IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v15y2023i3p1915-d1041008.html
   My bibliography  Save this article

Strategic Orientation, Dynamic Capabilities, and Digital Transformation of Commercial Banks: A Fuzzy-Set QCA Approach

Author

Listed:
  • Songsong Cheng

    (School of Economics and Finance, South China University of Technology, Guangzhou 510006, China
    Mobile Post-Doctoral Stations, Shunde Rural Commercial Bank, Foshan 528300, China)

  • Qunpeng Fan

    (School of Economic, Management and Law, Jilin Normal University, Siping 136000, China)

  • Minghao Huang

    (Seoul Business School, aSSIST, Seoul 03767, Republic of Korea)

Abstract

Digital transformation is a critical challenge for commercial banks to achieve sustainable competitive advantages in the digital economy. However, conventional research focuses too much on constructing linear models to explain the non-linear relationships between and among the factors relevant to digital transformation. By adopting the configurational framework, we propose that the interactions between strategy and dynamic capabilities determine the paths of how digital transformation may succeed or fail. The fuzzy-set qualitative comparative analysis (fsQCA) of digital transformation practices by Chinese commercial banks shows that: (1) a single condition of strategic orientation or dynamic capabilities does not constitute the necessary condition for high digital transformation, yet market orientation plays a more general role in generating high digital transformation. (2) There are three configurational paths that can contribute to high digital transformation of commercial banks, such as sensing capability-driven paths dominated by strategic orientation, integrating capability-driven paths dominated by strategic orientation, and the market orientation-driven paths dominated by dynamic capabilities. (3) There are two configurational paths that lead to non-high digital transformation, which verifies the existence of the asymmetrical relationship compared to the configurational paths of high digital transformation; (4) In the pathways dominated by strategic orientation, there is a substitutive relationship between sensing capability and integrating capability. The findings make contributions to the literature on digital transformation and provide implications for the digital transformation of commercial banks.

