Mining Braces of Innovation Linking to Digital Transformation Grounded in TOE Framework

Abstract

How firms drive innovation in digital transformation remains largely unanswered and this article is an attempt in that direction to deconstruct the digital innovation of small and medium-sized manufacturing enterprises (SMMEs) realizability condition and evolve the body of knowledge. We developed a TOE framework based on digital innovation theory to investigate the impact of the configuration effect of technology, organization and environment regarding the characteristic on a firm’s digital innovation. We performed fuzzy-set qualitative comparative analysis (fsQCA) on survey data collected from 141 SMMEs in China to examine configuration paths formed by different conditions. The results reveal that the success of a firm’s digital innovation practice is not driven by a single factor, but the result of multiple factors’ combined interaction, in which four sets of high digital innovation realization paths could be further summarized as “total factor driven”, “technology-environment oriented”, “organization-technology oriented”, and “organization oriented-environment”. These findings make sound theoretical and practical contributions to the usage of the TOE framework in the domain of developing a firm’s digital innovation. Bringing the SMMEs’ enlightenment is digital innovation, which is integral, systematic engineering, despite technology itself being the primary role of the whole process, more important is the organization’s agile strategy and digital positioning, as well as making full use of the advantages of the current environment for companies, thus better promoting the emergence and deepening digital innovation.