What Is Necessary for Digital Transformation of Large Manufacturing Companies? A Necessary Condition Analysis

Abstract

Digital transformation is of significant importance to the sustainable development of manufacturing companies and the construction of the digital economy. However, this major change is often hindered by numerous complex antecedents. What are the key factors in the digital transformation of manufacturing companies, and what is their relative importance? Accordingly, this paper identifies the key factors for digital transformation in large manufacturing companies from the “Ability–Motivation–Opportunity” (AMO) perspective. This study uses a necessary condition analysis (NCA) to conduct a necessity causality study on data collected from 67 listed Chinese manufacturing companies between 2016 and 2020. The results show that the digital transformation of large manufacturing companies is influenced by four necessary conditions: managerial myopia, industry concentration (very large effect), dynamic capabilities, and industrial digitalization (large effect). Managerial myopia and industry concentration have a negative necessary impact on digital transformation. The types of conditions and the level of bottlenecks required at different stages of digital transformation vary significantly. This study reveals the necessary causal relationships between organizational abilities, motivation, external opportunities, and digital transformation, providing empirical evidence to promote the digital transformation practices of manufacturing companies.