Business Strategy and Digital Transformation Strategy

PurposeThe purpose of this study is to verify whether digital transformation strategy (DTS) could improve the organizational performance and provide a comprehensive analysis for enterprises on the necessity of implementing digital transformation in the context of China and draw on the perspectives of “Skewed conflict,” “minority dissent theory” and “too-much-of-a-good-thing.” This study investigates the curvilinear moderating role of cognitive conflict between DTS and performance.Design/methodology/approachAn empirical investigation was used to collect a large sample data of Chinese enterprises’ digital transformation. A multiple linear regression analysis with SPSS was used to test the proposed hypotheses such as the inverted U-shaped moderating effect of the cognitive conflict.FindingsIn the Chinese context, DTS has a positive relationship on the short- and long-term financial performance. Moreover, this relationship was moderated by cognitive conflict such that the relationship between DTS and short-term financial performance could be further enhanced under the moderate cognitive conflict; however, the relationship between DTS and long-term financial performance was considerably influenced for higher cognitive conflict.Originality/valueBased on the co-evolution of the information technology/information system (IT/IS) and business strategy, this study clarified the relationships among DTS, digital strategy and business and information technology strategies. By focusing on corporate strategy, this study further examined the effect of digital transformation on both short- and long-term financial performance. To further reveal the micro-psychological mechanisms underlying the effect of DTS on organizational performance, this study confirmed the inverted U-shaped moderating effect of the top management team’s cognitive conflict. Therefore, this research provides a new theoretical perspective for future research in the field of IT/IS, DTS and digital strategy.

Digital transformation has become a strategic priority for the enterprises, the public organizations, and the cities. However, it remains unanswered whether business and city digital transformation strategies emerged mainly during the Covid-19 pandemic or independently while it is questioned whether organizations and cities that prioritized digital transformation before the epidemic had updated their strategies to deal with the outbreak. The main objective of this paper is to investigate the types of emergent digital transformation strategies that were caused both to the local business ecosystems and to cities due to the pandemic. This study uses a multi-method approach, including bibliometric analyses of more than 30,000 records that were produced during the outbreak to determine the effects of Covid-19 pandemic on the business and city digital transformation strategies. Findings uncover the digital transformation emergent strategic changes and highlight important trends, like the migration of the production supply chains with digital transformation. Moreover, this article uses the case study method on the European Intelligent Cities Challenge initiative, via analyzing the digital transformation strategies of the 120 participating cities, which had defined their digital transformation strategic priorities before the outbreak. The analysis shows that the pandemic did not significantly caused emergent digital transformation strategies. In general, this article’s findings do not prove a causal relationship between the pandemic and city/organization digital transformation strategies but provide some useful evidence about the emergent strategic responses that are triggered by crises like the epidemic. Background: This article explores the emergence and updates of digital transformation strategies (emergent digital transformation strategies) of businesses and cities due to the covid-19 outbreak. Methods: A multi-method research methodology was followed: bibliometric analyses of more than 30,000 records and the in-depth analysis of the most cited articles of them (more than 50) that were published during the outbreak (not after its completion) and on the case study of the large-scale European intiative of Intelligence Cities Challenge (ICC) (more than 120 cities in Europe). Results: (a) In terms of business emergent digital transformation strategies: (1) the enterprises adopted agile marketing techniques for their entrance to new digital markets and for the development of new digital products; (2) the enterprises prioritized digital transformation and the definition of sustainable business models; (3) the enterprises adopted emerging ICT (i.e., AI, bigdata and analytics) to measure organizational performance and predict market demands; (4) the enterprises moved their production lines closer to their suppliers and customers. (b) in terms of city emergent digital transformation strategies: (1) cities are being transformed to smart service providers and generate new types of digital values, via digital platforms and service co-creation with their citizens; (2) cities utilized their digital assets to share knowledge with innovation producers, they focused on their communities’ digital upskilling, while they adopted emerging ICT (i.e., AI, big data and IoT) to enhance their utility services; (3) cities recognized the importance of their digital transformation for enhancing their resilience and they rapidly trusted the ICT and encouraged the development of ethical ecosystems; (4) the evidence from the ICC showed that only the 65.5 (80 out of the 122 cities) percent of the participating cities managed to define their DT strategies, none revised its strategic objectives in the face of the pandemic, while only the 15 percent of them (12 out of the 80 cities) prioritized objectives relative to the pandemic or launched corresponding initiatives; (5) some ICT-based measures that the cities undertook to deal with the pandemic were uncovered with the ICC (i.e., digital surveillance, smart tourism etc.). Conclusions: The above results show how the businesses and the city governments responded with emergent digital transformation strategies to the Covid-19 pandemic, beyond dealing this liquidity issues and gaining access to government funds. These outcomes can be utilized for future estimations about business and city responses to crises like the outbreak, while future thoughts concern comparing these results with evidence from post-pandemic analyses.

