Exploring the Influence of Exploitative and Explorative Digital Transformation on Organization Flexibility and Competitiveness

Abstract

Digital transformation processes help integrate digital technologies across all the departments of organizations, as well as to adopt digital technology rapidly in an organization. Enhanced organizational innovativeness, efficiency, and competitiveness might be among the outcomes of digital transformation. While digital transformation could be exploitative and explorative in nature, how such a transformation could impact the flexibility and competitiveness of organizations has not been extensively investigated. Against this backdrop, the main objective of this article is to investigate the influence of exploitative as well as explorative digital transformation on organization flexibility and competitiveness. Building on existing theories and literature, a research model is developed that was later tested using a covariance-based structural equation modeling approach applied to the responses of 312 managers from Indian organizations, which are in the process of pursuing digital transformation or have already adopted digital technologies in different departments. This article found that digital transformation helps organizations to become more flexible and it eventually improves the competitiveness of the organizations.