Turning the lens: linking knowledge-based dynamic capabilities, digital transformation and business model innovation

Abstract

Purpose As organizations face constant disruption from technological innovation and evolving market demands, understanding how to successfully implement digital transformation (DT) has become increasingly critical. While prior research has often examined how DT influences dynamic capabilities (DCs), this study aims to invert that perspective by investigating how three specific DCs, namely, information capability, organizational agility and absorptive capacity, enable DT. It further explores the mediating role of business model innovation (BMI) in the relationship between DT and company performance. Design/methodology/approach The study is based on surveys data collected from 184 chief executive officers of Spanish enterprises analyzed using partial least squares structural equation modeling. Findings The results show that all three DCs have a significant positive effect on DT. Furthermore, BMI plays a partial mediating role in the relationship between DT and company performance. Practical implications The findings suggest that managers should prioritize the development of internal capabilities before initiating DT efforts. In particular, fostering organizational agility, strengthening information practices and enhancing the ability to acquire and integrate external knowledge are crucial for enabling transformation and driving performance through BMI. Originality/value This study advances the DCs framework by demonstrating how specific knowledge-based capabilities function as antecedents to DT, thereby emphasizing internal organizational conditions over external tools. Furthermore, by empirically validating the mediating role of BMI, it clarifies the mechanisms through which DT as a holistic process contributes to performance gains, rather than through isolated digital technologies.