Does digital transformation foster innovation outcomes? Examining the contingent effects of technological turbulence and structural flux

Abstract

Purpose Digital transformation (DT), a popular approach for deriving organizational innovation, has recently attracted substantial attention among industrial practitioners and academicians. Nevertheless, there is no clear understanding of the continuing debate about the relationship between DT and innovation outcomes. The purpose of this research advances the understanding of these complex relationships by investigating how technological turbulence and structural flux moderate the influences of DT on the quality and speed of innovation. Design/methodology/approach This study uses hierarchical regression analysis on time-lagged primary data collected from 464 Indian firms adopting DT projects in their industries. Findings The findings suggest the dual effects of DT on innovation quality and speed. Specifically, DT has an inverted U-shaped relationship with innovation quality but a positive linear relationship with innovation speed. Interestingly, the curvilinear and linear effects become stronger with higher levels of technological turbulence or lower levels of structural flux. Research limitations/implications The research findings are limited to data collected from Indian firms, which may limit the generalizability of the findings to other geographical regions with different environmental and organizational conditions. Practical implications The research findings provide valuable insight for managers on how to effectively harness DT to foster quality and speed of innovation, which is crucial for organizations aiming to stay ahead in today’s digital competitive market. Originality/value While digital technologies have emerged as a key driver of organizational innovation, there is no clear understanding of the environmental and organizational conditions under which DT either weakens or strengthens innovation quality and speed.