Influence of Digital Transformation Capability on Operational Performance
Abstract
:1. Introduction
2. Literature Review
2.1. Dynamic Capability Theory
2.2. Strategic Orientation
2.3. Digital Transformation Capability
2.4. Operational Performance
3. Research Model and Hypotheses
3.1. Research Model
3.2. Research Hypotheses
4. Research Design
4.1. Measurement
4.2. Data Collection
5. Data Analysis
5.1. Tests of the Measurement Model
5.2. Test of the Structural Model
5.3. Test on Mediating Effects of the Digital Transformation Capability
5.4. Additional Analysis
6. Discussion
6.1. Implications
6.2. Limitations and Future Research
7. Conclusions
Author Contributions
Funding
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Conflicts of Interest
References
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Factor | Operational Definition | Measurement |
---|---|---|
Customer Orientation | The extent to which the enterprise has sufficient understanding of its target customers to continuously create superior value for them. | 1. Competitive advantage is based on understanding customers’ needs. |
2. Business objectives are driven primarily by customer satisfaction. | ||
3. Measure customer satisfaction frequently and systematically. | ||
4. Pay close attention to after-sales service for customer satisfaction. | ||
5. Continuously try to discover additional customer needs that they are unaware of. | ||
Technology Orientation | The extent to which the enterprise is inclined to introduce or use new digital manufacturing technologies in the transformation process. | 1. Proactively develop new technologies. |
2. Use sophisticated technologies in new product development. | ||
3. New products are always at the state of the art in the level of the technology. | ||
4. Technological innovation is readily accepted in our program/project management. | ||
5. Based on the results of technological innovation, it has been accepted by our organization. | ||
Sensing | The organizational capability to monitor changes, identify opportunities and formulate a digital strategy. | 1. Monitor changes and trends in the marketplace. |
2. Scan for opportunities and threats in the environment. | ||
3. Identify inefficiencies in existing business processes. | ||
4. Identify opportunities for organizational change based on market conditions. | ||
5. Foresee a wide range of actionable options based on the surroundings. | ||
6. Seek new opportunities for strategic uses of IT. | ||
7. Determine the needs for a digital transformation strategy. | ||
8. Formulate the digital transformation strategy. | ||
Organizing | The organizational capability to align digital resources with business needs, sources digital resources, then fully combines available digital resources. | 1. Align the digital transformation strategy with business goals and strategies. |
2. Try to allocate management resources for digital transformation. | ||
3. Implement active interactions between other functions such as manufacturing, marketing and services. | ||
4. Integrate internal resources and competency for digital transformation. | ||
5. Integrate external resources such as expert skills and knowledge for digital transformation. | ||
6. Combine internal and external resources for digital transformation. | ||
7. Emphasize the strategic role of the sourcing function for digital transformation. | ||
8. Prioritize digital transformation investments by the expected impact on business performance. | ||
