Digital Transformation and Leadership: Navigating Challenges and Seizing Opportunities

Digital transformation (DT) has become a strategic imperative, reshaping sectors and challenging traditional models of leadership. As organizations adopt digital technologies, leaders must deal with complex challenges and seize emerging opportunities on important fronts like decision-making, communication and collaboration, innovation, employee empowerment, and ethics. This systematic review integrates the impact of DT on leadership through the integration of knowledge from established theory such as the Technology–Organization–Environment (TOE) framework (Tornatzky & Fleischer, 1990), Dynamic Capabilities Theory (Teece et al., 1997), and Socio-Technical Systems Theory (Bostrom & Heinen, 1977). The review explains how DT makes decision making more complex by the excess of data, redefines communication as computer-aided work tools, and creates innovation for risk of “innovation fatigue.” It also strengthens the leadership roles in empowering individuals and answering issues of ethics amidst data privacy, algorithmic bias, and cyber security. By synthesizing these perspectives, the review underscores the central significance of leadership in helping organizations change, innovate, and remain adaptable during the digital age. The research contributes to the digital leadership debate by uncovering gaps in prior research studies and providing a foundation for future empirical research.