The Effect of transformational Leadership on organizational effectiveness: The mediating Role of digital transformation at Sunshine construction Plc Head office
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Date
2025-09
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Addis Ababa University
Abstract
This study investigates the link between transformational leadership, digital transformation and how efficient Sunshine Construction Head Office is. The approach treats transformational leadership as the predictor, digital transformation as the linking variable and how well the organization functions as something dependent on these other factors. The study applies Bass’s Transformational Leadership Theory, Vial’s Digital Transformation Theory and Burns’s Relational Leadership Theory. Four important elements are used to analyze transformational leadership: idealized influence, inspirational motivation, intellectual stimulation and individualized consideration. To review digital transformation, leaders should check digital tool use, staff ability and how well tasks are joined in the process.This research chose to apply a quantitative explanatory research design. As there were so few students, each student completed a census survey that provided 93 valid results out of 105 questionnaires. Data related to the project were obtained from questionnaires and relevant books and articles were used for secondary information. Primary data were analyzed using SPSS Version 27 for descriptive statistics, reliability analysis, and Inferential statistics. Structural Equation Modeling (SEM) was performed with Jamovi Version 2.6.26 to test the measurement model and structural relationships, examining both direct and indirect SEM analysis discovered that using intellectual stimulation greatly improves an organization’s efficiency. While inspirational motivation made a small difference, idealized influence and individualized consideration did not appear to have a large direct effect. Still, having appealing and encouraging leaders influenced their employees mainly through digital transformation, by bettering digital ability and making work processes more efficient. Even though individualized consideration didn’t much influence results, it benefits the growth and retention of staff members.These findings highlight the importance of focusing on intellectual stimulation and digital capability development as key strategies for improving organizational performance in the construction industry.
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Transformational Leadership, Digital Transformation, Organizational Efficiency, Structural Equation Modeling, Construction Industry