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Digital transformation ambidexterity and business performance

Qian-Ru Liu (Department of Accounting, Guangdong University of Foreign Studies, Guangzhou, China)
Jian-Mei Liu (Department of Accounting, Tianjin University of Finance and Economics, Tianjin, China)
Zhen-Peng He (University of International Business and Economics, Beijing, China)

Journal of Enterprise Information Management

ISSN: 1741-0398

Article publication date: 13 July 2023

Issue publication date: 16 August 2023

1330

Abstract

Purpose

What distinguishes digital transformation from other traditional IT transformations is its involvement of the entire organization, rather than merely the IT department. Thus, instead of taking a perspective that is confined to the IT department, this paper studies the ambidextrous nature of digital transformation (DT) from the standpoint of the whole firm. The authors define DT ambidexterity as the capability to utilize digital technology to simultaneously improve the efficiency of existing businesses (DT exploitation) and to promote business growth (DT exploration).

Design/methodology/approach

Using annual reports of Chinese firms as a mining material, this paper deploys text mining and word frequency analysis to develop a data set of digital transformation to construct DT exploitation, DT exploration and DT ambidexterity, so that the authors can examine and compare their impact on business performance.

Findings

This study's statistics show that observations in this research sample mainly manifest DT ambidexterity and DT exploitation, while DT exploration makes up the smallest proportion. The authors find that DT exploitation, DT exploration, and DT ambidexterity have positive, yet heterogeneous effects on business performance.

Research limitations/implications

This study expands the existing literature of IT-related ambidexterity by examining the ambidextrous nature of DT from the angle of company-wide strategy instead of the perspective from IT-department and expands the extant literature of digital transformation by examining the heterogeneous effects of its different components on business performance. The authors also add to the digital strategizing literature by showing that different business strategy goals can be attained through different stages of DT.

Originality/value

This study expands the existing literature of IT-related ambidexterity by examining the ambidexterity nature of DT from the angle of company-wide strategy instead of the perspective from IT department and expands the extant literature of digital transformation by examining the heterogeneous effects of its different components on business performance. The authors also add to the digital strategizing literature by showing that different business strategy goals can be attained through different stages of DT.

Keywords

Acknowledgements

The authors really appreciate the funding from the National Natural Foundation (Grant number: 71702123), the Social Science Foundation of the Ministry of Education of China (Grant number: 19YJC630105 and 17YJC790095) and Tianjin University of Finance and Economics Outstanding Young Teachers Support Program. The authors would like to thank the undergraduate students, Ziyu Chen and Qiaomin Li, at Guangdong University of Foreign Studies for their excellent research assitance in this paper.

Citation

Liu, Q.-R., Liu, J.-M. and He, Z.-P. (2023), "Digital transformation ambidexterity and business performance", Journal of Enterprise Information Management, Vol. 36 No. 5, pp. 1402-1420. https://doi.org/10.1108/JEIM-08-2022-0280

Publisher

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Emerald Publishing Limited

Copyright © 2023, Emerald Publishing Limited

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