How firms cope with social crisis: The mediating role of digital transformation as a strategic response to the COVID-19 pandemic

Abstract

The COVID-19 pandemic has drawn attention to the strategic responses of Chinese firms on digital transformation and led to a call for enhancing competitive advantage via accelerating digital transformation. Besides the physical health issue, the pandemic has triggered an extraordinary social and economic crisis in which service industries have been attacked hard. In this situation, firms are meeting increasing competitive pressure, which urges them to achieve better performance with the help of digital transformation. Based on the technology-organization-environment framework and dynamic capabilities theory, this research proposed two studies with two methods, including a structural equation model and a regression discontinuity design with a fixed-effect model. The findings suggest digital transformation mediates the relationship between competitive pressure and firm performance among Chinese small- and medium-sized enterprises and large firms after the outbreak of COVID-19, respectively. It confirms that digital transformation is a practical strategic decision for Chinese service firms to respond to increasing competitive pressure in the COVID-19 pandemic. Besides, the results also illustrate the moderating effects of absorptive, innovative, and adaptive capability on the relationship between digital transformation and firm performance among large firms.

Financial Inclusion Through Technology: A Review of Trends in Emerging Markets

“…Furthermore, the pandemic has led to changes in the composition of household financial management and has affected the financial health of individuals, including dental students (Lestari et al, 2022;Sulistiyowati & Dessyarti, 2022). In response to the crisis, there has been an acceleration of digital transformation, with a focus on digital technologies in the public-health response, digital transformation in organizations, and the digital transformation of SMEs (Budd et al, 2020;Petrova et al, 2022;Wu et al, 2023;Lumat, 2023). The pandemic has led to an increased emphasis on digital forms of work and has prompted SMEs to update their business models to incorporate digital usage (Lumat, 2023;Nagel, 2020).…”

“…The pandemic has led to an increased emphasis on digital forms of work and has prompted SMEs to update their business models to incorporate digital usage (Lumat, 2023;Nagel, 2020). Moreover, the crisis has drawn attention to the strategic responses of Chinese firms on digital transformation, highlighting the importance of accelerating digital transformation to enhance competitive advantage (Wu et al, 2023). Lessons learned from the pandemic include the need to explore ways to reduce enterprise financial risk, the importance of leadership in crisis-induced digital transformation, and the impact of the pandemic on financial development and financial inclusion (Li et al, 2022;Bartsch et al, 2020;Ojong & Asongu, 2021).…”

Occupational Health Management in New Work – a Protocol for a Mixed-Method Study: Project BGM4NewWork

“…Clear effects can be seen, for example, with regard to digitalization. Companies introduced NW measures, such as new digital and virtual tools, as this enables companies to improve their performance and actively adapt to the transformation process and external global factors [3]. A growing number of employees around the world were increasingly working in NW settings.…”