Digital strategy for firm performance- mediating role of digital platform capabilities and digital culture in manufacturing SMEs

Abstract

ABSTRACT Manufacturing businesses worldwide increasingly strive to devise and implement strategies to succeed in digital transformation and improve their performance by developing digital capabilities and competencies. We argue that this process should incorporate a culture and dynamic capabilities that support this transformation. In this vein, we propose and test a model explaining the impact of digital strategy on firm performance and the mediation mechanisms of digital platform capabilities and digital culture in this relationship. Our analysis of time-lagged data, gathered from middle and top managers of small and medium-sized manufacturing enterprises (SMEs), affirms our initial hypotheses: digital strategy positively influences firm performance, and digital platform capabilities and organisational culture mediate this relationship. Our study carries significant implications for manufacturing SMEs, particularly those in developing countries, as it underscores the pivotal role of digital platform capabilities and cultural factors in leveraging digital strategies for competitive advantage.