Digital transforming capability and performance: a microfoundational perspective

Foreign executives, digital transformation, and innovation performance: Evidence from Chinese-listed firms

This study investigates the effect of foreign executives on firms' innovation performance and the mediation role of digital transformation in Chinese-listed firms from 2011 to 2021. Our findings indicate that the presence of foreign executives in top management teams promotes firms' innovation performance by enhancing digital transformation. Further analyses show that foreign executives contribute significantly to improving firms' radical innovation performance rather than incremental innovation performance. We also examine the moderating effect of negative performance feedback and financing constraints between foreign executives and innovation performance, finding that foreign executives can promote innovation performance particularly in firms with negative performance feedback and weak financing constraints.

Inherent mechanism of digital technology application empowered corporate green innovation: Based on resource allocation perspective

Confronted with the treacherous digital wave and the aggressive environmental challenges, digital technology and green innovation are becoming critical tools for corporations to secure a sustainable advantage. The significance of identifying the role of digital technology application on corporate green innovation has been widely debated in the extant literature. Nevertheless, few researchers have investigated the inherent mechanism between them from the resource allocation perspective. From this research gap, we construct a theoretical model of the inherent mechanism by which digital technology application affects corporate green innovation, validate it using listed corporations in China from 2011 to 2020, and further investigate the differences in their inherent mechanism triggered by property rights and industry competition. We found that digital technology application is effective in promoting corporate green innovation. Stronger green innovation effect of digital technology application in state-owned corporations and those in highly competitive industries. The inherent mechanism between them manifest in optimizing the allocation of conventional labor, expanding the scale of non-conventional labor, and enhancing investment in R&D and digital infrastructure capital. We further explored that the impact of applying digital technology to optimize conventional labor allocation, expand non-conventional labor scale, and enhance investment in R&D and digital infrastructure capital is stronger for corporations in highly competitive industries than those in lowly competitive industries. The difference is that the role of the digital technology application in boosting capital investment in R&D does not differ across corporations with different property rights. Findings provide theoretical and empirical evidence on effectively developing the digital technology application's green innovative effects.

Linking competitive priorities, smart manufacturing advancement and organizational microfoundations

Purpose

Smart Manufacturing (SM) lies at the core of Industry 4.0. Operations management research has investigated the determinants of SM advancement but there is still limited understanding of the linkages between SM and organizational factors and about whether both the technological and organizational subsystems for SM are guided by firms’ competitive priorities. To close these gaps, building on operations strategy theory, this paper aims to empirically test a model positing that competitive priorities drive SM advancement. The relation between competitive priorities and SM advancement is assumed to be mediated by organizational microfoundations.

Design/methodology/approach

Using data from a single respondent survey with 234 firms in the automotive component industry, structural equation modeling is adopted to test the model hypotheses. Relevant constructs are measured with reference to the lead plant for SM.

Findings

Findings highlight that SM advancement is driven by the need to simultaneously compete in terms of cost, quality and delivery, thus suggesting that manufacturers view SM as a mean to develop multiple manufacturing capabilities. Organizational microfoundations fully mediate the relation between competitive priorities and SM advancement.

Originality/value

Results have implications for SM research, as they provide an understanding of the strategic priorities of firms engaging in SM. Findings also bear relevance for manufacturing executives engaged in the SM transformation, as they provide quantitative evidence that shaping an adequate organizational environment is a prerequisite for SM advancement.

A study of the factors which influence digital transformation in Kibs companies

Eighteen interviews were used in this research to inductively conceptualize the factors that influence digital transformation (DT) in Kibs companies that provide multidisciplinary Knowledge Intensive Business Services. Two main groups were identified: factors of DT and use in the new digital environment. Using the findings obtained, a comparison was made with the existing literature and the most relevant aspects of DT as a disruptive phenomenon which can generate intra-organizational competitive advantage are exposed.

Objective

To identify the factors of innovation-oriented organizational management, generated by the collaboration of the professional grouping of Kibs companies through the systematization of knowledge, which serve to conceptually delimit the DT phenomenon. Ultimately, it is expected to establish recommendations for this type of companies based on providing services with high knowledge value that strive to digitally transform their businesses.

Originality

the paper contributes to advancing the conceptual understanding of DT through the study of Kibs companies, which remain understudied. Likewise, there is no known study that analyzes the factors that give rise to DT in a professional grouping of small Kibs companies. It is clear that this union of small companies generates a strong internal capacity for knowledge absorption, through daily interactions with clients and public administrations, which favors the process of implementing certain technological and strategic components that are beneficial for the development of professional activity and increases the propensity to innovate.

