Leadership, Artificial Intelligence Capability, and Total Quality Management as Strategic Determinants of Sustainable Operational Excellence Across Industries

Abstract

Sustainable operational excellence has become a strategic priority for organizations seeking to enhance competitiveness, resilience, innovation, and long-term sustainability in increasingly dynamic business environments. This study examined the influence of Leadership, Artificial Intelligence Capability, and Total Quality Management on Sustainable Operational Excellence across industries and developed an empirically validated structural model explaining their relationships. The study employed a quantitative, descriptive- correlational, and causal research design utilizing Structural Equation Modeling (SEM). Data were collected from 450 managerial, supervisory, and professional employees from selected service and manufacturing organizations in the Philippines using a structured survey questionnaire. Descriptive statistics and SEM were utilized to analyze the data. The findings revealed that Leadership (M = 3.44, SD = 0.55), Artificial Intelligence Capability (M = 3.38, SD = 0.58), Total Quality Management (M = 3.53, SD = 0.51), and Sustainable Operational Excellence (M = 3.50, SD = 0.50) were all manifested at very high levels. SEM results indicated that Leadership (β = 0.29, p < .001), Artificial Intelligence Capability (β = 0.24, p < .001), and Total Quality Management (β = 0.43, p < .001) significantly and positively influenced Sustainable Operational Excellence, with Total Quality Management emerging as the strongest determinant. The final structural model demonstrated acceptable to good model fit (CMIN/DF = 2.41, GFI = 0.91, AGFI = 0.90, CFI = 0.94, TLI = 0.93, RMSEA = 0.058, SRMR = 0.052) and explained 61% of the variance in Sustainable Operational Excellence (R² = 0.61). The study concludes that sustainable operational excellence is best achieved through the strategic integration of leadership effectiveness, artificial intelligence capability, and total quality management. The findings provide theoretical and managerial insights for organizations pursuing sustainable performance and long-term competitive advantage across industries.