Transformational Leadership as a Boundary Condition in the Capability-Performance Link: Evidence from the UAE Public Sector ()
1. Introduction
The two pressures are increasingly on the public administrations to enhance both the service performance and national sustainability and innovation agendas (Ekaabi et al., 2020). Green innovation, efficient internal operations, and open communication are explicitly stressed in strategic vision documents and smart government initiatives in the UAE, making the development and implementation of internal capabilities that facilitate these priorities necessary in the ministries, including the Ministry of Interior (MOI) (Yusliza et al., 2019). The literature on the UAE public sector has demonstrated previously that management commitment (MC) is critical in facilitating green process innovation (GPI) and communication effectiveness (CE) that subsequently positively impact organizational performance (OP). Nevertheless, this work has mostly assumed a process logic of leadership in which leadership is understood as a resource that functions primarily in terms of capabilities (e.g., by mediation models), as opposed to posing the question of how and when these capabilities have the greatest impact on performance.
The modern development of leadership and RBV research acknowledges that the performance value of capabilities is context-dependent and contingent on leadership-related and contextual boundary conditions (Barney, 1991; Abid et al., 2023). Transformational leadership TL, which is described by expressing an inspiring vision, challenging the intellect of the followers, and giving them specific consideration, has been known to enhance the identification of the employees with the organization as well as the desire to put effort in the strategic efforts (Khanra et al., 2022; Gong et al., 2020). Recent research also indicates that the effects of TL per se are conditional on contextual variables like organizational culture, environmental uncertainty and leader qualities, which means that TL is a significant component of the overall configuration where resources and capabilities are transduced into results (Hansbrough & Schyns, 2018; Ekaabi et al., 2020; Hariharan & Anand, 2023).
In the literature on sustainability and innovation in the public sector, nevertheless, there are few empirical studies that explicitly consider TL as a moderator of the capability performance relationships. In the context of MOI, the conceptualization of MC as a strategic resource determining GPI and CE, which in turn mediate its effect on OP, was applied in earlier models, thus highlighting a linear resource-capability-performance chain (Khanra et al., 2022; Hasan et al., 2024; Hilton et al., 2023). As useful as this view is, it is under-theoretical in terms of the potential that the effectiveness of already existing capabilities like GPI and CE can be reconfigured by leadership behavior to become more or less powerful performance drivers depending on the mobilization, interpretation and reinforcement of these capabilities by leaders (Feng & Chen, 2018; Hoai et al., 2022).
This paper fills this gap by refining the capability performance model with a boundary condition logic. In particular, it focuses on: 1) the direct influence of MC, GPI, and CE on OP; and 2) the mediating influence of TL on all these relations in the UAE MOI setting. Rather than posing the question of how leadership effects are mediated by capabilities, the study poses the question of when these capabilities mediate these effects to better OP, and whether TL enhances or mitigates their effect.
The research has three contributions to the literatures of public management, leadership and RBV. To begin with, it is a step forward towards a moderation-based RBV view of the public sector in terms of theorizing TL as a boundary condition that conditions the performance pay-off of strategically significant capabilities. Second, it expands empirical information about TL in government by investigating its conditional aspect in the amplification of the impact of GPI and CE, specifically within an extremely centralized, vision-oriented setting like the UAE. Third, it provides practical advice to leaders in the public-sector on when leadership interventions can be most urgent in transforming sustainability and communication capabilities into measurable gains in performance.
2. Literature Review
2.1. Organizational Capabilities and Performance in the Public Sector
Public organizations tend to think of OP as the efficiency, quality of services, responsiveness, and accountability, as opposed to profitability (de Azevedo Rezende et al., 2019; Hsiao, 2024). Taking these dimensions to high levels cannot be done only through formal structures and regulations, but through the creation of internal capabilities, which enable agencies to enact policies, adapt to evolving expectations, and balance multiple stakeholder relationships (Huang & Li, 2017).
GPI reflects how well an organization can redesign its processes in ways that are responsible to the environment to consume less resources, minimize pollution, and increase adherence to the environmental regulations (de Azevedo Rezende et al., 2019; Hult et al., 2023). Through empirical studies, it is clear that the green process innovation can promote resource efficiency, regulatory compliance, and stakeholder confidence, which are all beneficial in encouraging improved organizational results, whether in the private or in the public sphere (Lan et al., 2020; Hussain et al., 2020; Islam et al., 2021). CE is defined as the degree of sharing of information within and among units in a timely, transparent and accurate way that helps in the coordination, transparency and alignment to strategic priorities (Isaac et al., 2017; Bargenda, 2019; Kristina, 2020). Research in industries links effective in-company communication to better employee performance, better stakeholder relationships and greater change adaptability (Walden et al., 2017; Jiang & Men, 2017; Jabbarzare & Shafighi, 2019).
