CHAPTER 4 RESULTS AND DISCUSSION
4.6 Discussion of the Research Findings
4.6.2 Discussion on the Main Effect
This study measured the external environment which included four dimensions (e.g. customer needs, market competition, government policy and digital technology) and the internal conditions which included three dimensions (e.g. digital strategy,
organization capability and leadership). In the process of empirical research, it was found that the second-order factor model constructed in this study indicated a good degree of fitting, so SEM analysis and hierarchical regression method were used to directly test the relationship between the external environment, internal conditions, digital innovation and DT.
4.6.2.1 The Impact of the External Environment on the DT of Enterprises ……….
According to the results of SEM analysis, the standardized path coefficient of external environment on DT was 0.28 (P＜0.001). It indicated that the external environment had a significant effect on DT, which was consistent with the research results of (Tarutė et al., 2018; Tsenzharik et al., 2020; K. Zhu et al., 2006) on the relationship between the external environment and DT. This also showed that the external environment was one of the key factors influencing the DT of enterprises.
In addition, according to the multi-level regression analysis, the regression analysis results of customer needs on DT were F=10.539 (P<0.001), =0.359 (P<0.001)，indicating that customer needs had a significant effect on DT, which was consistent with the research results of (Loonam et al., 2018; Narungsun Wilaisakoolyong, 2018) on the relationship between customer needs and DT. It showed that customer needs was the driving force of enterprises’ DT. The upgrading of customer consumption behaviors, customers’ expectations for the improvement of products and service quality, the customer-centric development trend and the improvement of customer satisfaction will affect enterprises’ DT.
The regression analysis results of market competition on DT were F=10.955 (P<0.001), = 0.339 (P<0.001), indicating that market competition had a significant effect on DT, which was consistent with the research results of (Hadia &
Hmoodb, 2020; Narungsun Wilaisakoolyong, 2018) on the relationship between market competition and DT. It showed that market competition was one of the significant factors to promote the DT of enterprises. Peer market competition pressure, cost reduction, productivity improvement, the rapid changing market competition patterns, and enterprises’ pursuit of market share growth were all driving enterprises to carry out DT.
The regression analysis results of government policy on DT were F=11.672 (P<0.001), =0.345 (P<0.001), indicating that government policy had a significant effect on DT, which was consistent with the research results of (Chunliang Chen et al., 2021; Tsenzharik et al., 2020) on the relationship between government policy and DT. It showed that government policy was one of the significant factors to promote the DT of enterprises. The government’s financial support and incentives, formulation of financial subsidies and tax relief policies for relevant enterprises’ DT, and formulation of relevant special plans to guide enterprises’ DT can effectively encourage and guide enterprises to carry out DT.
The regression analysis results of digital technology on DT were F=10.208 (P<0.001), =0.318 (P<0.001), indicating that digital technology had a significant effect on DT, which was consistent with the research results of (Châlons &
Dufft, 2017; Majchrzak et al., 2016; Narungsun Wilaisakoolyong, 2018) on the relationship between digital technology and DT. It showed that digital technology was one of the significant factors to promote the DT of enterprises. The development of NGIT, the support of information infrastructures and the improvement of capabilities of industry digital technologies were the foundation and technical guarantee for enterprises’ DT.
4.6.2.2 The Impact of the External Environment on the DI of Enterprises………..
According to the results of SEM analysis, the standardized path coefficient of the external environment on DI was 0.23 (P＜0.01). It indicated that the external environment had a significant effect on DI, which was consistent with the research results of (Nadeem, 2018) on the relationship between the external environment and DI. This also showed that the external environment was one of the key factors influencing the DI of enterprises.
In addition, according to the multi-level regression analysis, the regression analysis results of customer needs on DI were F=9.817 (P<0.001), =0.291 (P<0.001)，indicating that customer needs had a significant effect on DI, which was consistent with the research results of (Abrell et al., 2016; Nadeem, 2018) on the relationship between customer needs and DI. It showed that customer needs was one of
the significant factors to promote enterprises’ DI. Paying attention to customer needs and meeting customer needs was one of the purposes of enterprises’ DI.