Suggested Citation

  • Songsong Cheng & Qunpeng Fan & Minghao Huang, 2023. "Strategic Orientation, Dynamic Capabilities, and Digital Transformation of Commercial Banks: A Fuzzy-Set QCA Approach," Sustainability, MDPI, vol. 15(3), pages 1-19, January.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:3:p:1915-:d:1041008
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/15/3/1915/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/15/3/1915/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Anne Parmigiani & Jennifer Irwin & Brooke Lahneman, 2022. "Building greener motorhomes: How dual‐purpose technical and relational capabilities affect component and full product innovation," Strategic Management Journal, Wiley Blackwell, vol. 43(6), pages 1110-1140, June.
    2. Thakor, Anjan V., 2020. "Fintech and banking: What do we know?," Journal of Financial Intermediation, Elsevier, vol. 41(C).
    3. Kamini Gupta & Donal Crilly & Thomas Greckhamer, 2020. "Stakeholder engagement strategies, national institutions, and firm performance: A configurational perspective," Strategic Management Journal, Wiley Blackwell, vol. 41(10), pages 1869-1900, October.
    4. David J. Teece & Gary Pisano & Amy Shuen, 1997. "Dynamic capabilities and strategic management," Strategic Management Journal, Wiley Blackwell, vol. 18(7), pages 509-533, August.
    5. Kohtamäki, Marko & Parida, Vinit & Patel, Pankaj C. & Gebauer, Heiko, 2020. "The relationship between digitalization and servitization: The role of servitization in capturing the financial potential of digitalization," Technological Forecasting and Social Change, Elsevier, vol. 151(C).
    6. Thakor, Anjan, 2020. "Corrigendum to: Fintech and Banking: What Do We Know?," Journal of Financial Intermediation, Elsevier, vol. 43(C).
    7. André Hanelt & René Bohnsack & David Marz & Cláudia Antunes Marante, 2021. "A Systematic Review of the Literature on Digital Transformation: Insights and Implications for Strategy and Organizational Change," Journal of Management Studies, Wiley Blackwell, vol. 58(5), pages 1159-1197, July.
    8. De Crescenzo, Veronica & Ribeiro-Soriano, Domingo Enrique & Covin, Jeffrey G., 2020. "Exploring the viability of equity crowdfunding as a fundraising instrument: A configurational analysis of contingency factors that lead to crowdfunding success and failure," Journal of Business Research, Elsevier, vol. 115(C), pages 348-356.
    9. Du, Yunzhou & Kim, Phillip H., 2021. "One size does not fit all: Strategy configurations, complex environments, and new venture performance in emerging economies," Journal of Business Research, Elsevier, vol. 124(C), pages 272-285.
    10. Chen, Hansong & Tian, Zhen, 2022. "Environmental uncertainty, resource orchestration and digital transformation: A fuzzy-set QCA approach," Journal of Business Research, Elsevier, vol. 139(C), pages 184-193.
    11. Niemand, Thomas & Rigtering, J.P. Coen & Kallmünzer, Andreas & Kraus, Sascha & Maalaoui, Adnane, 2021. "Digitalization in the financial industry: A contingency approach of entrepreneurial orientation and strategic vision on digitalization," European Management Journal, Elsevier, vol. 39(3), pages 317-326.
    12. Jiatong Yu & Taesoo Moon, 2021. "Impact of Digital Strategic Orientation on Organizational Performance through Digital Competence," Sustainability, MDPI, vol. 13(17), pages 1-15, August.
    13. Xulong Dai, 2022. "Supply Chain Relationship Quality and Corporate Technological Innovations: A Multimethod Study," Sustainability, MDPI, vol. 14(15), pages 1-17, July.
    14. Chaohong Na & Xue Chen & Xiaojun Li & Yuting Li & Xiaolan Wang, 2022. "Digital Transformation of Value Chains and CSR Performance," Sustainability, MDPI, vol. 14(16), pages 1-24, August.
    15. Helfat, Constance E. & Raubitschek, Ruth S., 2018. "Dynamic and integrative capabilities for profiting from innovation in digital platform-based ecosystems," Research Policy, Elsevier, vol. 47(8), pages 1391-1399.
    16. Douglas, Evan J. & Shepherd, Dean A. & Prentice, Catherine, 2020. "Using fuzzy-set qualitative comparative analysis for a finer-grained understanding of entrepreneurship," Journal of Business Venturing, Elsevier, vol. 35(1).
    17. Florian Diener & Miroslav Špaček, 2021. "Digital Transformation in Banking: A Managerial Perspective on Barriers to Change," Sustainability, MDPI, vol. 13(4), pages 1-27, February.
    18. Ghosh, Swapan & Hughes, Mat & Hodgkinson, Ian & Hughes, Paul, 2022. "Digital transformation of industrial businesses: A dynamic capability approach," Technovation, Elsevier, vol. 113(C).
    19. Matarazzo, Michela & Penco, Lara & Profumo, Giorgia & Quaglia, Roberto, 2021. "Digital transformation and customer value creation in Made in Italy SMEs: A dynamic capabilities perspective," Journal of Business Research, Elsevier, vol. 123(C), pages 642-656.
    20. David J. Teece, 2007. "Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance," Strategic Management Journal, Wiley Blackwell, vol. 28(13), pages 1319-1350, December.
    21. Hamada Fawzy Thabet Abuzid & Muzaffar Abbas, 2017. "Banks Performance and Impact of Market Orientation Strategy: Do Employee Satisfaction and Customer Loyalty Augment this Relationship?," International Review of Management and Marketing, Econjournals, vol. 7(2), pages 60-66.
    22. Omorodion Omoregbe & Joseph Azage & David Ikhide Alufohai, 2022. "Innovation Strategies And Market Orientation In Selected Nigerian Banks," Oradea Journal of Business and Economics, University of Oradea, Faculty of Economics, vol. 7(1), pages 45-61, March.
