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Enterprise Digital Transformation, Employees' Digital Cognition and Innovation Performance: Is Technology the Knife,While I am the Lamb to Slaughter? |
Ma Jun,Guo Mingjie |
(School of Management, Shanghai University, Shanghai 200444, China ) |
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Abstract Because of the developing digital economy and the impact of the COVID-19 pandemic, the information and communication technologies play an increasingly prominent role in enterprise innovation, such as big data, cloud computing, artificial intelligence and Internet of Things. Digital transformation(DT) has become a strategic adjustment direction for enterprises to improve innovation performance and reduce costs and optimize services. But some enterprises undergoing DT find it difficult to give full play to the potential advantages of digital economy due to obstacles such as weak transformation ability, high transformation cost and long performance improvement cycle. They meet with problems of poor performance in the early stage of DT or weak improvement in the later stage. This is also called the DT paradox which is similar to the IT productivity paradox and the new digital economy paradox. According to the digitalization practices of global enterprises, the DT paradox can be summarized into three cases: (1)DT cannot improve enterprise performance; (2)it is conducive to performance improvement in the early stage, but its effect is not obvious or even negative in the later stage; (3)DT does not improve enterprise performance at the beginning, but it is good for improving performance after its downturn. The third case is most popular in China, namely the downturn of digital transformation. So how to resolve the DT paradox and tide over the downturn has become a major issue. However, the existing studies about digital innovation cannot yet elaborate on the role of employees' cognition in the process by which new technologies affect innovation output. It is difficult for researchers to systematically explain the causes and countermeasures of DT paradox. Hence, guided by the IT capability theory, social cognitive theory and social identity theory, this paper aims to clarify the relationship between DT and enterprise innovation performance from the perspective of employees' digital cognition.#br#This paper obtains 8 785 unbalanced panel data of 1 403 listed companies by screening all Chinese A-share listed companies from 2011 to 2020. The nonlinear effect of DT on innovation performance is tested by using the two-way fixed-effect model and a series of robustness tests are conducted by changing the measurement method of variables, adjusting the sample range, and using instrumental variable analysis. Then the effect of employees' digital cognition is tested, and the effect is the abbreviation of employees' cognition of the results of DT on nonlinear relations. Employees' digital cognition generally includes employees' cognition of whether DT improves their own interests or organizational performance, and it is characterized by employees' personal digital cognition(PDC) and organizational digital cognition(ODC). When employees are engaged in the DT, they tend to form a comparative cognition by comparing their corporate performance with other enterprises in their daily work or network interactions,and then this cognition may influence their behavior and performance. The moderating effect of ODC is tested by introducing interaction terms between DT and ODC.#br#The results show that there is a U-shaped relationship between DT and innovation performance. Namely, there is a downturn in the DT process of enterprises. The turning point from decline to rise is about 0.7 million yuan for those companies with non-zero DT assets. It is shown that PDC plays a partial mediating role in U-shaped relationship and ODC moderates the U-shaped relationship. PDC does play a mediating role in the latter stage, but not in the first stage. ODC can result in the turning point moving left and make the U-shaped relationship more steep.#br#By integrating the IT capability theory, social cognitive theory and social identity theory , this study analyzes the possible path of enterprise digital innovation from the perspective of employees' digital cognition. It takes the Chinese listed companies as the research object, confirms the existence of U-shaped relationship and reveals the mediating role of PDC and the moderating effect of ODC on the relationship between DT and innovation performance. Enterprises are suggested to optimize employees' digital cognition from PDC and ODC and apply digital technology to create a good employee cognitive climate which is beneficial to organizational innovation.#br#
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Received: 25 May 2022
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