The regression analysis results of market competition on DI were F=9.131 (P<0.001), = 0.230 (P<0.001), indicating that market competition had a significant effect on DI, which was consistent with the research results of (Kostić, 2018) on the relationship between market competition and DI. It showed that market competition was one of the significant factors to promote the DI of enterprises. Market competition drove enterprises to carry out DI.
The regression analysis results of government policy on DI were F=10.959 (P<0.001), =0.298 (P<0.001), indicating that government policy had a significant effect on DI, which was consistent with the research results of (Doh & Kim, 2014; Wei et al., 2013; Zhou & Zhang, 2015) on the relationship between government policy and DI. It showed that government policy was one of the significant factors to promote the DI of enterprises. Government policies can effectively encourage and guide enterprises to carry out DI.
The regression analysis results of digital technology on DI were F=8.564 (P<0.001), =0.198 (P<0.001), indicating that digital technology had a significant effect on DI, which was consistent with the research results of (Nylén & Holmström, 2015) on the relationship between digital technology and DI. It showed that digital technology was one of the significant factors to promote the DI of enterprises and the foundation and technical assurance of the DI of enterprises.
4.6.2.3 The Impact of the External Environment on the Internal Conditions of Enterprises………
According to the results of SEM analysis, the standardized path coefficient of the external environment on the internal conditions was 0.51 (P<0.001).
It indicated that the external environment had a significant effect on internal conditions, which was consistent with the research results of (Wolf et al., 2018) on the relationship between external environment and internal conditions. This also showed that the external environment was the key factor influencing the internal conditions change of enterprises.
In addition, according to the multi-level regression analysis, the regression coefficients of customer needs on digital strategy, organization capability
and leadership were 0.199 (P<0.001), 0.417 (P<0.001) and 0.275 (P<0.001) respectively, indicating that customer needs had a significant effect on digital strategy, organization capability and leadership, which was consistent with the research results of (Heavin & Power, 2018; Tarutė et al., 2018) on the relationship between external environment and digital strategy, organization capability and leadership. Customer needs can drive enterprises to formulate relevant digital strategies to meet customers;
Customer needs forced enterprises to improve their organization capabilities and responded quickly to customer needs; Customer needs can also promote the transformation of enterprise leaders’ consciousness and behaviors.
The regression coefficients of market competition on digital strategy, organization capability and leadership were 0.180 (P<0.001), 0.330 (P<0.001) and 0.208 (P<0.001) respectively, indicating that market competition had a significant effect on digital strategy, organization capability and leadership, which was consistent with the research results of (Wilaisakoolyong, 2018) on the relationship between market competition and digital strategy, organization capability and leadership. Market competition forced enterprises to make strategic adjustment. The formulation and implementation of digital strategy was a necessary means for enterprises to face market competition. Market competition drove enterprises to continuously improve their organization capabilities, such as integration ability, learning ability and innovation ability. Market competition will also promote the awareness and support of enterprise leaders for DT.
The regression coefficients of government policy on digital strategy, organization capability and leadership were 0.203 (P<0.001), 0.338 (P<0.001) and 0.259 (P<0.001) respectively, indicating that market competition had a significant effect on digital strategy, organization capability and leadership, which was consistent with the research results of (Chakraborty et al., 2019) on the relationship between government policy and digital strategy, organization capability and leadership.
The regression coefficients of digital technology on digital strategy, organization capability and leadership were 0.146(P<0.001), 0.258(P<0.001) and 0.169(P<0.001) respectively，indicating that digital technology had a significant effect on digital strategy, organization capability and leadership, which was consistent with the research results of (Chakraborty et al., 2019; Ifenthaler & Egloffstein, 2020)
on the relationship between digital technology and digital strategy, organization capability and leadership. Digital technology was the foundation and assurance for the implementation of digital strategy. The application of digital technology can greatly improve the organization capability of enterprises. The development and application of digital technology had continuously promoted the change of leaders’ awareness of DT.
4.6.2.4 The Impact of the Internal Conditions on the DI of Enterprises According to the results of SEM analysis, the standardized path coefficient of internal conditions on DI was 0.51 (P<0.001)，indicating that internal conditions had a significant effect on DI, which was consistent with the research results of (Nasiri et al., 2020) on the relationship between internal conditions and DI.