Under the digital transformation strategy, whether the overseas investment activities of firms can achieve reverse green spillover is significant to their implementation of green and low‐carbon transformation. Accordingly, we examined the impact of outward foreign direct investment (OFDI) on green technology innovation (GTI) in parent firms under the digital transformation strategy at the micro‐level using a zero‐inflated negative binomial regression (ZINB) model with data from Chinese A‐share listed firms for 2000–2021. The study shows that (1) OFDI is beneficial to the growth of the parent firm's GTI. The results of both the instrumental variables approach and robustness tests support the baseline findings. (2) The scale, competitive, and human capital effects are the three micro‐mechanisms through which OFDI drives GTI. (3) Digital transformation has a positive moderating effect on OFDI and GTI, implying that digital transformation reinforces the reverse green spillover effect of OFDI. (4) The results of heterogeneity analysis show that state‐owned firms and firms with overseas executives have a more outstanding contribution of OFDI to GTI, and the moderating effect of digital transformation is more significant. This study provides micro‐level theoretical and empirical experiences on the green innovation effects of firms' digital transformation and overseas investment strategies.

Aim. The work aimed to determine the directions of Russia’s development based on the analysis of the evolution of the digital business strategy of the organization to ensure competitiveness in the context of achieving its technological and economic sovereignty.Objectives. The work seeks to conduct a comprehensive analysis and identify the dynamics of the development of the business strategy in the context of managing an organization using information technology (IT); determine the role of IT as a key factor in improving the efficiency and quality of management information, as well as coordinating business processes in order to strengthen the competitive advantages of organizations to ensure the economic sovereignty of Russia in modern dynamic markets; propose a digital transformation strategy focused on using the opportunities of the digital economy.Methods. The study employed a systems approach and was based on the analysis of publications of Russian and international authors, posted in scientific electronic libraries, as well as available information from analytical and consulting companies that are experts and practitioners in IT and business consulting.Results. The obtained analysis results revealed that the active use of IT as part of a business strategy provides significant competitive advantages to a company. Further steps aimed at the transition to a digital business strategy and then a digital transformation strategy further strengthen these positions and provide a basis for ensuring the technological and economic sovereignty of the country.Conclusions. The study confirms the significant influence of IT on business strategy. The analysis showed the evolution of IT business goals, from efficiency in the 1960s to increasing competitiveness in the 1980s; a shift in focus from saving resources to increasing operational efficiency and strategic differentiation; the importance of strategic alignment of business and IT strategies to implement the value of investments in technology; the need to align business and IT for a competitive advantage of organizations in changing markets; the impact of digital technologies on external, internal and general business functions; changing organizational strategy through the creation of digital value; business transformation due to a digital strategy stimulating the growth of products and services; focus on digital transformation to use digital resources in operational, customer and model strategies; priority of digital transformation strategy alignment for management; need to integrate IT strategy into business strategy and transition to digital transformation; transition from a business support tool to its core, where digital transformation is a new reality for organizations.

Most organisations have begun to take the phenomenon of digital transformation very seriously and in response, they have adopted a digital transformation strategy (DTS) to guide them on the journey to being digitally transformed. Despite the impetus to adopt a DTS, most organisations lack the understanding of what a DTS entails and the components of such a strategy. In an effort to bring better understanding on the components of a DTS, this study adopted a qualitative research approach and collected research data using an Internet-mediated questionnaire. Our research findings revealed that most organisations have recently adopted a DTS within the last 10 years with the exception of a few. Furthermore, our research findings reveal that a DTS must incorporate the following components, digitisation of the customer experience, digitisation of products and services, digitisation employee ways of working and digitisation of business processes. Our findings also revealed that a DTS leverages digital technologies enabling the organisation to compete, innovate, grow and achieve its business strategy. These results have implications for academics; our study adds to the digital transformation body of knowledge and specifically the components of a DTS. We also propose a definition of a DTS based on our findings of DTS components. For practitioners, managers formulating and refining their DTS can use the DTS components as a benchmark of what to incorporate in their DTS.

