The impacts of dynamic capabilities on SMEs' digital transformation process: The resource-based view perspective

Abstract

Research background: SMEs' concern for the digital literacy of their workforce, their interest in increasing digital literacy among employees, and securing their digital platforms, have been major issues in their digital transformation process. To reduce those obstacles, the dynamic capabilities of SMEs included in the Resource-based View (RBV) might be an effective solution since they help companies be more competitive and proactive against the threats they face in the digitalization process.

Purpose of the article: This research aims to investigate whether SMEs' dynamic capabilities positively contribute to their digital transformation process.

Methods: In line with the proposed relationships, this paper analyzes SMEs from Czechia by running Ordinal Logistic Regression analyses. The research sample is created by stratified random sampling and purposive sampling methods. The research data is collected via telephone surveys.

Findings & value added: This research does not find a positive relationship between the dynamic capabilities of SMEs and the digital transformation process. While the results related to digital literacy are negatively associated with digital transformation, no significant relationship exists between security actions and the digital transformation of SMEs. This paper extends the scope of RBV on the digital transformation of SMEs by analyzing various dynamic capabilities of SMEs that have not been included in a sole study. Moreover, the perceptions of SME executives are considered by this research to provide effective solutions for the problems they face in digital transformation. Having a joint venture agreement with well-experienced IT companies, having a network with partner firms, looking for funding opportunities in the EU, participating in some practical training, and providing internships for bachelor students might enable SMEs to hit their targets in digital transformation.

Keywords

digital transformation, digital literacy, cyber-security, dynamic capabilities of the Resource Based View, SMEs

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