Contingent Impacts of Digital Transformation: An Organizational Change Perspective

In recent years, many firms have implemented digital transformation initiatives to create and capture more value, yet many fail to meet their objectives. Our study, using a longitudinal dataset of Chinese listed companies from 2010 to 2022, adopts an organizational change perspective to explore this discrepancy. We found that digital transformation alone does not favorably impact firm performance. However, the adverse effects can be mitigated or even reversed when firms align their organizational restructuring strategies with their digital transformation efforts. This underscores that the benefits of digital transformation depend significantly on the effective adaptation and alignment of restructuring strategies. Our research extends the existing literature by offering new insights into the contingent effects of digital transformation on firm performance and providing actionable recommendations for effective implementation.