Digital transformation has the potential to fundamentally change companies and create value. This study examines the impact of digital transformation and sustainability strategies on the earnings quality of Indonesian listed companies on three sectors: infrastructures, transportation and logistics, and consumer non-cyclicals. Using text mining techniques to measure intensity of digital transformation and sustainability strategies, we found that sustainability strategy shown in the company’s annual report reflects lower level of earnings management especially in accrual earnings management, while companies with digital transformation strategy, particularly in artificial intelligence technology, are less likely to engage real earnings management. Findings of this study provide insights into the effect of digital transformation and sustainability on the quality of accounting information and corporate governance, and offer implications for corporate digital transformation and government regulation.

“Better together”: Right blend of business strategy and digital transformation strategies

PurposeThis study aims to examine the mediating role of innovation capability in the relationship between digital transformation strategy and innovation performance of microfinance institutions in Ethiopia.Design/methodology/approachSurvey data were collected from 12 microfinance institutions in Ethiopia through self-administered questionnaires. Statistical analysis was conducted using structural equation modeling with AMOS and SPSS. Covariance-based structural equation modeling was used to test the study hypotheses.FindingsDigital transformation strategy indicators such as (digitization vision, information technology integration, information technology agility and flexibility of information technology) directly affect innovation performance. The innovation capability mediates the relationship between digital transformation strategy indicator (information technology agility) and innovation performance. However, innovation capability does not have mediation effect in the relationship between digital transformation strategy remaining indicators (digitization vision, information technology flexibility and information technology integration) and innovation performance.Originality/valueThe study affirmed the importance of dynamic capability theory and presents noteworthy conclusions applicable to managers, stakeholders, and policymakers. It illuminates how innovation capability serves as a crucial link between digital transformation strategies and innovation performance within microfinance institutions in Ethiopia. This research enhances the current understanding of innovation capability, digital transformation strategy and innovation performance in the literature.

Aims: The increment of Indonesian higher education institutions has intensified competition,. After the global pandemic created pressure to accelerate digital transformation, changes in the global economy have also triggered some institutions to prioritize the high quality of service for their clients.
 The aims of this to investigate the moderating effect of a digital transformation strategy on the relationship between intellectual capital and competitive advantage in private universities in South Sumatra. Indeed, intellectual capital is generally an essential aspect and one of the most conducive to innovative and unrestrained competition.
 Study Design: Explanatory Study.
 Place and Duration of Study: Sample: 300 respondents from ten private universities took part in the survey in April 2022 to June 2022.
 Methodology: The respondents from ten selecting private universities implementing the digital transformation strategy. Using the quantitative and Partial Least Square (PLS) to analyze the data and test the hypotheses.
 Results: Digital Transformation Strategy (DTS) significantly impacts the competitive advantage of private universities in South Sumatra. The results mean that the higher the digital transformation strategy, the higher the competitive advantage. Digital transformation strategy as the moderator to significantly increase the effect of intellectual capital on competitive advantage.
 Conclusion: The variable of intellectual capital significantly affects the competitive advantage of private universities in South Sumatra. This result means that the higher the intellectual capital with the dimensions of human capital, organizational capital and relationship capital (collaboration), the higher the competitive advantage. Furthermore, Digital transformation strategies have a quasi-moderating role (Quasi Moderator). It means the higher the digital transformation strategy, the higher the competitive advantage. The digital transformation strategy is to significantly increase the effect of intellectual capital on competitive advantage.

