Digital Transformation Strategy and Environmental Performance: A Case Study
DOI:
https://doi.org/10.15837/ijccc.2022.6.5029Keywords:
Organization Culture , Business Sustainability, Environmental Performance, DigitalizationAbstract
Digital technology has drastically transformed businesses’ activities, operations, and processes. Today, digital efficiencies have inspired companies to take initiatives to leverage the firm’s environmental performance. The study’s primary purpose was to examine how a digital transformation strategy affects environmental performance under the mediating role of innovation capabilities and moderating role of digital organizational culture. The data was obtained from manufacturing industry employees in Pakistan. The results reveal that digital transformation strategy (DTS) positively and significantly affects innovation capabilities and environmental performance. The link between digital transformation and environmental performance is mediated by innovation capabilities, while digital organizational culture moderates the relationship between innovation capabilities and environmental performance.
References
E. Sepashvili, "Supporting Digitalization: Key Goal for National Competitiveness in Digital Global Economy," vol. 11, no. 2, 2020.
C. Matt, T. Hess, and A. Benlian, "Digital Transformation Strategies," Bus. Inf. Syst. Eng., vol. 57, no. 5, pp. 339-343, Oct. 2015.
https://doi.org/10.1007/s12599-015-0401-5
G. Vial, "Understanding digital transformation: A review and a research agenda," J. Strateg. Inf. Syst., vol. 28, no. 2, pp. 118-144, Jun. 2019.
https://doi.org/10.1016/j.jsis.2019.01.003
D. I. Popescu, S.-I. Ceptureanu, A. Alexandru, and E.-G. Ceptureanu, "Relationships between Knowledge Absorptive Capacity, Innovation Performance and Information Technology. Case study: the Romanian Creative Industries SMEs," Stud. Informatics Control, vol. 28, no. 4, pp. 463-476, Dec. 2019.
https://doi.org/10.24846/v28i4y201910
C. Ciurea and F. G. Filip, "Virtual Exhibitions in Cultural Institutions: Useful Applications of Informatics in a Knowledge-based Society," Stud. Informatics Control, vol. 28, no. 1, pp. 55-64, Mar. 2019.
https://doi.org/10.24846/v28i1y201906
M. Ianculescu and A. Alexandru, "Microservices - A Catalyzer for Better Managing Healthcare Data Empowerment," Stud. Informatics Control, vol. 29, no. 2, pp. 231-242, Jul. 2020.
https://doi.org/10.24846/v29i2y202008
E. A. Lindquist, "The digital era and public sector reforms: Transformation or new tools for competing values?," Can. Public Adm., vol. 65, no. 3, pp. 547-568, Sep. 2022.
https://doi.org/10.1111/capa.12493
F. Mahmood, A. Z. Khan, and M. B. Khan, "Digital organizational transformation issues, challenges and impact: A systematic literature review of a decade," Abasyn J. Soc. Sci., vol. 12, no. 2, Dec. 2019.
https://doi.org/10.34091/AJSS.12.2.03
L. Li, "Digital transformation and sustainable performance: The moderating role of market turbulence," Ind. Mark. Manag., vol. 104, pp. 28-37, Jul. 2022.
https://doi.org/10.1016/j.indmarman.2022.04.007
S. Ali, "Operational Readiness of Pakistan Textile Industry to Implement Industry 4.0 (a study of hyderabad textile)," Int. J. Eng. Appl. Sci. Technol., vol. 5, no. 10, Feb. 2021.
https://doi.org/10.33564/IJEAST.2021.v05i10.049
M. Abrar, S. Asif Ali, S. Ahmed Baig, F. Amjad, S. Rizwan, and B. Mohsin, "Innovation is creating competitive advantage: a perspective to improve the organic textile products for business growth," Ind. Textila, vol. 70, no. 02, pp. 147-153, 2019.
https://doi.org/10.35530/IT.070.02.1644
A. Nasir, N. Zakaria, and R. Zien Yusoff, "The influence of transformational leadership on organizational sustainability in the context of industry 4.0: Mediating role of innovative performance," Cogent Bus. Manag., vol. 9, no. 1, Dec. 2022.