Methodology

qualitative content was analysed using a grounded theory methodology including interviews with experts and the managers of the Kibs companies in the professional sector to obtain a solid basis that can be used to identify the most relevant factors of DT.

Findings/results

as DT is a multidimensional phenomenon of individual companies, this study presents a conceptual framework for the term with the strategic requirements of the market, organizations, public institutions and technological infrastructures of the professional sector. By considering the disruptive factors of digital development in this macroenvironment, conclusions can be made about the basic principles and effects of DT.

The impact of digital transformation on corporate total factor productivity

Introduction

Corporates need to break through the dilemma of system and efficiency with the help of digital transformation in the digital economy era. This paper aims to examine the influence of digital transformation on corporate total factor productivity by investigating whether and how corporate technical cooperation and ESG performance mediate and moderate the relationship between them.

Methods

This study choose Chinese A-share listed manufacturing firms from 2016-2020 as the research sample and use the FGLS regression model to test the proposed hypotheses.

Results

Results show that digital transformation has a positive effect on corporate total factor productivity, and this positive impact is more pronounced when corporates have higher ESG performance. Corporate technical cooperation plays a mediating role between digital transformation and total factor productivity. ESG performance also plays a positive moderating role in the relationship between digital transformation and corporate technical cooperation.

Discussion

Our results contribute to the literature on digital transformation and corporate total factor productivity at the micro-corporate level. Further, our findings offer insights to decision-makers and regulatory bodies regarding the current practices of digital transformation and its potential economic impact.

Big data and big disaster: a mechanism of supply chain risk management in global logistics industry

Purpose

Although big data may enhance the visibility, transparency, and responsiveness of supply chains, whether it is effective for improving supply chain performance in a turbulent environment, especially in mitigating the impact of COVID-19, is unclear. The research question the authors addressed is: How do logistics firms improve the supply chain performance in COVID-19 through big data and supply chain integration (SCI)?

Design/methodology/approach

The authors used a mixed-method approach with four rounds of data collection. A three-round survey of 323 logistics firms in 26 countries in Europe, America, and Asia was first conducted. The authors then conducted in-depth interviews with 55 logistics firms.

Findings

In the first quantitative study, the authors find mediational mechanisms through which big data analytics technology capability (BDATC) and SCI influence supply chain performance. In particular, BDATC and SCI are two second-order capabilities that help firms develop three first-order capabilities (i.e. proactive capabilities, reactive capabilities, and resource reconfiguration) and eventually lead to innovation capability and disaster immunity that allow firms to survive in COVID-19 and improve supply chain performance. The results of the follow-up qualitative analysis not only confirm the inferences from the quantitative analysis but also provide complementary insights into organizational culture and the institutional environment.

Originality/value

The authors contribute to supply chain risk management by developing a three-level hierarchy of capabilities framework and finding a mechanism with the links between big data and big disaster. The authors also provide managerial implications for logistics firms to address the new management challenges posed by COVID-19.

Does the regional environment matter in ERP system adoption? Evidence from Russia

Purpose

This paper explores the effect the regional technological environment has on technology-driven performance, measured by enterprise resource planning (ERP).

Design/methodology/approach

This study specifies a productivity-based production function driven by ERP system adoption. Employing a quasi-experimental research design, the author disentangles two effects – the average effect of ERP adoption and the moderation effect of the regional technological environment. The novelty of this study is that it merges publicly available information retrieved via text-mining tools and official financial reports published by companies.

Findings

The total effect of technology adoption on productivity varies from almost 3%–9% in different technological environments. Moreover, this study’s results revealed that the regional technological environment could enhance the effect of adopting different ERP systems.

Originality/value

While some papers investigate the relationship between ERP adoption and firm performance regarding the environmental context of a firm, the effect of the regional technological environment on the relationship between technology adoption and firm performance is understudied. Thus, this research tries to contribute to a deeper understanding of the regional context's impact on technology-driven performance. The authors used automated content analysis to collect data on technology adoption; by doing so, this study contributes to the growing body of research utilising the text-mining approach to extract data stored in Internet-based information sources.

The too-much-of-a-good-thing effect of digitalization capability on radical innovation: the role of knowledge accumulation and knowledge integration capability

Purpose

This study aims to investigate the complex relationship between digitalization capability (DC) and radical innovation performance (RIP). In particular, this study sheds new light on the results of previous studies on the effects of DC on firm innovation.

Design/methodology/approach

The authors obtained questionnaire data from 271 IT managers of randomly selected high-tech Chinese firms. The data was used to empirically test the proposed hypotheses using hierarchical regression analysis.