Restructuring | The organizational capability to innovate digital resources, coordinate organizational structures and facilitate sustainable development of a digital transformation. | 1. Seek new ways to do something. |
2. Frequently try to innovate new products and services. | ||
3. Continually develop and produce new products or services. | ||
4. Try to maintain time to market with new products and services. | ||
5. Try to reconfigure the resources for new products and services. | ||
6. Try to apply knowledge resources to new products and services. | ||
7. Try to fit business processes into integrated resources. | ||
8. Cooperate with each other to solve conflicts. | ||
9. Facilitate a sustainable effort to implement a digital transformation strategy. | ||
Operational Performance | The achievements and contributions made in product quality, the production process, costs, and other aspects through the digital transformation. | 1. Raise the quality of products and services. |
2. Increase process improvements. | ||
3. Reduce total costs. | ||
4. Attract more customers. | ||
5. Easily modify products to a specific customer need. |
Item | Category (N = 162) | Frequency | Percentage |
---|---|---|---|
Position | Department Manager | 30 | 18.5 |
Senior Manager | 80 | 49.4 | |
Executive (CEO, CMO, CFO, CIO) | 52 | 32.1 | |
Years Since Established | Less than 5 years | 13 | 8.0 |
5–10 years | 30 | 18.5 | |
10–15 years | 76 | 46.9 | |
More than 15 years | 42 | 26.5 | |
Main Industry Type | Automobile | 30 | 18.5 |
Machine & Equipment | 22 | 13.6 | |
Electronics | 36 | 22.2 | |
Textile & Clothing | 28 | 17.3 | |
Food & Beverage | 20 | 12.3 | |
Medical & Medicine | 17 | 10.5 | |
Other | 9 | 5.6 | |
Number of Employees | Less than 100 | 15 | 9.3 |
100–300 | 23 | 14.2 | |
300–2000 | 50 | 30.9 | |
2000–10,000 | 39 | 24.1 | |
More than 10,000 | 35 | 21.6 | |
Annual Sales | Less than RMB 30 million (US$4.3 million) | 12 | 7.4 |
RMB 30–100 million (US$4.3–14.3 million) | 15 | 9.3 | |
RMB 100–500 million (US$14.3–71.5 million) | 49 | 30.2 | |
RMB 500 million-1 billion (US$71.5–143 million) | 54 | 33.3 | |
More than RMB 1 billion (US$143 million) | 32 | 19.8 | |
Digital Transformation Objectives(multiple choice) | To meet customer needs and customer satisfaction | 108 | 67.7 |
To speed up decision making and delivery | 98 | 60.5 | |
To sustain competitive advantage | 94 | 58.0 | |
To diminish production and process costs | 95 | 58.6 | |
To enhance operational efficiency | 100 | 61.7 | |
To facilitate new product development | 84 | 51.9 | |
Other | 25 | 15.4 |
Factor | Items | Loadings | AVE | CR | Cronbach’s Alpha |
---|---|---|---|---|---|
Customer Orientation | cuo1 | 0.840 | 0.708 | 0.924 | 0.897 |
cuo2 | 0.815 | ||||
cuo3 | 0.837 | ||||
cuo4 | 0.865 | ||||
cuo5 | 0.850 | ||||
Technology Orientation | to1 | 0.853 | 0.706 | 0.923 | 0.896 |
to2 | 0.865 | ||||
to3 | 0.842 | ||||
to4 | 0.854 | ||||
to5 | 0.785 | ||||
Sensing | sen1 | 0.813 | 0.652 | 0.918 | 0.893 |
sen2 | 0.834 | ||||
sen3 | 0.813 | ||||
sen4 | 0.797 | ||||
sen7 | 0.841 | ||||
sen8 | 0.745 | ||||
Organizing | org1 | 0.787 | 0.648 | 0.917 | 0.891 |
org2 | 0.864 | ||||
org3 | 0.804 | ||||
org6 | 0.814 | ||||
org7 | 0.761 | ||||
org8 | 0.795 | ||||
Restructuring | res2 | 0.820 | 0.665 | 0.923 | 0.899 |
res3 | 0.843 | ||||
res6 | 0.819 | ||||
res7 | 0.839 | ||||
res8 | 0.770 | ||||
res9 | 0.802 | ||||
Operational Performance | opp1 | 0.775 | 0.643 | 0.915 | 0.888 |
opp2 | 0.808 | ||||
opp3 | 0.871 | ||||
opp4 | 0.788 | ||||
opp5 | 0.811 | ||||
opp6 | 0.751 |