https://doi.org/10.1080/23311975.2022.2105575
B. Lawson and D. Samson, "Developing innovation capability in organisations: a dynamic capabilities approach," Int. J. Innov. Manag., vol. 5, no. 03, pp. 377-400, 2001.
https://doi.org/10.1142/S1363919601000427
L. Ardito and R. M. Dangelico, "Firm environmental performance under scrutiny: The role of strategic and organizational orientations," Corp. Soc. Responsib. Environ. Manag., vol. 25, no. 4, pp. 426-440, 2018.
https://doi.org/10.1002/csr.1470
Z. Mani and I. Chouk, "Consumer Resistance to Innovation in Services: Challenges and Barriers in the Internet of Things Era," J. Prod. Innov. Manag., vol. 35, no. 5, pp. 780-807, Sep. 2018.
https://doi.org/10.1111/jpim.12463
S. Khin and T. C. Ho, "Digital technology, digital capability and organizational performance," Int. J. Innov. Sci., vol. 11, no. 2, pp. 177-195, Jun. 2019.
https://doi.org/10.1108/IJIS-08-2018-0083
N. Trushkina, R. Abazov, N. Rynkevych, and G. Bakhautdinova, "Digital Transformation of Organizational Culture under Conditions of the Information Economy," Virtual Econ., vol. 3, no. 1, pp. 7-38, Jan. 2020.
https://doi.org/10.34021/ve.2020.03.01(1)
S. Duerr, F. Holotiuk, H.-T. Wagner, D. Beimborn, and T. Weitzel, "What Is Digital Organizational Culture? Insights From Exploratory Case Studies," 2018.
https://doi.org/10.24251/HICSS.2018.640
A. U. Rehman and M. Anwar, "Mediating role of enterprise risk management practices between business strategy and SME performance," Small Enterp. Res., vol. 26, no. 2, pp. 207-227, May 2019.
https://doi.org/10.1080/13215906.2019.1624385
S. Kamble, A. Gunasekaran, and H. Arha, "Understanding the Blockchain technology adoption in supply chains-Indian context," Int. J. Prod. Res., vol. 57, no. 7, pp. 2009-2033, Apr. 2019.
https://doi.org/10.1080/00207543.2018.1518610
I. ul Haq, B. Mehmed, S. K. Naradda Gamage, P. Allayarov, D. Khan, and Z. Z. Khattak, "Nexus between export variety and carbon emissions in Pakistan: The role of FDI and technological development," PLoS One, vol. 17, no. 1, p. e0263066, Jan. 2022.
https://doi.org/10.1371/journal.pone.0263066
N. H. Vu and N. M. Nguyen, "Development of small-and medium-sized enterprises through information technology adoption persistence in Vietnam," Inf. Technol. Dev., vol. 28, no. 3, pp. 585-616, Jul. 2022.
https://doi.org/10.1080/02681102.2021.1935201
J. Loonam, S. Eaves, V. Kumar, and G. Parry, "Towards digital transformation: Lessons learned from traditional organizations," Strateg. Chang., vol. 27, no. 2, pp. 101-109, Mar. 2018.
https://doi.org/10.1002/jsc.2185
M. Sarfraz, K. Shehzad, and A. Farid, "Gauging the air quality of New York: a non-linear Nexus between COVID-19 and nitrogen dioxide emission," Air Qual. Atmos. Heal., vol. 13, no. 9, pp. 1135-1145, 2020.
https://doi.org/10.1007/s11869-020-00870-2
A. G. Frank, L. S. Dalenogare, and N. F. Ayala, "Industry 4.0 technologies: Implementation patterns in manufacturing companies," Int. J. Prod. Econ., vol. 210, pp. 15-26, Apr. 2019.
https://doi.org/10.1016/j.ijpe.2019.01.004
H. Wen, C.-C. Lee, and Z. Song, "Digitalization and environment: how does ICT affect enterprise environmental performance?," Environ. Sci. Pollut. Res., vol. 28, no. 39, pp. 54826-54841, Oct. 2021.
https://doi.org/10.1007/s11356-021-14474-5
M. Sarfraz, S. G. M. Shah, Z. Fareed, and F. Shahzad, "Demonstrating the interconnection of hierarchical order disturbances in CEO succession with corporate social responsibility and environmental sustainability," Corp. Soc. Responsib. Environ. Manag.
