The Effect of Dynamic Capabilities and IT Capability on Firm Performance Perspective Mediating by Digital Transformation in Small Medium Enterprise

Dessy Hershanty; Jafrizal

doi:10.18535/ijsrm/v9i03.em02

Abstract

The purpose of this study is to determine the effect of information technology capabilities and dynamic capabilities on company performance which is moderated by digital transformation. The research approach used is quantitative with the type of survey research. The population in this study were small and medium enterprises (UKM) in the manufacturing sector in Surakarta which were registered in the database of the Surakarta Cooperative and UMKM Office with a sample of 100 SMEs with the unit of analysis being the owners of MSMEs. Data analysis was performed by conducting data quality tests and hypothesis testing using PLS (Partial Least Square). The results of the study concluded that information technology capabilities and dynamic capabilities have an influence on company performance through digital transformation.

Keywords

Information Technology CapabilityDynamic CapabilityDigital TransformationCompany Performance

References

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[refR-2] S. Andriani, N. Kesumawati, and M. Kristiawan, "The influence of the transformational leadership and work motivation on teachers performance," Int. J. Sci. Technol. Res., 2018.Google Scholar ↗

[refR-3] W. Viriyasitavat and D. Hoonsopon, "Blockchain characteristics and consensus in modern business processes," J. Ind. Inf. Integr., 2019.Google Scholar ↗

[refR-4] SE Fawcett, C. Wallin, C. Allred, AM Fawcett, and GM Magnan, “Information technology as an enabler of supply chain collaboration: A dynamic-capabilities perspective,” J. Supply Chain Manag., 2011.Google Scholar ↗

[refR-5] N. Trushkina, R. Abazov, N. Rynkevych, and G. Bakhautdinova, "Digital Transformation of Organizational Culture under Conditions of the Information Economy," Virtual Econ., 2020.Google Scholar ↗

[refR-6] A. Hanelt, E. Piccinini, RW Gregory, B. Hildebrandt, and M. Lutz, "Digital Transformation of Primarily Physical Industries - Exploring the Impact of Digital Trends on Business Models of Automobile Manufacturers," 12th Int. Conf. Informatic wirtschafts, 2015.Google Scholar ↗

[refR-7] PC Verhoef et al., "Digital transformation: A multidisciplinary reflection and research agenda," J. Bus. Res., 2021.Google Scholar ↗

[refR-8] 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., 2021.Google Scholar ↗

[refR-9] S. Schaltegger and M. Wagner, "Sustainable entrepreneurship and sustainability innovation: Categories and interactions," Bus. Strateg. Environ., 2011.Google Scholar ↗

[refR-10] Statistics Indonesia, "Statistics Indonesia 2020 Statistical Yearbook of Indonesia 2020," Stat. Yearb. Indonesia., 2020.Google Scholar ↗

[refR-11] V. Beattie and SJ Smith, "Value creation and business models: Refocusing the intellectual capital debate," Br. Account. Rev., 2013.Google Scholar ↗

[refR-12] RPJ Rajapathirana and Y. Hui, "Relationship between innovation capability, innovation type, and firm performance," J. Innov. Knowl., 2018.Google Scholar ↗

[refR-13] L. Cabral and A. Hortaçsu, "The dynamics of seller reputation: Evidence from ebay," J. Ind. Econ., 2010.Google Scholar ↗

[refR-14] E. Ributari Nurgahayu and E. Dwi Retnani, "Application of the Balanced Scorecard Method as a Benchmark for Measuring Company Performance," J. Science Ris. Account., 2015.Google Scholar ↗

[refR-15] A. Moldavska and T. Welo, "A Holistic approach to corporate sustainability assessment: Incorporating sustainable development goals into sustainable manufacturing performance evaluation," J. Manuf. Syst., 2019.Google Scholar ↗

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[refR-17] R. Lizwaril, "Measurement of Cooperative Performance with the Balanced Scorecard, ”Ilm. Account. and Humanika JlNAH, 2015.Google Scholar ↗

[refR-18] J. Loonam, S. Eaves, V. Kumar, and G. Parry, "Towards digital transformation: Lessons learned from traditional organizations," Strateg. Chang., 2018.Google Scholar ↗

[refR-19] B. Hinings, T. Gegenhuber, and R. Greenwood, "Digital innovation and transformation: An institutional perspective," Inf. Organ., 2018.Google Scholar ↗

[refR-20] K. Osmundsen, J. Iden, and B. Bygstad, "Digital Transformation: Drivers, Success Factors, and Implications," Mediterranean. Conf. Inf. Syst. Proc., 2018.Google Scholar ↗

[refR-21] S. Nambisan, "Digital Entrepreneurship: Toward a Digital Technology Perspective of Entrepreneurship," Entrep. Theory Pract., 2017.Google Scholar ↗

[refR-22] D. Kindström, "Towards a service-based business model - Key aspects for future competitive advantage," Eur. Manag. J., 2010.Google Scholar ↗

[refR-23] GP Pisano, "A Normative Theory of Dynamic Capabilities: Connecting Strategy, Know-How, and Competition," SSRN Electron. J., 2015.Google Scholar ↗

[refR-24] S. Pérez-López and J. Alegre, "Information technology competency, knowledge processes and firm performance," Ind. Manag. Syst data., 2012.Google Scholar ↗

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[refR-26] D. Sudrajat, "Dynamic Capability, Innovation Performance, and Performance of Logistics Service Companies in Indonesia (A Research Framework)," Binus Bus. Rev., 2013.Google Scholar ↗

[refR-27] L. Breznik and M. Lahovnik, "Renewing the resource base in line with the dynamic capabilities view: A key to sustained competitive advantage in the IT industry," J. East Eur. Manag. Stud., 2014.Google Scholar ↗

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[refR-29] T. Biedenbach and R. Müller, "Absorptive, innovative and adaptive capabilities and their impact on project and project portfolio performance," Int. J. Proj. Manag., 2012.Google Scholar ↗

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[refR-31] I. Ghozali and D. Ratmono, Multivariate and Econometric Analysis. 2017.Google Scholar ↗

[refR-32] R. Rahayu, S. Risk, and V. Juita, “Capability Information Technology, Company Performance and Company Value, ”J. Ris. Account. Integrated, 2020.Google Scholar ↗

[refR-33] E. Herwiyanti, "THE INFLUENCE OF INFORMATION TECHNOLOGY CAPABILITY ON THE QUALITY OF MANAGEMENT ACCOUNTING INFORMATION WITH TECHNOLOGY UNCERTAINTY AS A MODERATED VARIABLES," J. Chem. Inf. Model., 2013.Google Scholar ↗

[refR-34] S. Winasis and S. Riyanto, "Digital Transformation in the Indonesian Banking Industry: Impact on Employee Work Stress," Istishadia J. Ekon. and Bank. Sharia, 2020.Google Scholar ↗

[refR-35] R. Oktavenus, "Analysis of the Effect of Digital Transformation and Consumer Behavior Patterns on Changes in the Business Model of Companies in Indonesia," J. Manaj. Business and Entrepreneurship, 2019.Google Scholar ↗

[refR-36] SD Setiawan, R. Oktaviani, I. Fahmi, and S. Djohar, "SITUATIONAL ANALYSIS OF BROADBAND SERVICE PROVIDERS IN DIGITAL BUSINESS ERA," Mix J. Ilm. Manaj., 2018.Google Scholar ↗