The Influences of Accountability Leadership and Employee Empowerment on Stakeholder Engagement in Malaysian SMEs Amid Digital Transformation: the Mediating Role of Communication Effectiveness

Fan, Ming Hui (2025) The Influences of Accountability Leadership and Employee Empowerment on Stakeholder Engagement in Malaysian SMEs Amid Digital Transformation: the Mediating Role of Communication Effectiveness. Masters thesis, Tunku Abdul Rahman University of Management and Technology.

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Abstract

This study investigates the influence of Accountability Leadership and Employee Empowerment on Stakeholder Engagement among Malaysian Small and Medium-sized Enterprises (SMEs) amid the ongoing wave of digital transformation, with Communication Effectiveness examined as a mediating variable. The research is driven by the increasing need for SMEs to strengthen their stakeholder relationships in a rapidly evolving business environment. Using a quantitative research design, data was collected through online questionnaires distributed to SME owners and employees across Malaysia. A total of 256 valid responses were obtained and analysed using SPSS Version 29.0 and PLS-SEM. Various statistical techniques, including descriptive analysis, correlation analysis, measurement model assessment, structural model evaluation, and mediation analysis, were applied to test the proposed hypotheses. The findings reveal that Accountability Leadership and Employee Empowerment both have a significant positive impact on Stakeholder Engagement. Furthermore, Communication Effectiveness was found to mediate the relationships between the independent variables and Stakeholder Engagement, reinforcing its pivotal role within organisational communication frameworks. However, not all direct relationships between Communication Effectiveness and Stakeholder Engagement were statistically significant, suggesting that additional contextual factors may influence this dynamic. The study provides valuable theoretical contributions by integrating leadership, empowerment, and communication theories in the context of Malaysian SMEs. Practically, it offers important insights for SME leaders and policymakers on the need to foster accountable leadership behaviours, empower employees, and enhance communication strategies to strengthen stakeholder engagement and improve organisational resilience during digital transformation. Limitations and recommendations for future research are also discussed to guide ongoing inquiry into this critical area. Keywords: Accountability Leadership, Employee Empowerment, Communication Effectiveness, Stakeholder Engagement, SMEs, Digital Transformation