    23. Ali Naimi-Sadigh & Tayebeh Asgari & Mohammad Rabiei, 2022. "Digital Transformation in the Value Chain Disruption of Banking Services," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(2), pages 1212-1242, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Albérico Travassos Rosário & Joana Carmo Dias, 2023. "The New Digital Economy and Sustainability: Challenges and Opportunities," Sustainability, MDPI, vol. 15(14), pages 1-23, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jiatong Yu & Jiajue Wang & Taesoo Moon, 2022. "Influence of Digital Transformation Capability on Operational Performance," Sustainability, MDPI, vol. 14(13), pages 1-20, June.
    2. Sjödin, David & Liljeborg, Alexander & Mutter, Sermed, 2024. "Conceptualizing ecosystem management capabilities: Managing the ecosystem-organization interface," Technological Forecasting and Social Change, Elsevier, vol. 200(C).
    3. Maha Shehadeh & Ahmad Almohtaseb & Jehad Aldehayyat & Ibrahim A. Abu-AlSondos, 2023. "Digital Transformation and Competitive Advantage in the Service Sector: A Moderated-Mediation Model," Sustainability, MDPI, vol. 15(3), pages 1-21, January.
    4. Chen, Yantai & Luo, Haibei & Chen, Jin & Guo, Yanlin, 2022. "Building data-driven dynamic capabilities to arrest knowledge hiding: A knowledge management perspective," Journal of Business Research, Elsevier, vol. 139(C), pages 1138-1154.
    5. Zahid Sarwar & Jingmei Gao & Adnan Khan, 2024. "Nexus of digital platforms, innovation capability, and strategic alignment to enhance innovation performance in the Asia Pacific region: a dynamic capability perspective," Asia Pacific Journal of Management, Springer, vol. 41(2), pages 867-901, June.
    6. Oliveira, Mariana & Zancul, Eduardo & Salerno, Mario Sergio, 2024. "Capability building for digital transformation through design thinking," Technological Forecasting and Social Change, Elsevier, vol. 198(C).
    7. Ziye Zhang & Meiying Wu & Jiajie Yin, 2024. "What Is Necessary for Digital Transformation of Large Manufacturing Companies? A Necessary Condition Analysis," Sustainability, MDPI, vol. 16(9), pages 1-18, May.
    8. Khurana, Indu & Dutta, Dev K. & Singh Ghura, Amarpreet, 2022. "SMEs and digital transformation during a crisis: The emergence of resilience as a second-order dynamic capability in an entrepreneurial ecosystem," Journal of Business Research, Elsevier, vol. 150(C), pages 623-641.
    9. Linde, Lina & Sjödin, David & Parida, Vinit & Wincent, Joakim, 2021. "Dynamic capabilities for ecosystem orchestrationA capability-based framework for smart city innovation initiatives," Technological Forecasting and Social Change, Elsevier, vol. 166(C).
    10. Yutong Liu & Peiyi Song, 2024. "Research on the Influence of Firm Digital Intelligence Transformation and Management Innovation on Performance and Sustainable Development: Empirical Evidence from China," Sustainability, MDPI, vol. 16(17), pages 1-21, September.
    11. Chen, Hansong & Tian, Zhen, 2022. "Environmental uncertainty, resource orchestration and digital transformation: A fuzzy-set QCA approach," Journal of Business Research, Elsevier, vol. 139(C), pages 184-193.
    12. Li, Lei & Lin, Jiabao & Ouyang, Ye & Luo, Xin (Robert), 2022. "Evaluating the impact of big data analytics usage on the decision-making quality of organizations," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    13. Jin, Zhizhou & Zeng, Saixing & Chen, Hongquan & Shi, Jonathan Jingsheng, 2022. "Explaining the expansion performance in technological capability of participants in megaprojects: A configurational approach," Technological Forecasting and Social Change, Elsevier, vol. 181(C).
    14. Brewis, Claire & Dibb, Sally & Meadows, Maureen, 2023. "Leveraging big data for strategic marketing: A dynamic capabilities model for incumbent firms," Technological Forecasting and Social Change, Elsevier, vol. 190(C).
    15. Kroh, Julia & Globocnik, Dietfried & Schultz, Carsten & Holdhof, Frederike & Salomo, Søren, 2024. "Micro-foundations of digital innovation capability – A mixed method approach to develop and validate a multi-dimensional measurement instrument," Technological Forecasting and Social Change, Elsevier, vol. 198(C).
    16. Klaus E. Meyer & Jiatao Li & Keith D. Brouthers & Ruey-Jer ‘‘Bryan’’ Jean, 2023. "International business in the digital age: Global strategies in a world of national institutions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(4), pages 577-598, June.
    17. Chang-Geun Kim & Oh-Suk Yang, 2024. "Global Companies’ Dynamic Response to Business Environment Uncertainty through Digital Transformation: Sustainable Digital Quality–Customer Value–Market Performance Relationships," Sustainability, MDPI, vol. 16(15), pages 1-32, July.
    18. Cheng, Ru & Tao, Lei & Wang, Qiang & Zhao, Xiande, 2023. "The impact of value co-creation orientation on radical service innovation: Exploring a serial mediation mechanism," International Journal of Production Economics, Elsevier, vol. 262(C).
    19. Osama Musa Ali Al-Darras & Cem Tanova, 2022. "From Big Data Analytics to Organizational Agility: What Is the Mechanism?," SAGE Open, , vol. 12(2), pages 21582440221, June.
    20. Hui Zhang & Huiying Ding & Jianying Xiao, 2023. "How Organizational Agility Promotes Digital Transformation: An Empirical Study," Sustainability, MDPI, vol. 15(14), pages 1-13, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:15:y:2023:i:3:p:1915-:d:1041008. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.