Findings

The findings of this study reveal that DC has an inverted U-shaped effect on RIP. Knowledge accumulation (KA) has a partial mediating effect on the DC–RIP link. Knowledge integration capability (KIC) was found to moderate the DC–RIP relationship: the higher a firm’s KIC, the flatter the DC–RIP curve. Moreover, there is empirical evidence of the shape-flip phenomenon of the DC–RIP curve: when KIC > 1.82, the DC–RIP relationship is no longer an inverted U-shaped but presents as a U-shaped curve.

Research limitations/implications

This study explores the DC–RIP relationship from the perspective of knowledge management, deepens the research scope of digitalization and lays the foundation for subsequent research.

Originality/value

This study provides potential explanations for contradictory views of the effect of DC on innovation in the existing literature by revealing the nonlinear relationship of DC and RIP and the important roles of KA and KIC in that relationship. The new insights into the role of KIC as a threshold for the DC–RIP link provide a direction for firms to control the pace of digital transformation.

Assessment of digital and communication technologies in Russian organizations at the regional level

The article deals with the problem of development and methodological tools application for a comprehensive assessment of regional features of the digital and communication technologies use by organizations in Russia. The purpose of the study is to evaluate the indicators characterizing the use of digital and communication technologies in organizations located in different Russian regions. The official information of Rosstat agency for 2020 was used as empirical data. Modeling of empirical data was carried out according to the author’s methodology, based on the development of density functions of the normal distribution of three indicators by region. The variance analysis of indicators by regions with their minimum and maximum values was based on the ANOVA method. The study showed that about 82.2 % of organizations used digital technologies. The level of use of communication technologies was significantly lower. 66.1 % of organizations used the Internet to provide statistical, tax and other reporting. The share of organizations involved in electronic procurement for state or municipal needs was 38.6 %. Lists of regions were compiled in which the maximum and minimum values of indicators characterizing the use of digital and communication technologies by organizations were noted in 2020. The results of the work can be used in the activities of federal and regional structures related to the regulation and planning of the development of these technologies and the justification for allocating additional resources to regions with a low level of their use.

Digital orientation, digital maturity, and digital intensity: determinants of financial success in digital transformation settings

Purpose

This study aims to investigate three relevant antecedents of digital transformation (digital orientation, digital intensity and digital maturity) and their influences on the financial success of companies.

Design/methodology/approach

Building on the strategic management and digital transformation literature, five hypotheses are developed to find the relationships between these antecedents and financial success.

Findings

Digital orientation and digital intensity alone do not contribute to the financial success of companies. Specifically, digital intensity serves as a negative moderator between digital orientation and financial success, meaning that it reduces the performance effects of digital orientation. Digital maturity acts as a mediator between digital orientation and the financial success of companies and between digital intensity and the financial success of companies.

Originality/value

This research contributes to the literature on strategic management and digital transformation by providing a further understanding of three relevant antecedents of digital transformation (digital orientation, digital intensity and digital maturity) and how they should be positioned alongside digital transformation settings to achieve financial success.

The role of absorptive capacity in the adoption of Smart Manufacturing

Purpose

Smart Manufacturing (SM) lies at the core of Industry 4.0. Operations management research has identified several factors influencing firms’ ability to adopt SM. However, a clear understanding of capabilities needed to progress in SM is still missing. This paper aims to investigate how absorptive capacity (AC) allows firms to advance in SM and explore how managerial antecedents support the capacity to absorb SM-related knowledge at different stages of SM adoption.

Design/methodology/approach

This study adopts an exploratory approach through multiple case studies. Twelve firms, operating as part of the automotive supply chain and exhibiting different stages of SM adoption, constitute the sample.

Findings

The results suggest that advancement in SM requires firms to progressively reinforce their AC. Firms’ ability to acquire and assimilate SM knowledge is supported by managerial antecedents encompassing integrative capacities to bridge old and SM technologies, managerial cognition through the clear alignment of SM technologies with strategic goals and knowledge development capabilities through practices oriented to provide senior managers with SM competences.

Originality/value

The findings contribute to SM research by suggesting that AC is a crucial dynamic capability for SM adoption. The results also provide evidence-grounded recommendations to firms engaged in the digital transformation on the managerial capabilities needed to support AC and to progress from lower to higher stages of SM.

Developing a learning-to-learn capability: insights on conditions for Industry 4.0 adoption

Purpose

This paper investigates how manufacturers can develop a learning-to-learn capability for enabling Industry 4.0 adoption.

Design/methodology/approach

This research design is guided by our research question: How can manufacturers develop a learning-to-learn capability that enables Industry 4.0 adoption? The authors adopt action research to generate actionable knowledge from a two-year-long action learning intervention at the Danish rooftop window manufacturer VELUX.