M. Sarfraz, W. Qun, L. Hui, and M. Abdullah, "Environmental Risk Management Strategies and the Moderating Role of Corporate Social Responsibility in Project Financing Decisions," Sustainability, vol. 10, no. 8, p. 2771, 2018.
https://doi.org/10.3390/su10082771
M. I. Abdullah, M. Sarfraz, W. Qun, and N. Javaid, "Drivers of green supply chain management," LogForum, vol. 14, 2018.
https://doi.org/10.17270/J.LOG.2018.297
J. Butschan, S. Heidenreich, B. Weber, and T. Kraemer, "Tackling Hurdles to Digital Transformation - The Role of Competencies for Successful Industrial Internet of Things (IIoT) Implementation," Int. J. Innov. Manag., pp. 169-208, Aug. 2019.
https://doi.org/10.1142/9781786347602_0007
J. M. Müller, J. Traub, P. Gantner, and K.-I. Voigt, "Managing Digital Disruption of Business Models in Industry 4.0," in Managing Digital Open Innovation, 2020, pp. 47-72.
https://doi.org/10.1142/9789811219238_0003
A. J. Isaksson, I. Harjunkoski, and G. Sand, "The impact of digitalization on the future of control and operations," Comput. Chem. Eng., vol. 114, pp. 122-129, Jun. 2018.
https://doi.org/10.1016/j.compchemeng.2017.10.037
P. Belingheri and P. Neirotti, "Digitalising products: towards an integrated view of challenges in development, design and user acceptance," Int. J. Technol. Manag., vol. 80, no. 1/2, p. 1, 2019.
https://doi.org/10.1504/IJTM.2019.10021442
W. Wang, Q. Cao, L. Qin, Y. Zhang, T. Feng, and L. Feng, "Uncertain environment, dynamic innovation capabilities and innovation strategies: A case study on Qihoo 360," Comput. Human Behav., vol. 95, pp. 284-294, Jun. 2019.
https://doi.org/10.1016/j.chb.2018.06.029
C. Heavin and D. J. Power, "Challenges for digital transformation - towards a conceptual decision support guide for managers," J. Decis. Syst., vol. 27, no. sup1, pp. 38-45, May 2018.
https://doi.org/10.1080/12460125.2018.1468697
B. Hinings, T. Gegenhuber, and R. Greenwood, "Digital innovation and transformation: An institutional perspective," Inf. Organ., vol. 28, no. 1, pp. 52-61, 2018.
https://doi.org/10.1016/j.infoandorg.2018.02.004
A. K. Feroz, H. Zo, and A. Chiravuri, "Digital Transformation and Environmental Sustainability: A Review and Research Agenda," Sustainability, vol. 13, no. 3, p. 1530, Feb. 2021.
https://doi.org/10.3390/su13031530
Z. Zhen, Z. Yousaf, M. Radulescu, and M. Yasir, "Nexus of Digital Organizational Culture, Capabilities, Organizational Readiness, and Innovation: Investigation of SMEs Operating in the Digital Economy," Sustainability, vol. 13, no. 2, p. 720, Jan. 2021.
https://doi.org/10.3390/su13020720
F. Tiago, A. Gil, S. Stemberger, and T. Borges-Tiago, "Digital sustainability communication in tourism," J. Innov. Knowl., vol. 6, no. 1, pp. 27-34, Jan. 2021.
https://doi.org/10.1016/j.jik.2019.12.002
D. Antoni, F. Jie, and A. Abareshi, "Critical factors in information technology capability for enhancing firm's environmental performance: case of Indonesian ICT sector," Int. J. Agil. Syst. Manag., vol. 13, no. 2, p. 159, 2020.
https://doi.org/10.1504/IJASM.2020.107907
B. Liu and P. De Giovanni, "Green process innovation through Industry 4.0 technologies and supply chain coordination," Ann. Oper. Res., Dec. 2019.
https://doi.org/10.1007/s10479-019-03498-3
L. Ardito, A. Messeni Petruzzelli, L. Dezi, and S. Castellano, "The influence of inbound open innovation on ambidexterity performance: Does it pay to source knowledge from supply chain stakeholders?," J. Bus. Res., no. April, pp. 0-1, 2018.
