Navigating the Digital Landscape: An Exploration of the Relationship Between Technology-Organization-Environment Factors and Digital Transformation Adoption in SMEs

The aim of this research is to examine the factors that affect the digital transformation (DT) adoption in small and medium-sized enterprises (SMEs) in Danang, Vietnam, using the Technology-Organization-Environment (TOE) framework and PLS-SEM approach. Notwithstanding the growing attention towards the adoption of DT, there is a dearth of comprehensive research that examines the combined impact of environmental, organizational, and technological factors on DT adoption within SMEs. Therefore, this study aims to fill this gap by building upon the existing literature to provide quantitative evidence on the adoption of DT in SMEs. The findings of our study indicate that implementing DT in SMEs is impacted by a confluence of factors, including environmental, organizational, and technological considerations. Specifically, technological factors such as cybersecurity and IT integration capabilities, environmental factors such as clients and partnerships, and organizational capabilities such as top management support and governance, have a significant positive impact on DT adoption. The study also uncovers that technological factors play a mediating role in the relationship between organizational and environmental factors in the adoption of DT by SMEs. The present study enhances the existing knowledge on the adoption of DT in SMEs by conducting a thorough examination of the factors that affect DT adoption. The study underscores the significance of considering both technical and organizational factors while executing DT initiatives and identifies potential areas for further investigation.