Construct | Items | 2nd Order Factor Loading | Construct | Items | 1st Order Factor Loading |
---|---|---|---|---|---|
Sensing | sen1 | 0.813 | Digital Transformation Capability | sen1 | 0.650 |
sen2 | 0.834 | sen2 | 0.771 | ||
sen3 | 0.813 | sen3 | 0.733 | ||
sen4 | 0.797 | sen4 | 0.687 | ||
sen7 | 0.841 | sen7 | 0.711 | ||
sen8 | 0.745 | sen8 | 0.638 | ||
Organizing | org1 | 0.787 | org1 | 0.699 | |
org2 | 0.864 | org2 | 0.770 | ||
org3 | 0.804 | org3 | 0.728 | ||
org6 | 0.814 | org6 | 0.770 | ||
org7 | 0.761 | org7 | 0.700 | ||
org8 | 0.795 | org8 | 0.733 | ||
Restructuring | res2 | 0.820 | res2 | 0.751 | |
res3 | 0.843 | res3 | 0.738 | ||
res6 | 0.819 | res6 | 0.749 | ||
res7 | 0.839 | res7 | 0.734 | ||
res8 | 0.770 | res8 | 0.622 | ||
res9 | 0.802 | res9 | 0.720 |
CUO | TO | SEN | ORG | RES | OPP | |
---|---|---|---|---|---|---|
CUO | 0.842 | |||||
TO | 0.658 | 0.840 | ||||
SEN | 0.667 | 0.659 | 0.808 | |||
ORG | 0.682 | 0.701 | 0.697 | 0.805 | ||
RES | 0.604 | 0.606 | 0.622 | 0.729 | 0.816 | |
OPP | 0.597 | 0.498 | 0.649 | 0.658 | 0.707 | 0.802 |
Hypothesis | Path | Coefficient | p | T | Result |
---|---|---|---|---|---|
H1 (+) | Customer Orientation→Digital Transformation Capability | 0.437 | 0.000 *** | 7.925 | Supported |
H2 (+) | Technology Orientation→Digital Transformation Capability | 0.451 | 0.000 *** | 9.652 | Supported |
H3 (+) | Digital Transformation Capability→Operational Performance | 0.757 | 0.000 *** | 15.692 | Supported |
Path | Direct Effect | Indirect Effect | Total Effect | VAF | Mediation Type Observed | |
---|---|---|---|---|---|---|
1 | Customer Orientation→Digital Transformation Capability→Operational Performance | 0.437 (7.925) | 0.330 (6.485) | 0.767 | 43.02% | Partial Mediation |
2 | Technology Orientation→Digital Transformation Capability→Operational Performance | 0.451 (9.652) | 0.342 (8.051) | 0.793 | 43.13% | Partial Mediation |
Hypothesis | Path | Coefficient | p | T | Result |
---|---|---|---|---|---|
H1 (+) | Customer Orientation→Digital Transformation Capability | 0.437 | *** | 7.925 | Supported |
H1a (+) | Customer Orientation→Sensing | 0.415 | *** | 6.034 | Supported |
H1b (+) | Customer Orientation→Organizing | 0.265 | ** | 3.426 | Supported |
H1c (+) | Customer Orientation→Restructuring | 0.152 | * | 2.004 | Supported |
H2 (+) | Technology Orientation→Digital Transformation Capability | 0.451 | *** | 9.652 | Supported |
H2a (+) | Technology Orientation→Sensing | 0.386 | *** | 6.945 | Supported |
H2b (+) | Technology Orientation→Organizing | 0.331 | *** | 5.039 | Supported |
H2c (+) | Technology Orientation→Restructuring | 0.130 | n.s. | 1.769 | Rejected |
H3 (+) | Digital Transformation Capability→Operational Performance | 0.757 | *** | 15.692 | Supported |
H3a (+) | Sensing→Operational Performance | 0.278 | *** | 3.677 | Supported |
H3b (+) | Organizing→Operational Performance | 0.157 | ** | 2.027 | Supported |
H3c (+) | Restructuring→Operational Performance | 0.420 | *** | 4.888 | Supported |
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Yu, J.; Wang, J.; Moon, T. Influence of Digital Transformation Capability on Operational Performance. Sustainability 2022, 14, 7909. https://doi.org/10.3390/su14137909
Yu J, Wang J, Moon T. Influence of Digital Transformation Capability on Operational Performance. Sustainability. 2022; 14(13):7909. https://doi.org/10.3390/su14137909
Chicago/Turabian StyleYu, Jiatong, Jiajue Wang, and Taesoo Moon. 2022. "Influence of Digital Transformation Capability on Operational Performance" Sustainability 14, no. 13: 7909. https://doi.org/10.3390/su14137909