Exploring the Nexus: IT Capabilities, Digital Transformation, and Innovation in Traditional Manufacturing

Abstract

This research investigates the interplay between information technology capabilities, digital transformation strategies, and digital innovation performance in traditional manufacturing enterprises. Utilizing a multi-case exploratory research approach, incorporating dynamic capability theory and institutional theory, hypotheses were formulated and validated through empirical analysis of questionnaire survey data. Findings reveal that IT capabilities positively influence both digital product and process innovation performance. Additionally, digital transformation strategies mediate the relationship between IT capabilities and innovation performance. Organizational legitimacy moderates the impact of digital transformation strategies on innovation performance, while environmental dynamism influences the relationship between IT capabilities, transformation strategies, and innovation performance. The study underscores the importance of aligning internal resources with strategic needs to navigate digitalization successfully in traditional manufacturing contexts.