The mediating role of organizational factors between environmental changes and SMEs’ digital transformation

Purpose Based on the technology-organization-environment (TOE) framework, the goal of this study is to examine the mediating role of organizational factors between environmental changes and SMEs digital transformation (DT). Precisely, it tests a structural model with the mediating role of top management support and digital strategy between general environmental and industry-specific factors, perceived barriers and digital technology usage, DT and firm performance. It also examines the moderating effects of sectors on the relationship between digital technology usage and DT. Design/methodology/approach Data were obtained from 1,000 SMEs in different sectors of Bulgaria through a standardized questionnaire and were processed using SmartPLS. Findings The results show that top management support and digital strategy mediate the effects of both general environmental and industry-specific factors and internal antecedents (perceived barriers and digital technology usage) on DT and firm performance. The industry sector moderates the influence of digital technology usage on DT. Research limitations/implications This study uses cross-sectional data, which provide only a snapshot of the current state of SMEs’ DT in Bulgaria. Practical implications The results suggest that SMEs managers should be more open to both general and industry-specific environmental signals and should rethink their strategies regarding the use of digital technologies to improve performance. Social implications The advancement of DT in SMEs has great social importance as it can contribute to improving the quality of life, greater employment in technology sectors and the development of more innovative products and services. Originality/value This study enriches the TOE model by separating the effects of environmental factors into general and industry-specific ones. It also reveals the mediating role of organizational factors between environmental factors and DT.