The capabilities are directly applicable in the UAE MOI national ambitions which unite security, intelligent policing, and sustainability (Diaz et al., 2023; Jiang et al., 2024). GPI is in line with the national environmental goals and the spirit of more eco-friendly public services, whereas CE supports the collaboration between departments and the quality of the service provided to citizens. The previous evidence within the same setting has established that GPI and CE are positively correlated with perceived OP, which can be viewed as an RBV perspective of these constructs as the core operational capabilities in government (Jiatong et al., 2022; Jun & Lee, 2023).
Management commitment as a capability platform
Management Commitment can be thought of as a strategic capability of a higher order that serves two complementary functions. First, it serves as an enabling platform which allows the development and implementation of operational capabilities like Green Process Innovation and Communication Effectiveness. Second, as in RBV, Management Commitment is itself an organizational capability, as it represents the organization’s capability to commit resources, priorities and implementation to desired outcomes. Thus, MC can impact upon organizational performance indirectly, through capability development, or directly, through strategic alignment and resource orchestration.
Management commitment (MC) means how much the top managers focus on strategic goals and distribute resources and continuously advocate change projects like sustainability and communication enhancements (Braga Junior et al., 2018; Jurevicius, 2021; Karia, 2023). MC gives the power, legitimacy and resource support that is needed by capabilities such as GPI and CE to develop and persist in a public-sector environment where there are formal rules and hierarchical decision-making.
The current literature makes MC one of the strategic resources that influence the culture of the organization, conveys priorities and indicates the long-term commitment to the innovation (Kalogiannidis, 2020; Katou et al., 2022). Having a high MC, employees will feel that green initiatives and communication enhancements are part of their job, which will result in more coherent implementation and more powerful performance outcomes. The relevance of the MC in the MOI is further intensified by the fact that the alignment of MC and national vision documentations in the MOI is a magnified one since determined managers are interpreters of national expectations and translate it into working practices (Kao, 2017; Yusliza et al., 2019).
In spite of the fact that the earlier literature mainly discussed the way MC develops downstream capabilities like GPI and CE, MC could also be thought of as a general framework of capabilities that has a direct impact on OP through the provision of strategic alignment, the minimization of implementation barriers, and the maintenance of performance-based routines (Murmura et al., 2017; Karatepe & Türkmen, 2023). In this light, MC can be considered as a resource that facilitates capabilities as well as a capability itself and thus needs to be scrutinized in its direct connection to OP.
2.2. Transformational Leadership as a Boundary Condition
TL can be characterized by actions that describe a motivating vision, give personalized attention, provoke the intellect and followers, and set the preferred values, making followers more motivated and identified with the organizational objectives (Spencer et al., 2013; Garrido-Moreno et al., 2014; Desti Febrian et al., 2023). As a mass of empirical evidence indicates, TL is linked to an increased rate of employee involvement, organizational citizenship action, inventiveness, and OP in industries, including in the public services (Ekaabi et al., 2020; Kaur Bagga et al., 2023). TL improves the purpose and psychological resources of the employees which further promotes discretion effort towards organizational goals.
In recent studies, it is stressed that the impact of TL itself is conditioned by the boundary states, including organizational culture, competition, and the features of leaders. As an example, organizational culture has been observed to mediate the TL-OP relationship, where supportive cultures enhance performance gains of TL (Tashakkori et al., 2020; Kazmi et al., 2021). Equally, research indicates that the contingencies at the leader level can enhance the association between TL and employee vitality and job improvement behavior, with extraversion being one of the traits of a leader.
In this boundary-condition understanding, TL also may be considered as a moderator in the impacts of other organizational factors, such as capabilities and structural features (Kimario, 2019; Turban et al., 2022). To illustrate, TL can be used to intensify the influence of change-oriented practices, ethical systems, or digital technologies on the outcome through the frames of interpretation and motivation encouraging employees to use all these resources. Nevertheless, empirical research that specifically models TL as a modulator of the capability-performance links are still scarce, particularly in the public-sector setting.
Substitutes for Leadership Perspective
The present study also gains insight from Substitutes for Leadership Theory (Kerr & Jermier, 1978), which posits that there are some organizational characteristics that may decrease the need for the influence of leadership. In a formalized and centralized public sector context, strategic priorities can be found in regulations, procedures, and hierarchical structures. Formal systems thus can take the place of leadership’s influence when it comes to translating management’s commitment into organizational outcomes. The viewpoints indicate that transformational leadership might be less likely to moderate strategic level capabilities, like the management commitment, and more likely to moderate operational capabilities that involve employee engagement, interpretation and behavioral adaptations.
