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| How Do the Configuration of Digitization and Organization Change Solve the Digital Transformation Paradox of SMEs? |
| Li Liwei,Huang Yihan |
| (School of Management, Beijing Union University, Beijing 100101, China) |
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Abstract Digital transformation has become an inevitable choice for small and medium-sized enterprises. However, in practice, the application of digital technology has not improved the performance of enterprises, resulting in the digital transformation paradox. Whether digital transformation can promote the performance of SMEs depends not only on the application of digital technology but also on the alignment between digital technology and organizational change factors. The alignment between digital technology and organizational change is the key to realizing the value of digital technologies. Although some studies point out that human capital, organizational structure, and other organizational change elements should be paid attention to in the digital transformation process, how to match these organizational change elements with digital technologies to improve the performance of SMEs has not been fully studied.#br#Aiming at the above problems, this paper collects the survey data of 221 small and medium-sized enterprises in China and uses the fuzzy set qualitative comparative analysis method to explore how the configuration of digitization and the five dimensions of organizational change-organization strategy, organization structure, business process, human capital and business model innovation affect the financial performance and innovation performance of SMEs.#br#The results show that digitization and organization change factors drive SMEs' financial performance and innovation performance in different ways. There are two paths for realizing high financial performance and three paths for realizing high innovation performance, and there are one path for leading non-high financial performance and two paths for leading non-high innovation performance. First, a single element such as digitization and organizational change factors is not the necessary condition for SMEs to achieve high digital transformation performance. The digital transformation performance of SMEs is affected by the configuration and synergistic effects of digitization and organizational change. Second, there are two configuration paths for small and medium-sized enterprises to achieve high financial performance: driven by business model innovation in the absence of digital strategies, and driven by collaborative innovation in organizational structure, business processes, and business models in highly digital situations. Third, there are three configuration paths for SMEs to achieve high innovation performance: the first path is to be collaboratively driven by organizational structure, human capital and business process change; the second is to be driven by human capital with digital strategy; and the third is to be synergistically driven by business process, business model and organizational structure with a high degree of digitization. Fourth, there is one configuration path of non-high financial performance and two configuration paths of non-high innovation performance in digital transformation. Business model innovation and organizational structure change are the core conditions in these three configurations. Fifth, the impact mechanisms of digitization and organizational change on corporate financial performance and innovation performance have both similarities and differences. From the perspective of similarity, the matching between digitization and organizational structure plays an important role in improving the financial performance and innovation performance; from the perspective of differences, the matching of digitization and business processes plays a synergistic role in improving the financial performance, while the matching of digitization and human capital plays a synergistic role in improving the innovation performance.#br#In summary, this paper adopts the configuration method to confirm the complex influence mechanism of different dimensions of digitization and organizational change on enterprise performance, and expands the research on the complementary and matching mechanism between information technology and organizational change; moreover, it integrates the financial performance and innovation performance of digital transformation into the research framework, and enriches the research on the relationship between digital transformation and enterprise's performance; by confirming that the antecedent configuration of high and non-high transformation performance is asymmetrical, the study deepens the theoretical understanding on the mechanism of digital transformation paradox.#br#These research conclusions provide new insights for explaining the paradox of digital transformation, and valuable enlightenment for small and medium-sized enterprises to realize the alignment and matching between digitization and organizational change. SMEs should attach importance to the alignment of digital technology and elements of different dimensions of organizational change to avoid the paradox of digital transformation and consider the different alignment relationships between digitization and the different dimensions of organizational change.#br#
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Received: 08 May 2023
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