When digital technology adoption creates tensions: organizational conflict, knowledge inertia, and firm performance

Purpose Although digital technology (DT) adoption can help firms improve operational efficiency and decision quality, many firms still struggle to translate such adoption into realized performance gains. Drawing on socio-technical systems theory, this study examines the associations among DT adoption, organizational conflict, knowledge inertia, and firm performance. Design/methodology/approach This study uses survey data from 208 firms. Hierarchical regression analyses are employed to examine the proposed relationships. Findings The results indicate that DT adoption is positively associated with both firm performance and organizational conflict, whereas organizational conflict is negatively associated with firm performance. More interestingly, learning inertia strengthens the positive association between DT adoption and organizational conflict; in contrast, experience inertia strengthens the positive association between DT adoption and firm performance. Originality/value This study contributes to technology-driven operations management research by revealing the mechanisms underlying the DT adoption–performance relationship. It also offers practical insights for managers seeking to navigate the challenges of digital change.