X. Zhao, X. Sun, L. Zhao, and Y. Xing, "Can the digital transformation of manufacturing enterprises promote enterprise innovation?," Bus. Process Manag. J., vol. 28, no. 4, pp. 960-982, Aug. 2022.
https://doi.org/10.1108/BPMJ-01-2022-0018
X. Zhou, Z. Cai, K. H. Tan, L. Zhang, J. Du, and M. Song, "Technological innovation and structural change for economic development in China as an emerging market," Technol. Forecast. Soc. Change, vol. 167, p. 120671, Jun. 2021.
https://doi.org/10.1016/j.techfore.2021.120671
F. T. C. Tan, J. Ondrus, B. Tan, and J. Oh, "Digital transformation of business ecosystems: Evidence from the Korean pop industry," Inf. Syst. J., vol. 30, no. 5, pp. 866-898, Sep. 2020.
https://doi.org/10.1111/isj.12285
J. Heredia, M. Castillo-Vergara, C. Geldes, F. M. Carbajal Gamarra, A. Flores, and W. Heredia, "How do digital capabilities affect firm performance? The mediating role of technological capabilities in the 'new normal,'" J. Innov. Knowl., vol. 7, no. 2, p. 100171, Apr. 2022.
https://doi.org/10.1016/j.jik.2022.100171
J. Amankwah-Amoah, Z. Khan, G. Wood, and G. Knight, "COVID-19 and digitalization: The great acceleration," J. Bus. Res., vol. 136, pp. 602-611, Nov. 2021.
https://doi.org/10.1016/j.jbusres.2021.08.011
K. F. Khawaja, M. Sarfraz, M. Rashid, and M. Rashid, "How is COVID-19 pandemic causing employee withdrawal behavior in the hospitality industry? An empirical investigation," J. Hosp. Tour. Insights, 2021.
https://doi.org/10.1108/JHTI-01-2021-0002
R. Loureiro, J. J. M. Ferreira, and J. Simões, "Approaches to measuring dynamic capabilities: Theoretical insights and the research agenda," J. Eng. Technol. Manag., vol. 62, p. 101657, Oct. 2021.
https://doi.org/10.1016/j.jengtecman.2021.101657
J. Benitez, Y. Chen, T. S. H. Teo, and A. Ajamieh, "Evolution of the impact of e-business technology on operational competence and firm profitability: A panel data investigation," Inf. Manag., vol. 55, no. 1, pp. 120-130, 2018.
https://doi.org/10.1016/j.im.2017.08.002
D. Proksch, A. F. Rosin, S. Stubner, and A. Pinkwart, "The influence of a digital strategy on the digitalization of new ventures: The mediating effect of digital capabilities and a digital culture," J. Small Bus. Manag., pp. 1-29, Mar. 2021.
https://doi.org/10.1080/00472778.2021.1883036
R. Teichert, "Digital Transformation Maturity: A Systematic Review of Literature," vol. 67, no. 6, pp. 1673-1687, Dec. 2019.
https://doi.org/10.11118/actaun201967061673
S. Bakshi, H. Choudhary, and P. S. Badal, "A multistage sampling case study in india of food packaging on buyers' behavior," Asian J. Agric. Extension, Econ. Sociol., pp. 1-7, 2019.
https://doi.org/10.9734/ajaees/2019/v31i130124
N. Salim, M. N. Ab Rahman, and D. Abd Wahab, "A systematic literature review of internal capabilities for enhancing eco-innovation performance of manufacturing firms," J. Clean. Prod., vol. 209, pp. 1445-1460, Feb. 2019.
https://doi.org/10.1016/j.jclepro.2018.11.105
D. L. Martins, D. L. da S. Lemos, L. F. R. Oliveira, J. Siqueira, D. Carmo, and V. N. Medeiros, "Information organization and representation in digital cultural heritage in Brazil: Systematic mapping of information infrastructure in digital collections for data science applications," J. Assoc. Inf. Sci. Technol., Mar. 2022.
https://doi.org/10.1002/asi.24650
P. Weritz, J. Braojos, and J. Matute, "Exploring the Antecedents of Digital Transformation: Dynamic Capabilities and Digital Culture Aspects to Achieve Digital Maturity," Organ. Transform. Inf. Syst., 2020.