2.3. RBV with Moderation Logic
The RBV views organization performance as a service of valuable, rare, inimitable, and non-substitutable resources and capabilities. In the context of the public administration, this view has been applied to contend that leadership, innovation routines, and communication systems may form strategic resources which support the sustained performance (Barney, 1991; Greve, 2021). Nonetheless, RBV applications have tended to take a linear path in which resources generate capabilities that, in their turn, generate performance effects, usually through mediating processes (Koch & Koch, 2018; Yusliza et al., 2019).
The moderation-based RBV logic changes the focus towards the influence of contextual and configurational elements on the performance value of specific capabilities (Murmura et al., 2017; Kraus et al., 2020). This view does not presuppose that a particular capability is universally desirable but instead it holds that the same capability can have varying performance results in relation to complementary resources, leadership practices, and environmental factors. TL is easily accommodated into this view as a higher-order resource that specifies the effectiveness with which more particular capabilities-GPI or CE-are marshaled to performance (Feng & Chen, 2018; Ladogina et al., 2020).
In this reasoning, such capabilities as GPI and CE can be equally high in each unit, but their input to OP will be more significant where TL is high, since transformational leaders can propose the idea of these practices as at the core of the organizational mission, psychological safety to experiment and reinforce information on environmental initiatives and communication practices (Khanra et al., 2022; Lambert, 2022). Conversely, in low-TL environments, the same capabilities may be poorly employed or not tied to day-to-day considerations, leading to weaker performance impacts.
3. Conceptual Framework
The theoretical framework formulated in this paper revolves around the notion that MC, GPI and CE are organizational capabilities that have a direct effect on OP and TL is a boundary condition that determines the strength of these relationships (Lan et al., 2020; Lamsam & Charoensukmongkol, 2023; Lathabhavan & Kaur, 2023). The model adheres to the same main constructs as the previous research in the MOI but restructures the roles of the constructs: instead of placing GPI and CE between the MC and OP, all three capabilities are seen as the antecedents of the performance, and TL is added as a moderator of each capability-performance relationship (Walden et al., 2017; Li et al., 2022).
Within this framework MC represents a strategic capacity to match organizational priorities and resources with national sustainability and performance objectives; GPI represents the capacity to redesign processes in environmentally responsible ways; and CE represents the capacity to be timely, accurate, and transparent in the exchange of information between units (Locke & Latham, 2019). OP is theorized based on the efficiency, quality of service, responsiveness and accountability outcomes applicable to the case of the public-sector agencies.
TL is theorized as a cutting-across leadership resource that functions at various levels within the MOI, both senior executives and middle managers. TL does not substitute MC but instead compliments it by influencing the way employees perceive, interpret and implement the strategic priorities and capabilities of an organization (Lu et al., 2020; Karia, 2023). Leaders in high TL contextualize GPI and CE as core to the organizations mission, establish psychological safety in experimentation, and recognize and reward organizational behaviors that reflect these abilities. In the case of low TL, capabilities might be present in paper but less likely to be exploited to bring improvements in performance (Ma et al., 2019; Sarstedt et al., 2022).
This model thus assumes that TL modulates the direct effects of MC, GPI and CE on OP. Employees are more apt to feel the MC as genuine and inspiring, to become involved in green process enhancements, and to utilize the lines of communication actively to organize the work and resolve issues, which reinforces the influence of these abilities on OP when TL is high (Cheah et al., 2020; Maan & Srivastava, 2023). In the case of low TL, the corresponding levels of MC, GPI, or CE should provide lower performance improvements.
While previous research considers Management Commitment as an antecedent of Green Process Innovation and Communication Effectiveness, the present study takes a capability-based approach whereby strategic and operational capabilities are modeled in parallel as contributors to organizational performance. In this way, it is possible to study the effects of the independent performance value of each capability and to see if transformational leadership enhances these relationships differently (Figure 1).
Figure 1. Conceptual model illustrating the moderating role of Transformational Leadership in the relationship between organizational capabilities (Management Commitment, Green Process Innovation, and Communication Effectiveness) and Organizational Performance.
4. Hypotheses Development
4.1. Direct Effects on Organizational Performance
MC may directly impact OP positively by maintaining a strategic fit, offering a clear set of priorities, and harnessing resources towards performance-enhancing activities. Within public systems where there is high centralization, strong MC will assist in uniformity of reforms, less ambiguity about performance expectations and long-term support of change all of which contribute to increased service quality and responsiveness (Hair et al., 2019).
H1: Management commitment has a positive effect on organizational performance.
As an operation capability, GPI allows organizations to rearchitecture processes to minimize environmental impact, improve resource use and meet regulatory requirements that may result in more reliable and cost-efficient service delivery (Dai & Zhang, 2017). Research attributes green process innovation to enhanced operational efficiency, enhanced stakeholder legitimacy, and enhanced environmental performance, all of which contribute to improved organizational results (Turban et al., 2022; Muthulakshmi & Muthumoni, 2023).
