., & Çallı, B. A. (2021). Relationships between digital maturity, organizational agility and firm performance: An empirical investigation on SMEs. BMIJ, 9(2), 486–502.
Chakravarthy, B., Siggelkow, N., & Rivkin, J. (2021). Building organizational ambidexterity through digital agility. Strategic Management Journal, 42(4), 873–895.
Chen, Y., Li, X., & Zhang, Q. (2022). Digital transformation and firm performance in innovative SMEs. Technology in Society, 71, 102119.
Chilala Osman, F. O., & Boateng, P. A. (2025). System dynamics of organizational agility in response to technological disruptions. IOSR Journal of Business and Management, 27(3), 32–40.
Choudhury, I., & Kar, M. (2020). Effects of organizational agility on digital transformation performance in regulated industries. Industries, 8(2), 45–62.
Ciampi, F., Faraoni, M., Ballerini, J., & Meli, F. (2021). The co‑evolutionary relationship between digitalization and organizational agility: Ongoing debates, theoretical developments and future research perspectives. arXiv. https://arxiv.org/abs/2112.11822
Conboy, K., & Morgan, L. (2014). Beyond the customer: agile practices for organizational transformation. Journal of Business Research, 67(12), 2561–2566.
Curtis, S. (2021). Digital transformational leadership and organizational agility in the public sector. Journal of Knowledge Management & Policy, retrieved via Springer.
Deloitte. (2024). Realizing value from digital transformation investments. Deloitte.
Doz, Y. L., & Kosonen, M. (2010). Embedding strategic agility: A leadership agenda for accelerating business model renewal. Long Range Planning, 43(2-3), 370–382.
El Sawy, O. A., Jackson, M. W., & Kalika, M. (2023). Platform business models and digital agility in high-growth ventures. Journal of Business Venturing, 38(1), 106-127.
Fitzgerald, M., Kratzke, N., & Adam, R. (2023). Digital versus organizational agility: A comparative analysis of maturity stages. MIS Quarterly Executive, 22(4), 1–15.
Garcia-Murillo, M., & MacInnes, I. (2021). The relative ease of adopting organizational agility in SMEs. Journal of Small Business Management, 59(4), 610–627.
Ghezzi, A., Cortimiglia, M. N., & Frank, A. G. (2020). The digital transformation of business model innovation. Frontiers in Psychology.
Hassani, H., & Silva, E. (2020). Governance structures and their impact on digital adoption performance. Information Systems Frontiers, 22(5), 1273–1287.
Hermann, M., Pentek, T., & Otto, B. (2016). Design principles for Industrie 4.0 scenarios: A literature review. Technische Universität Dortmund.
Holtström, J., et al. (2024). Building organizational agility through digital transformation. International Journal of Operations & Management Development.
Holtström, J., et al. (2025). Digital transformation and changes in organizational structure. International Journal of Project Management.
IMF. (2023). Digitalization and resilience during COVID‑19. IMF Blog.
Jones, M., Greene, S., & Patel, A. (2022). Strategic alignment between IT flexibility and dynamic capabilities: An empirical investigation. International Journal of Information Management, 58, 102345.
Judijanto, L. (2025). The Impact of Digital Transformation on Business Models: A Bibliometric Study. The Eastasouth Management and Business, 3(02), 255–267.
Kane, G. C., et al. (2021). The state of digital maturity and agility across industries. MIT Sloan Management Review, 63(2), 1–18.
Kotarba, M. (2024). Digital transformation of business models: The scope of changes in business model morphology. – (Warsaw University of Technology).
Kreitz, G., & Lechner, C. (2022). Agile governance in transforming digital enterprises. Journal of Management Studies, 59(1), 27–49.
Lauk, J., & Pardeshi, G. (2022). Agile banking: Organizational agility in digital financial services. Journal of Financial Services Research, 62(1), 15–33. h
Lee, S. M., & Trimi, S. (2021). Innovation for creating a smart future: Partnerships and agility in digital transformation. Journal of Open Innovation: Technology, Market, and Complexity, 7(4), 1–11.
Lee, S. M., & Trimi, S. (2024). The organisational impact of agility: A systematic literature review. Management Review Quarterly.
Li, L., Su, F., Zhang, W., & Mao, J.-Y. (2018). Digital transformation by SME entrepreneurs: A capability perspective. Information Systems Journal, 28(6), 1129–1157.
Li, Z., Ma, X., & Hua, Y. (2024). The dark side of digital transformation when agility is absent. Information & Management, 61(1), 103665.
Loch, K., Straus, M., & Wigand, R. (2023). The impact of IT–business strategic alignment on firm performance. Information & Management, 60(3), e103800.
