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Digital transformation, organisational capabilities, and SME performance - size matters

Author

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  • Irena Mladenova

    (Sofia University St. Kliment Ohridski, Bulgaria)

  • Zhelyu Vladimirov

    (Sofia University St. Kliment Ohridski, Bulgaria)

  • Olya Harizanova

    (Sofia University St. Kliment Ohridski, Bulgaria)

Abstract

This paper aims to reveal organisational capabilities of small and medium-sized enterprises (SMEs) to transform digitally and to explore some differences between enterprises' groups. The study approaches digital transformation as transformative and continuous organisational change facilitated by digital technologies and describes the capabilities of SMEs to navigate such a change. This research is quantitative and uses data from a sample of 308 SMEs in Bulgaria, collected during October-December 2023. Five composite variables (transformational leadership, organisational flexibility, risk-tolerant culture, digital skills, and digital business intensity) are used to describe SMEs' ability to implement DT-induced organisational change. Based on these variables, a cluster analysis is applied, which delineates four distinct groups of SMEs. The results show that medium-sized firms do much better on all five variables and demonstrate better firm performance than micro-enterprises.

Suggested Citation

  • Irena Mladenova & Zhelyu Vladimirov & Olya Harizanova, 2025. "Digital transformation, organisational capabilities, and SME performance - size matters," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 16, pages 216-238, June.
    • Handle: RePEc:jes:journl:y:2025:v:16(1):p:216-238
    DOI: https://doi.org/10.47743/ejes-2025-0110
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