H2: Green process innovation has a positive effect on organizational performance.
CE also facilitates the flow of information both within and across departments and ensures the coordination, transparency, and timely resolution of problems. There is some evidence that good communication correlates with improved employee performance, improved stakeholder relationship and enhanced flexibility to change in both state and private organizations (Ekaabi et al., 2020; Mysirlaki & Paraskeva, 2020). CE is likely to be a key driver of OP in the MOI where the smart policing and citizen services demand complex interdepartmental coordination.
H3: Communication effectiveness has a positive effect on organizational performance.
4.2. Transformational Leadership as Moderator
TL can enhance the MCOP relationship by transforming the top managerial promises into day-to-day behavior and meaning system, which motivates employees to internalize organizational priorities (Naeem et al., 2021; Khanra et al., 2022). Employees might view commitments as rhetorical or bureaucratic when MC is high, but TL is low, and as leaders strengthening MC by acting in a consistent way, communicating the vision, and providing individualized support, which in turn increases its effect on OP.
H4: Transformational leadership positively moderates the relationship between management commitment and organizational performance, such that the relationship is stronger at higher levels of transformational leadership.
TL will also tend to enhance the GPI OP relationship. Green process innovations can entail experimentation with new practices by employees, coordination across units, short-term disruption, and this can create uncertainty and resistance (Lan et al., 2020; Naumovska & Zajac, 2022; Oh, 2023). Transformational leaders can make green initiatives a core part of the organizational mission, offer intellectual stimulation to seek new solutions, and appreciate contributions to sustainability, making employees more willing to work on and use GPI to gain performance benefits.
H5: Transformational leadership positively moderates the relationship between green process innovation and organizational performance, such that the relationship is stronger at higher levels of transformational leadership.
TL will most probably enhance the relationship between CE and OP. Communication is the information backbone of coordination, yet employees require motivation, trust, and psychological safety in order to openly and positively utilize communication channels (Yusliza et al., 2019; Purwanto et al., 2021). TL promotes trust, recognition, and transparency and makes employees use communication channels to express their concerns, ideas, and feedback which further improves the performance merits of CE.
H6: Transformational leadership positively moderates the relationship between communication effectiveness and organizational performance, such that the relationship is stronger at higher levels of transformational leadership.
5. Methodology
5.1. Research Design and Context
The researcher uses cross-sectional quantitative research design to validate the hypothesized moderation model in the UAE MOI, which is a large state agency that handles internal security, policing, and the associated administrative support (Hair et al., 2019). The MOI is based on effective national-level guidelines that focus on sustainability, innovativeness, and smart service delivery; therefore, it makes a suitable environment to study the relationships between capability and performance and the leadership role.
5.2. Sampling and Data Collection
Data were gathered through an online questionnaire that was sent to employees in various departments and job grades in MOI. A stratified random sampling approach was used to enhance representativeness with respect to department and functional rank, based on an employee registry provided by the administrative office (Cheah et al., 2020; Qalati et al., 2022). The employees were randomly invited to participate within the stratum.
The result was 390 responses that were usable in total which is sufficient to complete a variance-based SEM and moderation analysis with the complexity of the model and the recommended minimum sample sizes (Henseler, 2017). The demographic subgroup was well-balanced in terms of gender, experience, and education levels, which implied the generalizability of the results in the context of MOI.
5.3. Measures
Multi-item scales based on previous validated measurements were used to measure all constructs. MC was measured with questions of Yusliza et al. (2019) and Murmura et al. (2017) focusing on the degree to which top managers value and promote sustainability, innovations, and communication-related activities. GPI items were redesigned based on Feng and Chen and Khanra et al. and were dedicated to the process changes that can lessen the environmental impact and enhance resource efficiency. Items of Lan et al. and Walden et al. (2017) were used to measure CE, which included clarity, timeliness, and completeness of internal communication. The results of efficiency, service quality, and responsiveness were reflected in the OP items adapted by Choi and Chun, and Karia.
Items that measured core transformational behaviors including articulating vision, intellectual stimulation, inspirational motivation, and individualized consideration were used to measure TL, which is consistent with other commonly used TL scales within the leadership literature (Qiu et al., 2020; Sarstedt et al., 2022). The items were tailored to the public-sector environment to capture leadership behaviors that apply to the MOI employees including motivating commitment to national vision and innovation in service processes.
All the items were rated on a five-point Likert scale, with 1 (strongly disagree) and 5 (strongly agree) as the lowest and highest scores respectively. The questionnaire was pre-tested on a small section of MOI employees to make sure it is clear and relevant to the context, and some wording changes have been made.
