The impact of digital transformation on strategic agility through the medium of dynamic capabilities: A case of micro, small and medium enterprises in Mashonaland Central Province, Zimbabwe

Abstract

The importance of digital transformation as an enabler of strategic agility has garnered both advocates and detractors in academia and business around the world; some studies argue that digital transformation is the cornerstone of strategic agility while others refute this stance. Based on this incongruity, the purpose of this research was to examine the impact of digital transformation on strategic agility through the medium of dynamic capabilities. The relationship between strategic agility and the elements of scale of digital transformation, scope of digital transformation and speed of digital transformation as well as the elements of dynamic capabilities that is sensing, seizing and transforming was assessed. Primary data from management level individuals across micro, small and medium enterprises in Zimbabwean businesses was collected, prepared and analysed to draw conclusions on the observed relationship between the variables. The study found that all three components of digital transformation have a significant positive relationship with strategic agility through components of dynamic capabilities (sensing, seizing and transforming), and that collectively, they are significant predictors of organisations’ strategic agility. The study further established that dynamic capabilities has a moderating effect on the achievement of strategic agility under the influence of digital transformation through sensing, seizing and transforming. The relative importance of the contribution of the components of digital transformation and dynamic capabilities to strategic agility was also revealed, with speed and scale having the highest and lowest impact respectively. The research data was collected from 137 participants selected in Mashonaland Central Province across all industries in SME using survey questionnaires and was analyzed by SPSS using regression and coefficient tests to determine the impact of digital transformation on strategic agility through the medium of dynamic capabilities. The results revealed a positive significant impact of all elements to strategic agility. It was concluded that organisations should approach digital transformation iteratively, leveraging this difference in terms of the relative contribution of its components to achieve control over the desired impact on their strategic agility in the most cost-effective manner possible.