Digital Transformation of Industrial Businesses: A Dynamic Capability Approach

Swapan Ghosh*, Mathew Hughes, Ian R. Hodgkinson, Paul Hughes

*Corresponding author for this work

Research output: Contribution to journalJournal articlepeer-review

Abstract

Industrial firms are under severe pressure to undertake digital transformation and leverage the Industrial Internet of Things (IIoT) and emerging technologies for the integration of industrial machines to share information on a real-time or near real-time basis. Though in recent years researchers have focused their attention on digital transformation, there is limited scholarly guidance for developing capabilities for such transformation. Drawing on dynamic capability theory and exploratory qualitative interviews with senior ‘elite’ executives from five of the world's largest multinational firms, the study outlines a new conceptual framework for digital transformative capability development. The integrative framework demonstrates how the three core capabilities of digital sensing, digital seizing, and digital reconfiguring manifest through associated capabilities of Strategic Sensing, Rapid Prototyping, Organization Structure, Business Model Transformation, and Cultural/Mindset Transformation. Internal and external contingencies are proposed as moderators of the relationship between IIoT and emerging technologies, and digital transformative capability development. Collectively, the article makes the case for Digital Transformation Capability and sheds new light on the digital transformation process. Implications for theory and practice are highlighted, and limitations are discussed.
Original languageEnglish
Article number102414
JournalTechnovation
Number of pages18
ISSN0166-4972
DOIs
Publication statusPublished - 10 Nov 2021
Externally publishedYes

Bibliographical note

Epub ahead of print. Published online: 10 November 2021.

Keywords

  • Digital transformation
  • Dynamic capability
  • IIoT
  • Emerging technologies

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