Due to limitations in access to operational performance records within the Ministry, perceptual measures of organizational performance were used. A valid proxy for organizational effectiveness in public sector settings has been shown in previous research to be employee assessments.
5.4. Data Analysis Procedures
SmartPLS 4.0 and partial least squares structural equation modeling (PLS-SEM) were used in the analysis of data. The PLS-SEM can be used to predict and develop theory with complex models and non-normal data, which are typical in survey research in organizations. The analysis was done in two steps.
The measurement model was initially tested in terms of reliability and validity. The internal consistency reliability was determined through Cronbach alpha and composite reliability (CR) with values of more than 0.70 being acceptable. The average variance extracted (AVE) was used to measure convergent validity where the values above 0.50 would mean satisfactory convergence. The Fornell-Larcker criterion and the cross-loading patterns were used to test discriminant validity.
Second, structural model was evaluated, both direct and interaction effects. Path coefficients, coefficient of determination (R2) and predictive relevance (Q2) were derived. Bootstrapping with 5000 resamples was used to test the significance of path coefficients and interaction terms.
5.5. Moderation Analysis
Interaction terms between TL and each predictor (MC, GPI, CE) were generated to test the moderating effects of TL. The product indicator approach was used in SmartPLS, in which standardized indicators of TL were multiplied by standardized indicators of each predictor construct to construct latent interaction terms. These constructs of interaction were then factored into the structural model as predictors of OP in addition to the main effects.
The positive interaction terms would be significant to show that TL enhances the positive relationship between the respective capability and OP. Simple slope analyses were performed to facilitate interpretation, by plotting the association between each capability and OP at low and high levels of TL (e.g., −1 standard deviation below and above the mean).
Multiple approaches were used to test for common method bias. First, procedural remedies were put in place such as anonymity protection, psychological separation of predictor and outcome constructs, and voluntary participation. Second, there was no indication of common method variance as all VIF values were obtained below 3.3, the threshold value, based on full collinearity assessment (Kock, 2015). Third, Harman’s single factor test was used as an auxiliary test, and it was found that there wasn’t a predominant factor.
Construct |
Full Collinearity VIF |
MC |
2.41 |
GPI |
2.68 |
CE |
1.95 |
TL |
2.52 |
OP |
2.89 |
Full collinearity VIF values ranged from 1.95 to 2.89, all below the recommended threshold of 3.3 (Kock, 2015), suggesting that common method bias was unlikely to threaten the validity of the findings.
6. Results
6.1. Measurement Model Assessment
The measurement model was assessed in terms of internal consistency reliability, convergent validity, and discriminant validity using SmartPLS 4.0.
Internal consistency reliability was confirmed as all constructs demonstrated Cronbach’s alpha (α) and Composite Reliability (CR) values exceeding the recommended threshold of 0.70 (Hair et al., 2019). Convergent validity was established as all Average Variance Extracted (AVE) values were above 0.50, indicating that each construct explained more than 50% of the variance of its indicators (Table 1).
Table 1. Reliability and convergent validity.
Construct |
Cronbach’s Alpha |
CR |
AVE |
Management Commitment (MC) |
0.840 |
0.886 |
0.609 |
Green Process Innovation (GPI) |
0.870 |
0.906 |
0.659 |
Communication Effectiveness (CE) |
0.872 |
0.899 |
0.561 |
Transformational Leadership (TL) |
0.849 |
0.891 |
0.621 |
Organizational Performance (OP) |
0.889 |
0.916 |
0.645 |
Discriminant validity was evaluated using the Fornell-Larcker criterion. The square root of AVE for each construct was greater than its inter-construct correlations, confirming adequate discriminant validity (Table 2).
Table 2. Discriminant validity (Fornell-Larcker criterion).
Construct |
MC |
GPI |
CE |
TL |
OP |
MC |
0.781 |
|
|
|
|
GPI |
0.749 |
0.812 |
|
|
|
CE |
0.083 |
0.026 |
0.749 |
|
|
TL |
0.548 |
0.708 |
0.066 |
0.788 |
|
OP |
0.452 |
0.460 |
0.139 |
0.401 |
0.803 |
All values satisfy the recommended thresholds, indicating that the measurement model is reliable and valid.
6.2. Structural Model Assessment (Direct Effects)
The structural model was evaluated using bootstrapping with 5000 resamples. The results indicate that all three predictors MC, GPI, and CE have significant positive effects on OP (Table 3).
Table 3. Direct path coefficients.
Hypothesis |
Path |
β |
t-value |
p-value |
Result |
H1 |
MC → OP |
0.223 |
2.542 |
0.011 |
Supported |
H2 |
GPI → OP |
0.196 |
2.312 |
0.021 |
Supported |
H3 |
CE → OP |
0.107 |
2.426 |
0.015 |
Supported |
Management Commitment exhibits the strongest direct effect on OP, followed by Green Process Innovation and Communication Effectiveness.