Digital transformation strategies and organizational performance are intricately linked in modern business environments, particularly in industries that are heavily reliant on technology, such as banking. Digital transformation strategies are designed to enhance efficiency, customer satisfaction, and overall competitiveness transformation has the potential to influence several key aspects of organizational performance, including operational efficiency and customer satisfaction. Family Bank Limited has made significant investments in digital banking solutions. However, there are growing concerns regarding the effectiveness of these digital strategies in enhancing organizational performance. Despite the widespread adoption of mobile banking, internet banking, and digital payment platforms, questions remain about the extent to which these innovations improve operational efficiency and customer satisfaction across the banking industry This study sought to examine the effect of digital transformation strategies on the organizational performance of Family Bank Limited, Kenya. The investigation was a case study and employed the qualitative research design. Qualitative data was gathered using interview guides from heads of different departments at Family Bank. Qualitative data was analyzed using content analysis. The study found that digital transformation strategies have significantly contributed to performance at Family bank. The findings revealed that the bank has adopted various digital transformation tools and platforms such as online banking, mobile banking, paperless banking and investment in software for security surveillance among other which has yielded significant cost reductions, faster transaction processing and enhanced service delivery. The findings further revealed that digital transformation has contributed to enhanced customer experience at family bank by enabling the bank to offer seamless and better services at lower fees and meeting various customer touch points. Digital platforms have also been used to showcase various product offering creating a pool of alternatives for customers. Additionally, digital transformation in the bank was driven by factors such as the necessity to conform to change happening in the industry, customer demands and availability of skilled personnel. Nonetheless, the digital transformation journey was confronted by challenges such as heavy investment required to transition to new systems and technologies, resistance to change and data security concerns. The recommendations include the allocation of adequate resources for digital transformation processes, undertaking of adequate market research before adopting new technologies and emulating best practices from well performing banks with respect to digital transformation across the globe. Keywords: Digital Transformation Strategies, Organizational Performance DOI : 10.7176/EJBM/17-1-01 Publication date : January 30th 2025

PurposeIn the context of the digital economy, information technology (IT) investment has become a necessary way for enterprises to transform digitally. However, why and how IT investment can enhance digital transformation is lacking in the literature. Based on the resource-based view (RBV), this study explored the impact mechanism of IT infrastructure on the digital transformation of enterprises from the perspective of the digital transformation strategy. Further, this study examined the moderating role of top management on the relationships between IT infrastructure and digital transformation strategy and between digital transformation strategy and enterprise's digital transformation.Design/methodology/approachThrough a questionnaire survey of Chinese enterprises, 180 sample data were collected, and the partial least squares-structural equation modeling (PLS-SEM) method was used to test the hypothesis.FindingsDigital transformation strategy fully mediates the relationship between IT infrastructure and enterprise digital transformation. Furthermore, top management has a significant positive moderating effect on the relationship between IT infrastructure and digital transformation strategy, as well as the relationship between digital transformation strategy and digital transformation.Originality/valueThis study explores the moderating role of top management in the relationship between IT and enterprise performance, as well as the mediating role of digital transformation strategy in the relationship between IT infrastructure investment and digital transformation performance. As a result, the study adds significantly to the body of knowledge on IT business value, digital transformation and strategic management. The authors' findings can help update managers' perceptions of IT value and provide theoretical guidance on deriving digital transformation performance from IT infrastructure investments.

In recent years, firms in almost all industries have conducted a number of initiatives to explore new digital technologies and to exploit their benefits. This frequently involves transformations of key business operations and affects products and processes, as well as organizational structures and management concepts. Companies need to establish management practices to govern these complex transformations. An important approach is to formulate a digital transformation strategy that serves as a central concept to integrate the entire coordination, prioritization, and implementation of digital transformations within a firm. The exploitation and integration of digital technologies often affect large parts of companies and even go beyond their borders, by impacting products, business processes, sales channels, and supply chains. Potential benefits of digitization are manifold and include increases in sales or productivity, innovations in value creation, as well as novel forms of interaction with customers, among others. As a result, entire business models can be reshaped or replaced (Downes and Nunes 2013). Owing to this wide scope and the far-reaching consequences, digital transformation strategies seek to coordinate and prioritize the many independent threads of digital transformation. To account for their company-spanning characteristics, digital transformation strategies cut across other business strategies and should be aligned with them (Fig. 1). While there are various concepts of IT strategies (Teubner 2013), these mostly define the current and the future operational activities, the necessary application systems and infrastructures, and the adequate organizational and financial framework for providing IT to carry out business operations within a company. Hence, IT strategies usually focus on the management of the IT infrastructure within a firm, with rather limited impact on driving innovations in business development. To some degree, this restricts the product-centric and customer-centric opportunities that arise from new digital technologies, which often cross firms’ borders. Further, IT strategies present systemcentric road maps to the future uses of technologies in a firm, but they do not necessarily account for the transformation of products, processes, and structural aspects that go along with the integration of technologies. Digital transformation strategies take on a different perspective and pursue different goals. Coming from a business-centric perspective, these strategies focus on the transformation of products, processes, and organizational aspects owing to new technologies. Their scope is more broadly designed and explicitly includes digital activities at the interface with or fully on the side of customers, such as Accepted after one revision by Prof. Dr. Sinz.