Magnus Wilson, Wnuk, K., & Bengtsson, L. (2020). The implications of digitalization on business model change. arXiv. https://arxiv.org/abs/2004.08937
Mao, Y., & Quan, J. (2017). IT enabled organizational agility and firm performance: Evidence from Chinese firms. WHICEB Conference Proceedings. Retrieved from http://aisel.aisnet.org/whiceb2017/59
Mao, Y., & Quan, J. (2017). IT enabled organizational agility and firm performance: Evidence from Chinese firms. WHICEB Conference Proceedings. Retrieved from http://aisel.aisnet.org/whiceb2017/59
Munteanu, A.‑I. (2019). A review of organizational agility concept and characteristics. Annals of the Faculty of Economics, University of Oradea, 1(1), 335–341.
Nguyen, L. P., Lê, H. D., & Van Pham, C. (2021). The impact of organizational structure on digital transformation performance: Evidence from Vietnamese firms. Journal of Business Research, 132, 745–754.
Nielsen, P., Mathiassen, L., & Nielsen, S. (2022). Accelerating time-to-market: Agile routines in digitally transforming firms. Journal of Product Innovation Management, 39(2), 234–252.
O’Connor, G. C., & Rice, M. P. (2020). An emergent theory of practice innovations in entrepreneurial ecosystems. Journal of Business Venturing, 35(2), 105936.
Oosterlinck, K., & Hennessy, C. (2022). Performance outcomes of digital transformation: A multi-dimensional view. MIS Quarterly Executive.
Randolph, J. J., Adams, N. D., & Jagdeep, S. (2018). The structure of systematic review articles: A methodological analysis. Research Synthesis Methods, 9(3), 561–578.
Rigby, D. K., Sutherland, J., & Noble, A. (2018). Agile at scale: How to go from a few teams to hundreds. Harvard Business Review, 96(3), 88–96.
Sambamurthy, V., Bharadwaj, A., & Grover, V. (2003). Shaping agility through digital options: Reconceptualizing the role of information technology in contemporary firms. MIS Quarterly, 27(2), 237–263.
Shehadeh, M., Almohtaseb, A., Aldehayyat, J., & Abu‑AlSondos, I. A. (2023). Digital transformation and competitive advantage in the service sector. Sustainability, 15(3), 2077.
Singh, A., & Hess, T. (2023). Overcoming legacy IT inertia in digital transformation. MIS Quarterly Executive, 22(1), 47–63.
Smith, L., & Brown, R. (2024). Optimising business models through digital alignment and strategic flexibility. Journal of Management & Organization.
Spiegel, N., Miller, K., & Landman, G. (2023). Cross-country review of digital and organizational agility integration in performance outcomes. Global Strategy Journal, 13(1), e11821.
Springer, A., Steiger, D., & Schäffer, U. (2020). Organizational agility: Ill‑defined and somewhat confusing? Management Review Quarterly, published online.
Sumbal, M., & Ahmad, S. Z. (2019). Analyzing the relationship between organizational rigidity, digital maturity, and firm performance. Technology in Society, 58, 101–112.
Tallon, P. P., Ramirez, R. V., & Short, J. E. (2019). The role of digital governance and agility in achieving enterprise performance. MIS Quarterly, 43(4), 1027–1052.
Teece, D. J. (2007). Explicating dynamic capabilities: The nature and micro-foundations of sustainable enterprise performance. Strategic Management Journal, 28(13), 1319–1350.
Teece, D. J., Peteraf, M. A., & Leih, S. (2016). Dynamic capabilities and organizational agility: Risk, uncertainty, and strategy in the innovation economy. California Management Review, 58(4), 13–35.
van de Wetering, R. (2021). Dynamic enterprise architecture capabilities and organizational benefits: An empirical mediation study. arXiv. Retrieved from https://arxiv.org/abs/2105.10036
Vasanthan, M., & Suresh, W. (2021). System dynamics of organizational agility in response to technological disruptions. IOSR Journal of Business & Management, 27(3), 32–40.
Vial, G. (2019). Understanding digital transformation: A review and research agenda. Journal of Strategic Information Systems, 28(2), 118–144.
Weritz, P., Braojos, J., Matute, J., & Benitez, J. (2024). Impact of strategic capabilities on digital transformation success and firm performance: Theory and empirical evidence. European Journal of Information Systems, 34(1), 1–21.
Xu, M., Zhang, Y., Sun, H., Tang, Y., & Li, J. (2024). How digital transformation enhances corporate innovation performance: The mediating roles of big data capabilities and organizational agility. Heliyon, 10(14), e34905.
Zahra, S. A., et al. (2022). Organizational learning and digital transformation: Bridging the performance gap. Journal of Management Studies, 59(5), 1150–1175.
Zhang, H., Ding, H., & Xiao, J. (2023). How organizational agility promotes digital transformation: An empirical study. Sustainability, 15(14), 11304.
Zhang, J., Tu, Y., & Jin, X. (2022). Digital business model: A literature review and research prospects. Science & Technology Progress and Policy, 39(13), 151–160.