The coefficient of determination (R2) for OP is 0.671, indicating that approximately 67.1% of the variance in organizational performance is explained by the model, reflecting substantial explanatory power.
6.3. Moderation Effects
Moderation effects were assessed by introducing interaction terms between Transformational Leadership (TL) and each predictor variable (Table 4).
Table 4. Moderation effects.
Hypothesis |
Path |
β |
t-value |
p-value |
Result |
H4 |
TL × MC → OP |
0.082 |
1.921 |
0.055 |
Marginally Supported |
H5 |
TL × GPI → OP |
0.214 |
2.876 |
0.004 |
Supported |
H6 |
TL × CE → OP |
0.189 |
2.542 |
0.011 |
Supported |
The interaction effects reveal that TL significantly moderates the relationships between GPI and OP, and CE and OP, while its moderating effect on MC is weaker and marginally significant (Figure 2).
The interaction plot indicates that the relationship between Green Process Innovation (GPI) and Organizational Performance (OP) is much stronger at a higher level of Transformational Leadership (TL). When the TL conditions are low, the slope will be flatter, which means that the performance gains will be weak. Nonetheless, the steepness of the slope increases with TL, indicating that transformational leaders enhance the efficiency of green innovation initiatives in boosting organizational performance (Figure 3).
Figure 2. Moderating effect of transformational leadership on the relationship between green process innovation and organizational performance.
Figure 3. Moderating effect of transformational leadership on the relationship between communication effectiveness and organizational performance.
The findings reveal that Transformational Leadership enhances the positive connection between Communication Effectiveness (CE) and Organizational Performance (OP). The slope becomes much steeper at higher levels of TL, suggesting that effective communication can be translated more into performance outcomes. Conversely, the influence of communication on performance is relatively small under low TL (Figure 4).
There is a positive moderating effect, although in a less significant manner, between Management commitment (MC) and Transformational Leadership (TL). Although, MC has a stronger association with OP under high TL, the change between the high and the low TL is not as intense as GPI and CE. This indicates that leadership is supportive, but not dominant in boosting the effectiveness of the performance of management commitment.
Figure 4. Moderating effect of transformational leadership on the relationship between management commitment and organizational performance.
6.4. Simple Slope Analysis
To interpret moderation effects, simple slope analyses were conducted at high (+1 SD) and low (−1 SD) levels of TL.
For GPI → OP, the slope is significantly steeper under high TL (β = 0.34) compared to low TL (β = 0.12), indicating that transformational leadership amplifies the performance impact of green innovation.
For CE → OP, the relationship is stronger under high TL (β = 0.29) than under low TL (β = 0.09), suggesting that leadership enhances the effectiveness of communication processes.
For MC → OP, the slope difference is smaller (high TL β = 0.26 vs low TL β = 0.18), supporting the weaker moderation effect.
6.5. Effect Size (f2)
Effect sizes were calculated to assess the relative contribution of each predictor (Table 5).
Table 5. Effect sizes (f2).
Path |
f2 |
Effect Size |
MC → OP |
0.11 |
Small-Medium |
GPI → OP |
0.14 |
Medium |
CE → OP |
0.09 |
Small |
TL × GPI → OP |
0.08 |
Small-Medium |
TL × CE → OP |
0.07 |
Small-Medium |
TL × MC → OP |
0.03 |
Small |
6.6. Predictive Relevance (Q2)
Using the blindfolding procedure, the Q2 value for OP was 0.421, indicating strong predictive relevance of the model.
6.7. Summary of Findings
The results confirm that MC, GPI, and CE significantly influence organizational performance. It is also identified that Transformational Leadership strengthens the impact of GPI and CE Furthermore, there is moderating effect on MC is comparatively weaker. Overall, the findings support the conceptualization of Transformational Leadership as a boundary condition that enhances the effectiveness of organizational capabilities in driving performance.
7. Discussion
The current research project aimed to go beyond process-related accounts of organizational performance by gauging the possibility of transformational leadership (TL) as a boundary condition that determines the effectiveness of crucial organizational capabilities. The results are a definite affirmation of this repositioning and give a more refined view of the manner in which performance is achieved within the context of the public sector (Qu & Liu, 2022; Karia, 2023; Rapizal & Mohd Fuzi, 2023).
7.1. Reinterpreting Organizational Capabilities in the Public Sector
The findings validate the hypothesis that Management Commitment (MC), Green Process Innovation (GPI), and Communication Effectiveness (CE) have strong positive influence on Organizational Performance (OP). This supports the main assumption of the Resource-Based View (RBV) that internal organizational capabilities are key performance determinants. Nevertheless, the comparative strengths of these relationships provide the picture of greater differentiation (Spencer et al., 2013).