Findings

Drawing on emergent insights from the action learning intervention, it was found that a learning-to-learn capability based on lean was a core construct and enabler for manufacturers to adopt Industry 4.0 successfully. Institutionalizing an organizational learning scaffold encompassing the intertwined learning processes of systems Alpha, Beta and Gamma served as a significant way to develop a learning-to-learn capability for Industry 4.0 adoption (systematic problem-solving abilities, leaders as learning facilitators, presence of a supportive learning environment and Industry 4.0 knowledge). Moreover, group coaching is a practical action learning intervention for invoking system Gamma and developing leaders to become learning facilitators – an essential leadership role during Industry 4.0 adoption.

Originality/value

The study contributes to theory and practice by adopting action research and action learning to explore learning-to-learn as a core construct for enabling Industry 4.0 adoption and providing a set of conditions for developing a learning-to-learn capability. Furthermore, the study reveals that leaders are required to act as learning facilitators instead of relying on learning about and implementing Industry 4.0 best practices for enabling adoption.

The Effects of Digital Transformation on Firm Performance: Evidence from China’s Manufacturing Sector

With vast potentials in improving operations and stimulating growth, digital transformation has aroused much attention from firms across the world. However, the high costs associated with the transformation can not be ignored. Limited research has looked into the organizational performance effects of digital transformation. After examining the benefits and costs of digital transformation, this research makes an empirical study on the impact of digital transformation on firm operational and financial performance. The panel data from 2010 to 2020 of 2254 manufacturing companies in China suggests that the intensity of digital transformation is in positive correlation with the process-based operating performance, and in the U-shaped correlation with the profit-oriented financial performance. Further, we find that digital transformation has a much more lasting impact on operating performance than on financial performance. The conditions required (i.e., policy and innovation environment) to improve the operating performance via digital transformation are more easing. This research shows the differentiated effect of digital transformation on different dimensions of organizational performance and provides guidance for companies to set the goals for digital transformation.

Benchmarking smart manufacturing drivers using Grey TOPSIS and COPRAS-G approaches

Purpose

The objective of the study is to identify and analyse drivers of smart manufacturing using integrated grey-based approaches. The analysis facilitates industry practitioners in the identification of preference of drivers through which smart manufacturing can be implemented. These drivers are explored based on existing literature and expert opinion.

Design/methodology/approach

Modern manufacturing firms have been adopting smart manufacturing concepts to sustain in the global competitive landscape. Smart manufacturing incorporates integrated technologies with a flexible workforce to interlink the cyber and physical world. In order to facilitate the effective deployment of smart manufacturing, key drivers need to be analysed. This article presents a study in which 25 drivers of smart manufacturing and 8 criteria are analysed. Integrated grey Technique for Order Preference by Similarity to Ideal Solution (grey TOPSIS) is applied to rank the drivers. The derived ranking is validated using “Complex Proportional Assessment – Grey” (COPRAS-G) approach.

Findings

In total, 25 drivers with 8 criteria are being considered and an integrated grey TOPSIS approach is applied. The ranking order of drivers is obtained and further sensitivity analysis is also done.

Research limitations/implications

In the present study, 25 drivers of smart manufacturing are analysed. In the future, additional drivers could be considered.

Practical implications

The study presented has been done with inputs from industry experts, and hence the inferences have practical relevance. Industry practitioners need to focus on these drivers in order to implement smart manufacturing in industry.

Originality/value

The analysis of drivers of smart manufacturing is the original contribution of the authors.

Exploring digital servitization trajectories within product–service–software space

Purpose

This study shows various pathways manufacturers can take when embarking on digital servitization (DS) journeys. It builds on the DS and modularity literature to map the strategic trajectories of product–service–software (PSSw) configurations.

Design/methodology/approach

The study is exploratory and based on the inductive theory building method. The empirical data were gathered through a workshop with focus groups of 15 servitization manufacturers (with 22 respondents), an on-site workshop (in-depth case study), semi-structured interviews, observations and document study of archival data.

Findings

The DS trajectories are idiosyncratic and dependent on design architectures of PSSw modules, balancing choices between standardization and innovation. The adoption of software systems depends on the maturity of the industry-specific digital ecosystem. Decomposition and integration of PSSw modules facilitate DS transition through business model modularity. Seven testable propositions are presented.

Research limitations/implications

With the small sample size from different industries and one in-depth case study, generalizing the findings was not possible.

Practical implications

The mapping exercise is powerful when top management from different functional departments can participate together to share their expertise and achieve consensus. It logs the “states” that the manufacturer undergoes over time.

Originality/value

The Digital Servitization Cube serves as a conceptual framework for manufacturers to systematically map and categorize their current and future PSSw strategies. It bridges the cross-disciplinary theoretical discussion in DS.