Introduction

Digital transformation has emerged as a critical driver for organizational competitiveness and sustainability in contemporary business environments. As organizations face rapid technological evolution and increasing market dynamism, the strategic thinking of managers plays a pivotal role in guiding digital initiatives and leveraging organizational resources effectively. Despite extensive literature on digital transformation, there remains a gap in understanding how managerial strategic thinking influences sustainable digital transformation through dynamic digital capabilities and organizational absorptive capacity. Additionally, environmental uncertainty is hypothesized to moderate these relationships, yet empirical evidence on its actual impact remains inconclusive. The current study aims to investigate the direct and indirect effects of managers’ strategic thinking on sustainable digital transformation, mediated by dynamic digital capabilities and organizational absorptive capacity, while also assessing the moderating role of environmental uncertainty. By addressing these questions, this research contributes to both theoretical advancements in digital transformation literature and practical insights for organizations navigating complex and uncertain environments.



Methodology

The study employed a quantitative research design, collecting data through structured questionnaires administered to organizational employees and managers. A total of 119 responses were received, with a gender distribution of 66.7% male and 33.3% female participants. The majority of respondents (52.6%) were aged between 25 and 34 years, and 57% held postgraduate degrees. Data analysis was conducted in two stages: descriptive statistics to summarize respondent characteristics and inferential statistics to test the proposed hypotheses. Descriptive analyses, including frequencies, percentages, and demographic distributions, were performed using SPSS version 26 to ensure data quality and initial exploration. For hypothesis testing and structural model evaluation, SmartPLS version 4 was applied to perform Partial Least Squares Structural Equation Modeling (PLS-SEM), adopting the variance-based approach to examine both the measurement and structural models. The measurement model was assessed for reliability and validity using Cronbach’s alpha, composite reliability (CR), average variance extracted (AVE), and factor loadings, ensuring convergent and discriminant validity. For discriminant validity, the Heterotrait-Monotrait (HTMT) ratio criterion was applied. Structural model evaluation included the assessment of path coefficients, significance levels (t-statistics and p-values), coefficient of determination (R²), predictive relevance (Q²), and overall model fit using the standardized root mean square residual (SRMR).



Findings

The measurement model results demonstrated adequate reliability and validity across all constructs. Factor loadings for all indicators exceeded the recommended threshold of 0.6, indicating strong convergent validity. Cronbach’s alpha and composite reliability values ranged from 0.797 to 0.940 and 0.863 to 0.951, respectively, while AVE values were all above 0.5, confirming internal consistency and convergent validity. Most HTMT values were below the 0.85 threshold, indicating adequate discriminant validity among constructs. However, the HTMT value between Digital Dynamic Capabilities and Sustainable Digital Transformation was 0.922, exceeding the threshold and suggesting a lack of discriminant validity between these two constructs. Structural model analysis revealed that most hypothesized paths were statistically significant. Managers’ strategic thinking positively influenced organizational absorptive capacity (β = 0.264, t = 3.012, p = 0.003) and dynamic digital capabilities (β = 0.469, t = 6.474, p = 0.003). Organizational absorptive capacity also significantly impacted sustainable digital transformation (β = 0.184, t = 2.575, p = 0.010), while dynamic digital capabilities exhibited a strong positive effect on sustainable digital transformation (β = 0.709, t = 11.926, p < 0.001). Mediation analysis indicated that dynamic digital capabilities partially mediated the relationship between strategic thinking and sustainable digital transformation, as well as between absorptive capacity and sustainable digital transformation. However, the moderating effect of environmental uncertainty on the relationship between dynamic digital capabilities and sustainable digital transformation was not supported (β = -0.033, t = 0.627, p = 0.531), and the direct effect of environmental uncertainty on sustainable digital transformation was non-significant (β = -0.001, t = 0.025, p = 0.980). Model explanatory power was confirmed with R² values of 0.070 for absorptive capacity, 0.538 for dynamic digital capabilities, and 0.687 for sustainable digital transformation, indicating moderate to substantial predictive relevance. Predictive relevance (Q²) values for all endogenous constructs were above zero (absorptive capacity = 0.047, dynamic digital capabilities = 0.0323, sustainable digital transformation = 0.247), confirming model quality. The SRMR value of 0.083 indicated an acceptable model fit according to established PLS-SEM criteria.



Discussion and Conclusion

The findings highlight the critical role of managers’ strategic thinking in fostering both organizational absorptive capacity and dynamic digital capabilities, which in turn drive sustainable digital transformation. This suggests that organizations seeking to achieve long-term digital success should prioritize strategic leadership development and invest in enhancing both knowledge absorption mechanisms and dynamic digital capabilities. The mediating role of dynamic digital capabilities underscores the importance of leveraging technology-based competencies to translate strategic intent into tangible digital transformation outcomes. Conversely, the non-significant moderating effect of environmental uncertainty indicates that, in this study context, managerial strategic thinking and organizational capabilities may buffer or outweigh external uncertainties in shaping digital transformation success. Theoretical implications include refining models of digital transformation by incorporating both managerial cognition and dynamic capabilities, while practical implications emphasize actionable strategies for enhancing absorptive capacity and digital agility within organizations. Overall, the study contributes to a more nuanced understanding of how internal organizational resources and managerial cognition jointly facilitate sustainable digital transformation, providing guidance for both scholars and practitioners in complex and rapidly evolving business environments. Future research could extend this model by exploring sector-specific contingencies, longitudinal effects, and alternative moderating factors to further validate the robustness of these relationships.