A strategy tripod perspective on digitalization for sustainable development: a case of micro, small, and medium-sized enterprises in Vietnam

Abstract

In the ever-changing global environment, Micro, Small, and Medium Enterprises (MSMEs) face unique and formidable challenges, particularly in the wake of the pandemic. With their dependence on personal interactions and limited resources, along with a lack of digitalization, technology adoption, and online presence, MSMEs are at a high risk of survival. To overcome these operational and supply chain obstacles, MSMEs must embrace digitalization. However, weak institutional foundations, industry-specific issues, and resource-based costs in developing countries, particularly Vietnam, have hindered their adoption. This research study aims to examine the intricate relationship between strategy tripods, digitalization, and firm performance in the context of Vietnamese MSMEs. This study employs structural equation modeling to rigorously test the proposed hypotheses, drawing upon a researcher-designed survey administered to 382 MSMEs. The findings provide valuable insights into the barriers that hinder digitalization adoption in developing countries, emphasizing the crucial roles of government support, knowledge creation and absorption, and competitive intensity. Moreover, the study uncovers the positive impact of firm engagement in digitalization on post-digitalization performance. By contributing to a deeper understanding of the implications of strategy tripods and digitalization for MSME performance in Vietnam, this research offers actionable insights for policymakers and facilitates the development of effective training programs tailored towards digitalization, ultimately fostering sustainable outcomes.