Managing digital transformation in a global environment: The role of national culture

Abstract

In today's fast-changing business environment, digital transformation has become an essential strategic imperative for companies seeking to maintain a competitive edge. However, research on the effect of national culture on digital transformation is lacking. This study seeks to address this gap by investigating the effect of national culture on digital transformation, with a focus on the mediating role of digital competencies and information system management practices, as well as the moderating effect of leadership. 250 managers and employees with digital transformation experience across various industries in Saudi Arabia were surveyed. Structural equation modeling (SEM) was employed to analyze and test the research hypotheses. The findings demonstrate that national culture significantly affects digital transformation, with digital competencies and information system management practices acting as mediators. Furthermore, the study discovered that leadership plays a moderating role in the relationship between national culture and digital transformation. The positive impact of national culture on digital transformation is amplified when there is a transformational leadership style in place. These insights hold significant implications for organizations embarking on digital transformation initiatives, emphasizing the importance of fostering a culture encourages digital innovation and risk-taking, investing in digital capabilities and effective information system management, and nurturing transformational leadership to drive successful digital transformation efforts.