Digital-Era Leadership Readiness and Decision-Making in Pakistani Banks

Abstract

Digital transformation is reshaping banking decision-making, yet the role of leadership readiness in enabling this shift remains under-examined in emerging economies. This study reframes leadership readiness for the digital age by examining its influence on decision-making practices in Pakistan’s banking sector. Drawing on Technology Readiness Theory and the Technology–Organization–Environment (TOE) framework, leadership readiness is conceptualized as a multidimensional construct comprising behavioral openness, digital awareness, and technological capability. Using a quantitative survey design, data were collected from leaders and managerial-level employees across public and private banks in Pakistan. Structural Equation Modelling (SEM) was employed to test the hypothesized relationships. The findings indicate that leadership readiness has a significant positive effect on the adoption of digital enablers, including AI-supported HR analytics and decision support systems. Digital enabler adoption, in turn, enhances organisational decision-making quality by promoting evidence-based and analytically grounded practices. Mediation analysis further reveals that digital enabler adoption partially mediates the relationship between leadership readiness and decision-making quality, underscoring the central role of technology assimilation in digital-era governance. This study contributes to the literature by positioning leadership readiness as a strategic antecedent of rational decision-making in banking and offers practical implications for leadership development and digital capability building in emerging market contexts.