Digital transforming capability and performance: a microfoundational perspective
International Journal of Operations & Production Management
ISSN: 0144-3577
Article publication date: 29 May 2020
Issue publication date: 20 November 2020
Abstract
Purpose
Drawing on the literature on dynamic capabilities and digital transformation, this paper conceptualises and investigates the relevant antecedents of an essential capability for digital transformation – the digital transforming capability – and its effect on the competitive advantage of firms.
Design/methodology/approach
A framework with individual and organisational microfoundations of the digital transforming capability is proposed based on previous research. The digital transforming capability is conceptualised as a second-order construct. The model is tested using data from a broad spectrum of large US companies. Structural equation modelling (SEM) is applied to test the proposed framework.
Findings
The study identifies three main microfoundations that, when combined, build a digital transforming capability (digital-savvy skills, digital intensity and context for action and interaction); in addition, the study tests the relationship between digital transforming capability and firm performance. The results validate the proposed theoretical framework. In addition to proposing relevant microfoundations of the digital transforming capability, we advance knowledge on the performance effects of those microfoundations.
Originality/value
The paper contributes to advancing the understanding of the digital transformation phenomenon by revealing the role of the primary components underlying the digital transforming capability. Yet the mechanisms by which the micro-level aspects are important for digital transformation and organisational outcomes are only suggested by anecdotal evidence. The paper also contributes to ongoing calls for further investigation to extend the understanding of the microfoundations of dynamic capabilities. Finally, by drawing on archival data, this study also contributes to calls to broaden the toolkit used in dynamic capabilities research.
Keywords
Acknowledgements
The authors thank the Brazilian research agency Coordination for the Improvement of Higher Level Education Personnel (CAPES) (Grant 88881.128754/2016-01), the Schlumberger Foundation and the Centre for Digital Built Britain (CDBB), University of Cambridge, for their support of this research project. The authors also acknowledge the editor Professor Constantin Blome and the reviewers for their valuable comments and recommendations.
Citation
Sousa-Zomer, T.T., Neely, A. and Martinez, V. (2020), "Digital transforming capability and performance: a microfoundational perspective", International Journal of Operations & Production Management, Vol. 40 No. 7/8, pp. 1095-1128. https://doi.org/10.1108/IJOPM-06-2019-0444
Publisher
:Emerald Publishing Limited
Copyright © 2020, Emerald Publishing Limited