T. S. Ong, A. S. Lee, B. H. Teh, H. B. Magsi, and S. H. Ng, "Environmental Capabilities and Environmental Innovations of Manufacturing Firms in Malaysia," Indones. J. Sustain. Account. Manag., vol. 4, no. 1, p. 1, Jun. 2020.
https://doi.org/10.28992/ijsam.v4i1.248
P. M. Podsakoff, S. B. MacKenzie, J.-Y. Lee, and N. P. Podsakoff, "Common method biases in behavioral research: A critical review of the literature and recommended remedies.," J. Appl. Psychol., vol. 88, no. 5, p. 879, 2003.
https://doi.org/10.1037/0021-9010.88.5.879
M. Sarfraz, W. Qun, A. Sarwar, M. I. Abdullah, M. K. Imran, and I. Shafique, "Mitigating effect of perceived organizational support on stress in the presence of workplace ostracism in the Pakistani nursing sector," Psychol. Res. Behav. Manag., vol. 12, pp. 839-849, 2019.
https://doi.org/10.2147/PRBM.S210794
H. Li, Y. Wu, D. Cao, and Y. Wang, "Organizational mindfulness towards digital transformation as a prerequisite of information processing capability to achieve market agility," J. Bus. Res., vol. 122, pp. 700-712, Jan. 2021.
https://doi.org/10.1016/j.jbusres.2019.10.036
P. S. Borah, S. Iqbal, and S. Akhtar, "Linking social media usage and SME's sustainable performance: The role of digital leadership and innovation capabilities," Technol. Soc., vol. 68, p. 101900, 2022.
https://doi.org/10.1016/j.techsoc.2022.101900
E. Martínez-Caro, J. G. Cegarra-Navarro, and F. J. Alfonso-Ruiz, "Digital technologies and firm performance: The role of digital organisational culture," Technol. Forecast. Soc. Change, vol. 154, p. 119962, May 2020.
https://doi.org/10.1016/j.techfore.2020.119962
X. Su, A. Xu, W. Lin, Y. Chen, S. Liu, and W. Xu, "Environmental Leadership, Green Innovation Practices, Environmental Knowledge Learning, and Firm Performance," SAGE Open, vol. 10, no. 2, p. 215824402092290, Apr. 2020.
https://doi.org/10.1177/2158244020922909
J. Henseler, C. M. Ringle, and R. R. Sinkovics, "The use of partial least squares path modeling in international marketing," in New challenges to international marketing, Emerald Group Publishing Limited, 2009.
https://doi.org/10.1108/S1474-7979(2009)0000020014
R. Kohli and N. P. Melville, "Digital innovation: review and synthesis," Inf. Syst. J., vol. 29, no. 1, pp. 200-223, Jan. 2019.
https://doi.org/10.1111/isj.12193
H. Gimpel, S. Hosseini, R. Huber, L. Probst, M. Röglinger, and U. Faisst, "Structuring Digital Transformation: A Framework of Action Fields and its Application at ZEISS," J. Inf. Technol. Theory Appl., vol. 19, no. 1, 2018.
F. Loeser, J. Recker, J. vom Brocke, A. Molla, and R. Zarnekow, "How IT executives create organizational benefits by translating environmental strategies into Green IS initiatives," Inf. Syst. J., vol. 27, no. 4, pp. 503-553, Jul. 2017.
Additional Files
Published
Issue
Section
License
Copyright (c) 2022 Muddassar Sarfraz, Zhixiao YE, Florin Dragan, Larisa Ivascu, Alin Artene
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
ONLINE OPEN ACCES: Acces to full text of each article and each issue are allowed for free in respect of Attribution-NonCommercial 4.0 International (CC BY-NC 4.0.
You are free to:
-Share: copy and redistribute the material in any medium or format;
-Adapt: remix, transform, and build upon the material.
The licensor cannot revoke these freedoms as long as you follow the license terms.
DISCLAIMER: The author(s) of each article appearing in International Journal of Computers Communications & Control is/are solely responsible for the content thereof; the publication of an article shall not constitute or be deemed to constitute any representation by the Editors or Agora University Press that the data presented therein are original, correct or sufficient to support the conclusions reached or that the experiment design or methodology is adequate.
