ASSESSING THE MEDIATING ROLE OF ORGANIZATIONAL DIGITALIZATION BETWEEN TECHNOLOGY SKILL DEVELOPMENT AND ORGANIZATIONAL SUSTAINABILITY PERFORMANCE: EVIDENCE FROM TEXTILE INDUSTRY.

Abstract

In today’s digital and competitive business environment, organizational sustainability performance (OSP) has become a strategic priority for small and medium-sized enterprises (SMEs). Technology skill development (TSD) is recognized as a key capability that enables firms to adopt digital technologies and implement sustainable practices. However, the mechanisms through which technology-related skills influence sustainability outcomes remain underexplored. This study examines the impact of TSD on OSP, with organizational digitalization (OD) serving as a mediating mechanism. Grounded in Dynamic Capability Theory and the Resource-Based View, the study hypothesizes that TSD enhances OD, which subsequently improves sustainability performance across economic, environmental, and social dimensions. Data were collected from textile SMEs in Punjab, Pakistan, using structured questionnaires, and analyzed through Partial Least Squares Structural Equation Modeling (PLS-SEM) in SmartPLS. The findings indicate that TSD significantly improves both OD and OSP, and OD partially mediates the relationship between TSD and sustainability performance. The study contributes to the literature by empirically validating OD as a critical mechanism linking technology skills to sustainability outcomes. For managers, the results emphasize the importance of continuous investment in employee technology skills and digital transformation to enhance long-term sustainability in SMEs