Responding to Digital Transformation: The Implication of Transformational Leadership to Predict MSMEs Learning Agility

Leadership is crucial to organizational agility. However, the question remains how MSMEs managers may combine the four aspects of transformational leadership to boost organizational agility in the digital transformation era. This research examines the link between transformational leadership in predicting the learning agility of MSMEs. A sample of 203 Indonesian MSMEs’ employees investigated the research hypothesis. Fuzzy set qualitative comparative analysis (fsQCA) method was used to investigates the complex causality of transformational leadership towards MSMEs’ learning agility. FsQCA found five configurations linked to high agility and this study resulted that idealized influence, inspirational motivation and individual consideration will lead the MSMEs to achieve high learning agility. This research gives theoretical and managerial direction to scholars and managers who want to encourage organizational learning agility in the MSME sector by utilizing the four dimensions of transformational leadership. Next, other theoretical contribution, practical implication, and future direction are also discussed.