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Empirical studies show digital technologies are crucial for value creation, yet existing literature lacks comprehensive concepts on digital orientation and transformation in organizations. This study integrates a resource-based view with digital orientation literature to introduce a new strategic orientation concept for understanding firms’ attitudes toward digital innovation integration, particularly in emerging economies. Findings reveal that IT infrastructure availability and digital innovation investment significantly drive organizational attitudes, while competencies, management, and knowledge of digital innovation do not, bridging strategy and digital orientation realms and offering valuable insights for SMEs in emerging markets.
Undoubtedly, service-based firms’ performance in the digitalized environment is widely acknowledged, as digital technology evolution streamlines operations and enhances intelligence. However, recent research has highlighted the importance of studying this area, emphasizing the profound impact of technological advances on service provision, delivery, and management. Digitalization not only transforms information sharing and collaboration but also fosters organizational team-building and enhances value creation. Intense competition in various markets has driven widespread adoption of digitalization, with governments implementing strategies to facilitate adoption, particularly among SMEs. Contemporary enterprises increasingly embrace digital orientation for resource management and productivity enhancement, crucial for survival in international markets.
Digital orientation encompasses the integration of technological and business strategies, facilitating organizational learning and information sharing essential for business continuity. Despite the benefits, SMEs face challenges such as resource scarcity, financial constraints, and government policies. These challenges, along with social, market, and organizational drivers, influence firms’ digital orientation. While some scholars underscore the benefits of digital orientation for SMEs, others emphasize the need for conscious behaviors tailored to contemporary market demands, highlighting the importance of resource capacities and strategic orientation.
Given SMEs’ significant contribution to emerging economies, understanding the drivers of digital orientation is crucial. However, empirical studies on this topic are scarce, particularly in the SME context of emerging economies like Ghana. Therefore, this study aims to identify drivers of digital transformation among service-based SMEs and explore how it shapes their operational objectives. By leveraging the resource-based view, the study aims to shed light on how organizations can gain a competitive advantage through digital technologies. The findings are expected to inform SME managers and policymakers, facilitating better integration of digitalization to create a competitive edge while reducing risks and costs associated with the digitalization process.
Digital service innovation represents a transformative approach to technological advancement, particularly beneficial for service-oriented businesses, notably in finance and other sectors. These innovations enhance profit margins, particularly in contexts with prolonged product life cycles, though some firms in developing nations may lack digital orientation due to resource constraints. This study suggests that IT infrastructure availability positively influences managers’ attitudes towards integrating digital innovations in service-based SMEs, echoing previous research emphasizing IT infrastructure’s foundational role in digital operations. Additionally, investment in digital innovation positively impacts managers’ attitudes, reinforcing the importance of financial commitment in fostering proactive approaches. However, while knowledge of digital innovation influences digital innovation management, it does not significantly affect managers’ attitudes toward integration, indicating other influential factors like organizational culture. Furthermore, managers’ IT competence does not directly influence their attitudes, suggesting a complex interplay of organizational elements in driving digital innovation integration. Overall, successful digital transformation requires a holistic approach, incorporating organizational culture, leadership support, and resource availability alongside IT competence.
Service-based firms, to succeed in the global business environment, must adopt behaviors conducive to digital orientation and asset acquisition. Entrepreneurial firms, particularly SMEs, are pivotal in digital innovation, leveraging technologies for value generation and transformation. Incorporating digital innovation capabilities, including Big Data Analytics and IoT, is essential for enhancing decision-making and overall performance. This study enhances understanding of factors hindering digital orientation among SMEs in emerging economies, offering insights for policymakers and managers. By identifying barriers to digital orientation, the research aids in developing strategies for overcoming obstacles and fostering digital adoption. The study employs the Resource-Based View theory to illustrate how firms utilize resources for digital advantage, contributing to theoretical advancements. Practically, findings inform policymakers on crafting supportive initiatives like technical education and digital infrastructure access to aid SMEs. Managers can strategize by fostering innovation, enhancing digital literacy, and forming alliances to overcome obstacles and facilitate digital transformation effectively.
This study explores the factors influencing attitudes toward digital integration in service-based firms in Ghana, focusing on financial and non-financial SMEs due to intense competition amid global economic challenges. It surveyed 472 management staff using convenience sampling and analyzed the data with PLS-SEM. While IT infrastructure and innovation investment positively impacted management attitudes, innovation management, knowledge, and IT competence did not. The findings highlight the importance of digital integration for enhancing profitability and competitive advantage in service-based SMEs.
Source:
Sulemana B. Egala, John Amoah, Abdul Bashiru Jibril, Robert Opoku & Emmanuel Bruce (2024) Digital transformation in an emerging economy: exploring organizational drivers, Cogent Social Sciences, 10:1, DOI: 10.1080/23311886.2024.2302217