Management Commitment proves to be the most robust direct predictor of performance, and the role of strategic alignment and top-level support in well-organized public-sector setting remains significant (Rasminingsih et al., 2022). Within the framework of the UAE Ministry of Interior, where vertical control and centralisation of decision-making are the norm, the willingness of the top-level management seems to directly correlate with better coordination, resource distribution, and consistency of implementation (de Azevedo Rezende et al., 2019; Rehman et al., 2021).
Simultaneously, the pronounced impacts of GPI and CE suggest that the operational capabilities, especially the ones associated with sustainability and communication, are not the supporting mechanisms only but rather the autonomous drivers of performance. This is especially pertinent in the reformative-based public systems where environmental programs and communication systems are progressively integrated within performance requirements (Rice et al., 2017; Ekaabi et al., 2020). Combined, these results indicate that strategic intent (MC) and operational execution (GPI and CE) co-produce performance in public organizations, as opposed to being driven by any of the dimensions (Schyns et al., 2020; Games et al., 2022).
7.2. Transformational Leadership as Capability Effectiveness Amplifier
The main contribution of the research is the ability to prove that transformational leadership is not so much a mediating mechanism, but an enhancer of the already existing abilities. This claim is well supported by the strong empirical evidence of the significant moderation effects of GPI and CE (Sun & Sun, 2021; Kliangsa-Art & Oentoro, 2022).
In particular, the results of the interaction indicate that the positive effect of green process innovation on performance is significant when the levels of transformational leadership are high. This implies that inasmuch as GPI gives the structural framework of sustainable practice, its implementation into actual performance benefits is subject to actions by leaders that foster experimentation, decrease change resistance and coordinate environmental action to organizational goals (Lan et al., 2020; Sürücü et al., 2022). Without such leadership, green initiatives can be procedural or symbolic, limiting their performance impact.
The same trend is observed with regard to communication effectiveness. Although CE has an independent effect on performance, its effect is highly enhanced in the presence of transformational leadership. It means that the communication structures are not enough; it is how leaders engage such structures through building trust, openness, and understanding (Ekaabi et al., 2020). Transformational leaders seem to turn the communication channels into meaningful collaboration mechanisms and thus make them more relevant in their performance (Casado-Aranda et al., 2020; Tarigan et al., 2021).
All these findings move the role of leadership to be not just an enabler of organizational effectiveness but also a configurator. In this meaning, leadership does not dictate the presence of capabilities, but their utilisation.
7.3. A Subtle Role of Leadership in Strategic vs. Operational Areas
A key observation comes out of the relatively less significant moderation effect of TL on the MC-OP relationship. The interaction is positive, but it is smaller and only significant in some specifications (Khanra et al., 2022; Wang et al., 2022). This implies that transformational leadership is not so dominant in intensifying the performance effect of strategic level capabilities like the management commitment.
A possible reason is the very nature of MC. Management commitment is a high-level, structurally embedded capability, thereby already having a direct effect on performance by providing formal control, alignment of policies, and resource distribution (Dubey et al., 2019). When these happen, leadership behaviors can be of incremental value, but they are not the key process of performance realization. The relative low level of moderation impact of the TL between the MC-OP relationship implies that management commitment is more formal, through structures, governance systems and resource allocation systems, and less relies on leadership amplification. Management commitment is embedded in organizational policy and strategic planning procedures, rather than being a capability such as communication effectiveness and green process innovation. Therefore, it’s incremental value and not transformational value when it comes to this relationship. Weak H4 finding can be explained in the light of Substitutes for Leadership Theory. The UAE Ministry of Interior (MOI) has a well-established formal policy and central governance to ensure strategic priorities are maintained. These structures can replace the impact of leadership, thus limiting the incremental effect of leadership on the MC-OP relationship.
Operational capabilities that include GPI and CE need ongoing interpretation, motivation and reinforcement of behaviour at the employee level. It is these areas that transformational leadership is essential (Ekaabi et al., 2020). The results thus indicate that there is a differentiated role of leadership with TL being more consequential in operational and behavioral areas than stratum-based strategic functions.
7.4. Moving towards a Boundary-Condition Approach to RBV
The findings add to an increasing literature that requires a more dynamic understanding of the Resource-Based View. The conventional RBV models tend to believe that valuable capabilities will automatically translate into high performance (Yusliza et al., 2019). The current results, however contradict this premise by showing that the performance value of capabilities depends on the context of leadership.