This also showed that the internal conditions was the key factor influencing the DI of enterprises.
In addition, according to the multi-level regression analysis, the regression analysis results of digital strategy on DI were F=9.913 (P<0.001), =0.276 (P<0.001)，indicating that digital strategy had a significant effect on DI, which was consistent with the research results of (Guinan et al., 2019) on the relationship between digital strategy and DI. It showed that digital strategy was the top-level design to promote enterprise digital innovation and played a decisive role.
The regression analysis results of organization capability on DI were F=11.059 (P<0.001), =0.296 (P<0.001), indicating that organization capability had a significant effect on DI, which was consistent with the research results of (Chan et al., 2019; Wang et al., 2019) on the relationship between organization capability and DI. It showed that the stronger the organization capability of an enterprise was, the greater the impact on enterprise digital innovation had.
The regression analysis results of leadership on DI were F=12.613 (P<0.001), =0.374 (P<0.001), indicating that leadership had a significant effect on DI, which was consistent with the research results of (Mihardjo et al., 2019) on the relationship between leadership and DI. It showed that leadership awareness, leadership role and leadership support were the key to promoting enterprise DI.
4.6.2.5 The Impact of the Internal Conditions on the DT of Enterprises………..
According to the results of SEM analysis, the standardized path coefficient of internal conditions on DT was 0.49(P<0.001)，indicating that internal conditions had a significant effect on DT, which was consistent with the research results of (Tsenzharik et al., 2020; Wolf et al., 2018) on the relationship between internal conditions and DT. This also showed that the internal conditions was the key factor influencing the DT of enterprises.
In addition, according to the multi-level regression analysis, the regression analysis results of digital strategy on DT were F=10.014(P<0.001), =
0.315 (P<0.001)，indicating that digital strategy had a significant effect on DT, which was consistent with the research results of (Kane et al., 2015) on the relationship between digital strategy and DT. It showed that the formulation of digital strategy determines the top-level design of the DT of enterprises, and the role and positioning of digital strategy determine the significance of enterprises’ DT in enterprise management. Therefore, digital strategy was the key to promoting DT, which played a decisive role in the DT of enterprises.
The regression analysis results of organization capability on DT were F=17.945 (P<0.001), =0.463 (P<0.001) indicating that organization capability had a significant effect on DT, which was consistent with the research results of (Gergs, 2019) on the relationship between organization capability and DT. It showed that the improvement of organization capability (e.g. organization agility, integration ability, learning ability and innovation ability) can promote the DT of enterprises.
The regression analysis results of leadership on DT were F=10.995 (P<0.001), = 0.348 (P<0.001), indicating that leadership had a significant effect on DT, which was consistent with the research results of (Schiuma et al., 2021; Singh &
Hess, 2020; Sow & Aborbie, 2018) on the relationship between leadership and DT. It showed that the leaders’ awareness of DT, the leaders’ role in the DT project of enterprise, and the leaders’ support for DT were the key to promote the DT of enterprises.
4.6.2.6 The Impact of DI on the DT of Enterprises
According to the results of SEM analysis, the standardized path coefficient of DI on DT were 0.16 (P=0.011＜0.05), indicating that DI had a significant effect on DT, which was consistent with the research results of (Hanelt et al., 2021; Hinings et al., 2018; Huang et al., 2017) on the relationship between DI and DT. This showed that DI was one of the key factors affecting the DT of enterprises, the good environment of innovation and the effective mechanism of innovation were the premise of enterprises’
DT, and sufficient digital innovation investment were the guarantee of enterprises’ DT.
In addition, as shown in Figure 4.6, the standardized path coefficient of external environment on DT was 0.27, that of DI on DT was 0.16, and that of internal conditions on DT was 0.49. It can be seen that the impact of internal conditions on DT was greater than that of external environment and digital innovation. The standardized path coefficient of external environment on DI was 0.24, and the standardized path coefficient of internal environment on DI was 0.50. It can be seen that the impact of internal conditions on DI was greater than that of external environment. Therefore, enterprises should focus on the role of internal conditions on the DI and DT of enterprises.