Abstract
As environmental sustainability, digital transformation, and innovation become increasingly critical organizational priorities on a global scale, the transformative role of leadership in these processes has gained prominence. In this context, green transformational leadership is recognized as a key driver of organizational transformation, not only through its environmentally focused strategic orientation but also through its ability to shape employee behaviors. This study aims to examine the impact of green transformational leadership on digital transformation and innovative behavior, while exploring the mediating role of employees’ financial needs. The research was conducted with data collected from 426 employees of small and medium-sized enterprises operating in Giresun and Kars provinces. Employing a quantitative research design, the study utilized structural equation modeling and conducted comprehensive analyses of scale validity, reliability, and mediation tests. The findings reveal that green transformational leadership has a significant and positive effect on both digital transformation and innovative behavior. Furthermore, financial needs were found to partially mediate the relationships between these constructs. The results indicate that leadership support, when reinforced by perceptions of financial security, yields stronger outcomes in cognitively demanding processes such as digital transformation and innovation. Based on these findings, it is emphasized that organizations should approach green leadership practices not only from an environmental sustainability perspective but also by integrating them with employee well-being and digitalization capabilities. The study provides practical and theoretical contributions to the literature by holistically addressing the interaction between green leadership and financial needs in the context of digital transformation and innovative behavior.
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