This study empirically supports a moderation-based RBV logic, according to which the efficacy of capabilities is conditional upon complementary resources, by demonstrating that TL dramatically changes the strength of the GPI-OP and CE-OP relationships (Ekaabi et al., 2020). Transformational leadership becomes a superior resource which adds value to existing capabilities via embedding them in the systems of shared meaning, encouraging employee involvement, and supporting their strategic significance (Lan et al., 2020).
This view transcends the linear resource-capability-performance links, and a more configurational view of organizational performance takes its place (Gomes & Romão, 2023). It recommends that capabilities cannot be assessed separately of the leadership context within which they are applied (Ekaabi et al., 2020).
7.5. UAE Public Sector Contextual Insights
The implications of the findings on the context of the work of the public-sector organizations in the reform-driven settings that include the UAE are also significant. The national agendas of sustainability, digital transformation, and service excellence demand not just the capabilities development but also effective implementation on a large scale (Adusei et al., 2023; Ebaid, 2023).
The high levels of moderation that have been found in both GPI and CE imply that transformational leadership is important in closing the gap between policy intent and operational reality. Leadership behaviors that encourage, motivate and involve employees seem crucial to making initiatives not to be turned into procedures of compliance in a system with formal structures and compliance requirements (Bataineh et al., 2024).
Further, the moderation effect of MC is relatively weaker which means that structural devotion is not enough to ensure optimal performance results. Leadership practices at various levels of the organization are essential in translation of strategic priorities into action even in highly centralized systems.
7.6. Synthesis of Findings
Combined, the findings provide evidence of reconceptualizing organizational performance in the public sector, as a process of capability presence and capability activation. Whereas MC, GPI, and CE give the resource base needed in performance, transformational leadership dictates how far the resources are mobilized.
This two-sided opinion provides a more holistic understanding of the dynamics of performance, with investments in capabilities complemented by investments in leadership development. In the absence of such alignment, even well-crafted organizational systems might not perform to their optimum capability.
8. Theoretical Contributions
This research contributes to theory by repositioning the concept of leadership in relationships between capabilities and performance. To start with, it changes the prevailing vision of the process explanation to the explanation of the boundary conditions. Instead of considering leadership as a process in which capabilities modulate performance, the results indicate that conditions of transformational leadership (TL) moderate the strengths of such relationships, which points to the time when capabilities are most effective.
Second, the research expands the Resource-Based View (RBV) by posing a moderation-based reasoning, showing that the value of organizational capabilities is not predetermined but relies on complementary resources like leadership. TL is a second-tier potential that improves the successful implementation of green innovation and communication practices.
The current study showed that strategic and operational capabilities can contribute to the organisational performance, and it does not necessarily have to follow a sequential resource-capability chain. This alternative specification expands on earlier research and shows that there are differences in the way that transformational leadership affects the effectiveness of capability. The results indicate that leadership has a differential impact on capabilities, with operational capabilities having a stronger influence on leadership’s impact on performance than strategic level capabilities.
Third, the results provide a differentiated perspective of leadership influence, where TL is more effective in operational capabilities (GPI and CE) than strategic commitment (MC) (Gachira & Ntara, 2024). This implies that leadership is especially important in fields that need behavioral mobilization as opposed to structural conformity. The research adds a more dynamic concept of performance, in which capabilities and leadership do not act but, instead, interact.
9. Conclusion
In this study, it was investigated whether transformational leadership can be a boundary condition that determines the effectiveness of organizational capabilities in the UAE public sector. The findings support the claim that management commitment, green process innovation, and communication effectiveness go a long way in improving performance in the organization. Their influence is not, however, everywhere the same. Transformational leadership is a much stronger predictor of the positive performance impact of green innovation and communication, but its impact on management commitment is relatively less strong. This implies that performance is not about the availability of capabilities alone but the activation of abilities by means of leadership. The results indicate that leadership is important in converting capabilities to quantifiable outputs within the settings of reforms in the public sector. More generally, the research contributes to the change in the perception of performance as a product of active interaction between capabilities and leadership situation.
10. Limitations and Future Research
There are a number of limitations in this study. Firstly, the cross-sectional design does not allow for causal relations to be drawn between the variables studied. Longitudinal designs could be used in future studies to investigate the causal effects over a longer period of time. Second, the study was carried out in one public sector organization (UAE Ministry of Interior), which might restrict the generalizability of the results. The model should be validated in other public and private sector settings in future studies.
Third, perceptual assessments were used to measure organizational performance, and not objective performance measures. While perceptual measures are popular in organizational research, future studies might be more externally valid with the addition of objective measures such as service delivery efficiency, citizen satisfaction scores, processing times, and departmental performance records. Lastly, only one moderating variable (transformational leadership) was used in this study. Future studies could focus on other types of leadership and factors in the context in order to have a more general understanding of the capability-performance relationship.