To take advantage of information technologies, organizations need to define a clear strategy. Numerous works have provided definitions and phases of digital strategies. Some of these strategies are context-specific, while others deal with the common elements of digital strategies regardless of the digital transformation context. However, these works do not address a holistic approach. This raises ambiguity regarding digital strategy definitions and approaches. To eliminate this ambiguity, the current research tries to take advantage of existing digital strategies to propose a general digital strategy definition and build a general digital transformation approach. This work analyses various digital transformation strategies, to extract and classify their common elements in order to build a general approach that frame and drive the formulation of digital transformation strategies. To define such a general approach, the current paper analyses the effects of IT Governance and Management Strategy on the Digital Transformation Maturity. This analysis identified how IT Governance and Management Strategy can contribute to formulating a digital transformation strategy. Partial Least Square (PLS) was adopted in this research to develop an empirical evaluation for the case of 30 digital strategies and frameworks. Based on this empirical study several results have been presented in this work, namely: determination of a digital strategy definition and identification of a digital strategy approach. The proposed approach is composed of the following building blocks: Strategic Awareness, Business Strategic Planning, IT Organizational Structure, Steering committee, IT Prioritization Process, IT Investment Decisions, IT Strategic Planning, IT Budgeting, IT Reporting, IT Reaction Capacity and Management Strategy.

In the era of the digital economy, digital technology brings new opportunities for enterprises’ development. The degree of enterprises’ digital transformation determines their development level and potential. At present, China’s “double carbon” policy is having a profound impact on the industry. The relationship between digital transformation strategy and environmental, social, and governance (ESG) performance is analyzed based on the digitalization and sustainable development goals of enterprises, and on the basis of positioning enterprise digital transformation level through the strategic alignment model (SAM). Data are collected by questionnaire survey from 224 large manufacturing enterprises in China as a sample for empirical testing by the hierarchical regression method. The empirical results show the following. (1) Digital transformation strategy has a direct positive and significant impact on enterprise ESG performance. Specifically, it is reflected in the two dimensions of digital transformation strategy, namely business digitalization and platform digitalization, which have a significant direct positive impact on enterprise ESG performance. (2) Enterprise green innovation plays a significant intermediate role in promoting the relationship between digital transformation strategy and enterprise ESG performance. (3) The two dimensions of green innovation, namely green process innovation and green product innovation, both play a partial mediating role in promoting business digitalization and platform digitalization development level to enterprise ESG performance, respectively. It can be concluded that business digitalization and platform digitalization can improve enterprise ESG performance by promoting green process innovation and green product innovation. Therefore, enterprises should clarify the direction of development of their digital transformation strategy, emphasize green innovation, and continuously improve their ESG performance to create favorable conditions for achieving sustainable development.

Research Question/IssueWe investigate the influence of non‐family shareholder governance on Chinese family firms' digital transformation strategies.Research Findings/InsightsWe use the socioemotional wealth theory to examine the impact of non‐family shareholder governance on family firms' digital transformation. We find that the influence of non‐family shareholder governance by appointing directors can significantly promote the implementation of digital transformation strategies through their capital and human effects in family firms. In contrast, non‐family shareholders only play a positive role in family firms' digital transformation when they are blockholders. In addition, non‐family shareholder governance plays a significant role in promoting the digital transformation of family firms with entrepreneurship and a high degree of industry competition. Regarding external digital development, the Broadband China policy complements family firms' digital transformation strategies. The characteristics of the appointed directors suggest that the introduction of appointed directors, an excess of appointed directors, and the inclusion of appointed directors with digital expertise can effectively promote the digital transformation of family firms. The characteristics of controlling families show that socioemotional wealth can further optimize the relationship between non‐family shareholder governance and digital transformation.Theoretical/Academic ImplicationsWe not only verify the rationality and effectiveness of non‐family shareholder governance in combination with digital transformation strategies but also further observe the impact of the heterogeneity of directors appointed by non‐family shareholders on family firms' digital transformation strategies. Thus, our study tests the influence of non‐family shareholder governance on digital transformation and enriches the literature on non‐family shareholder governance and family firms' strategies.Practitioner/Policy ImplicationsThis study offers insights to family firms regarding how to effectively promote non‐family shareholders' participation in corporate governance and help family firms to achieve the goal of “everlasting foundation.”