In the digital era, the development of virtual agglomeration has enabled enterprises to become organizations that are not constrained by geographic boundaries, characterized by integration and synergy. While as data becomes a new production factor, organizations need to develop digitalization capabilities to harness the value of data elements, improve the level of synergy and operational efficiency, and adapt to the development trend of virtual agglomeration.This adaptation is essential for securing new spaces for growth and gaining competitive advantages. Against this backdrop, this study analyzes digitalization capabilities from the perspective of virtual agglomeration, including the formation, structure, and influence of digitalization capabilities in order to provide a systematic research model.
Firstly, this study defines the concept of organizational digitalization capability from the perspective of virtual agglomeration. Most of the research on digitalization capability in the literature focus on individual organizations at the micro level, and it is less likely to put digitalization capability into the organization's virtual agglomeration to study, and it has not formed a systematic system. This research defines digitalization capability as an organizational capability system that emerges from the application of digital technology to integrate the internal and external capabilities of an organization and create value. The aim is to optimize business synergy and resource sharing of interenterprise and obtain the scale effects of resources that virtual agglomeration can provide.
Secondly, this study discusses how organizations within virtual agglomerations form digitalization capabilities and what conditions and mechanisms are involved in their development. Considering the characteristics of virtualization and agglomeration, the analysis of digitalization capability formation is categorized based on virtual and agglomeration orientations. On the virtual orientation side, effectively linking organizations across different geographic spaces to achieve agglomeration requires the use of digital technology; the abundance of resources can exponentially enhance organizational capabilities in the virtual space; virtualization has led to a fragmented marketplace, necessitating that organizations strengthen their ability to adapt to market changes. Thus, the conditions for the formation of digitalization capabilities are driven by technology, resource, and market.On the agglomeration orientation side, inter-organizational links are needed to form agglomerations, and an efficient link is a fundamental requirement for the formation of digitalization capabilities; advantaged organizations can assist disadvantaged organizations by coordinating agglomeration activities to promote this capability; inter-organizational cultural distance makes cooperation unstable, and there is a need to build a culture of agglomeration and enhance trust. Therefore, the conditions for the formation of digitalization capabilities includes linkage, empowerment, and cultural factors.
Next, it explores and analyzes the structure of organizational digitalization capability in virtual agglomeration, and reviews the development of measurement methods. Because of the different research contexts and target objects, the structure of digitalization capabilities is divided into different levels. Virtual agglomeration emphasizes the interconnection between organizations, and these organizations formed can be conceptualized as a network organization composed of nodes and links, and the measurement of digitalization capabilities should focus on these two aspects. Additionally, considering integration, platform, and smart attributes is crucial. This study outlines key digitalization capability measurement approaches: using established scales for preliminary assessment, identifying substitute objective indicators, and employing grounded theory methods. However, these measurement methods are not accurate,highlighting a need for innovative measurement techniques tailored to virtual agglomeration contexts.
Finally, the influence of digitalization capabilities on organizations and the mechanisms of action are summarized. This study concludes that the direct influence of digitalization capability on agglomeration is manifested in agglomeration upgrading. Specifically, the influence of digitalization capability on agglomeration upgrading is reflected in the products, processes, and models. In addition, the analysis of the influence mechanism process shows that the agglomeration environment plays a moderating mechanism in the aftereffect of digitalization capability on agglomeration; while the dynamic capability plays a mediating mechanism in the after-effect of digitalization capability on agglomeration. This study broadens the theoretical framework for understanding organizational digitalization capabilities. It offers a more nuanced comprehension of the development, composition, and post-implementation dynamics of digitalization capabilities. Furthermore, it furnishes novel research insights and directions, enhancing the execution of digitalization capability initiatives within virtual agglomeration.